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Critical Success Factors of Small and Medium-Sized Enterprises in Saudi Arabia: Insights from Sustainability Perspective

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: The aim of this study is to explore the critical success factors (CSFs) of small and medium-sized enterprises (SMEs) in Saudi Arabia. A questionnaire was developed using 28 factors/indicators identified from the previous researches. From 500 respondents, a total of 347 questionnaires were returned. By conducting exploratory factors analysis, these indicators were categorized into six factors, namely: Individual factors, business characteristics, management factors, business support, capital availability and business environment. Using IBM SPSS and AMOS, the results indicated that business support was the most critical factor that significantly affects the success of SMEs in Saudi Arabia, followed by individual factors, capital availability, and management factors. They also indicated that business characteristics and business environment factors had no significant impacts on the success of these enterprises.
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administrative
sciences
Article
Critical Success Factors of Small and Medium-Sized
Enterprises in Saudi Arabia: Insights from
Sustainability Perspective
Ahmad Al-Tit 1,* , Anis Omri 1,2 and Jalel Euchi 1,3
1College of Business and Economics (CBE), Qassim University, Buraidah 15452, Saudi Arabia;
elomrianis@gmail.com (A.O.); eleuchi.jalel@gmail.com (J.E.)
2Faculty of Economics and Management of Nabeul, University of Carthage, Carthage 1054, Tunisia
3LOGIQ Laboratory, Sfax University, Sfax 3029, Tunisia
*Correspondence: aa.altit@qu.edu.sa or ahmmteet@gmail.com
Received: 7 March 2019; Accepted: 26 March 2019; Published: 2 April 2019
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Abstract:
The aim of this study is to explore the critical success factors (CSFs) of small and
medium-sized enterprises (SMEs) in Saudi Arabia. A questionnaire was developed using 28
factors/indicators identified from the previous researches. From 500 respondents, a total of 347
questionnaires were returned. By conducting exploratory factors analysis, these indicators were
categorized into six factors, namely: Individual factors, business characteristics, management factors,
business support, capital availability and business environment. Using IBM SPSS and AMOS, the
results indicated that business support was the most critical factor that significantly aects the success
of SMEs in Saudi Arabia, followed by individual factors, capital availability, and management factors.
They also indicated that business characteristics and business environment factors had no significant
impacts on the success of these enterprises.
Keywords:
critical success factors; business support; corporate social responsibility; SMEs;
Saudi Arabia
1. Introduction
Small and medium-sized enterprises (SMEs) play an important role in the modern economy.
What determines their success of SMEs is a topic of much academic debate. Scholars from various
disciplines agreed on the importance of SMEs success in employment, wealth, and social and economic
development (e.g., Autio 2005;Omri and Ayadi-Frikha 2014;Omri et al. 2015). According to Pletnev
and Barkhatov (2016), SMEs contribute approximately 56% of the gross domestic product (GDP) of
many European countries (Muller et al. 2017). Similarly, Abdullahi et al. (2015) cited additional factors
that explain the importance of SMEs, such as communities’ empowerment, poverty alleviation and
employment opportunities provision.
In fact, the factors that determine their success have increasingly drawn the attention of scholars,
practitioners, and policy makers. A review of the peer reviewed literature on critical success factors
(CSFs) showed that these factors have been and continue to be the focus of many researchers in
several areas, such as CSFs for business start-ups in several countries, such as China and Malaysia
(
Watson et al. 1998
;Huang et al. 2011;Chong 2012;Chawla et al. 2010;Omri et al. 2015;Pletnev and
Barkhatov 2016;Lampadarios et al. 2017), total quality management (Yusof and Aspinwall 1999,2000),
business intelligence implementation (Olszak and Ziemba 2012), business models for sustainability of
food and beverage companies in Netherlands (Long et al. 2018), women-owned small and medium-sized
enterprises in UAE (Gupta and Mirchandani 2018), environmental manufacturing (Jabbour et al. 2018),
adoption of e-commerce by SMEs in Nigeria (Agwu and Murray 2015), implementation of lean six
Adm. Sci. 2019,9, 32; doi:10.3390/admsci9020032 www.mdpi.com/journal/admsci
Adm. Sci. 2019,9, 32 2 of 12
sigma (Laureani and Antony 2018), implementation of business intelligence in SMEs in Poland (Olszak
and Ziemba 2012). In a parallel bundle of the literature, scholars examined CSFs for micro, small and
medium sized enterprises in the Kingdom of Saudi Arabia (KSA) either in general (Zamberi 2012) or
in dierent areas like knowledge management (Migdadi 2009), e-commerce (Al-Ghamdi et al. 2011;
Sin et al. 2016
), technology transfer (Merdah and Sadi 2011), CSFs of enterprise resource planning
(Aldayel et al. 2011), business marketing (Sadi and Iftikhar 2011), computer technology acceptance
(Al-Gahtani 2004).
The importance of theoretical research to provide a conceptual framework for the success factors
of SMEs to help investors, entrepreneurs and small business finance organizations and government
institutions to adopt a strategy that contributes to enhancing the success of small projects and protecting
them from managerial problems and financial failure, as well as directing the local community
institutions to support these projects. The research is also important in presenting a model that explains
the impact of critical success factors of SMEs in Saudi Arabia, thus providing a model adapted to
the Saudi environment, which may serve as a starting point for conducting further researches. The
main objective of this study is to identify the success factors of SMEs that contribute to sustainable
development in Saudi Arabia by exploring the CSFs of 347 SMES by using structural equation modeling.
To the best of our knowledge, none previous researches have used 28 indicators, which are categorized
into six factors, namely: Individual factors, business characteristics, management factors, business
support, capital availability and business environment, on the success of SMEs in Saudi Arabia.
The rest of the paper is organized as follows. Section 2discusses the related literature of CSFs for
small-sized enterprises. Section 3discusses the research method. Section 4describes our sample and
variables. Section 5presents and discusses the empirical results. Section 6concludes and formulates
some managerial recommendations.
2. Success Factors of SMEs: A Review of Literature
There has been a series of previous studies aimed at detecting the critical success factors of
SMEs. For instance, Chawla et al. (2010) considered CSFs of small business in China and the USA,
and found that small business in China are subject to several success factors related to marketing,
competitive forces, industry trends, location, capital availability, and owner experience. Their study
exhibited similarities between small business in China and the USA, except for the business-financing
factor. In case of SMEs in Malaysia, Chong (2012) investigated the CSFs and he identified that
managerial skills, government support, training, access to capital, marketing, customer service,
competitive prices, human resource management, social skills, location, family and friends support
are the key success factors. For a developing country, Ng and Kee (2012) identify the CSFs for SMEs,
such as leadership and management, intellectual capital, organizational innovation, entrepreneurial
characteristics and competence, human resource, motivation and market orientation. In addition,
Nikoli´c et al. (2015) classified all factors that attribute to SMEs success into two groups: Individual
factors and non-individual factors. Individual factors cover entrepreneur characteristics, such as owner
and manager skills, personal characteristics, gender and motivation, while non-individual factors refer
to internal (marketing, ability to compete, technology, innovation) and external factors (limited finance,
market conditions, intensive competition).
In their mixed-method research paper, Omri et al. (2015) investigated factors that aect small
business success using data from Tunisian micro-enterprises and concluded that innovation activities
of micro-enterprises significantly mediated the eect of human, social, and financial capital on small
business success. Moreover, Lampadarios et al. (2017) categorized the CSFs for SMEs into three
factors: Entrepreneurial factors (owner age, gender, education level, experience and managerial skills),
enterprise factors (business age and size, business networks, financial resources, customer relationship
management; human capital, marketing and strategic planning) and business environment factors
(political, economic, socio-cultural, technological, legal, and ecological environments).
Adm. Sci. 2019,9, 32 3 of 12
Other veins in the literature examined CSFs for adopting and implementing several constructs.
For instance, Yusof and Aspinwall (1999) studied CSFs of total quality management (TQM) for
SMEs and proposed ten factors cover management leadership, continuous improvement system,
employee education and training, supplier quality management, measurement and feedback, systems
and processes, human resource management, resources, work environment and culture, along
with tools and techniques. Olszak and Ziemba (2012) have also studied the CSFs for business
intelligence implementation in SMEs and identified seven CSFs: Management commitment and
support, a clear strategic vision, business-centric championship and a balanced team composition,
business-driven and iterative development approach, change management, sustainable data quality
and integrity, and business-driven, scalable, and flexible technical framework. In a study conducted
by Wong (2005) on CSFs of knowledge management (KM) implementation, eleven CSFs were
proposed: Management leadership and support, organizational culture, information technology,
well-planned strategy, knowledge management measurement, organizational infrastructure, processes
and activities of knowledge management, training, motivation, human and financial resources, as well
as human resource management. Using data collected for respondents selected from SMEs in Nigeria,
Abdullahi et al.
(2015) found that financial needs, infrastructure and employee training were positively
related to SMEs performance. In case of India, Vyas et al. (2015) determined CSFs of SMEs in banking
in India: Supportive organizational factors, rapid delivery and response to customers, marketing,
banking model and policy, and improved customer service. In Russia, Pletnev and Barkhatov (2016)
indicated that SMEs are aected by CSFs like employee professional and personal qualities, relations
with customers and suppliers, entrepreneurial skills of the top executives, wages, as well as manager’s
social responsibility.
In Saudi Arabia, Migdadi (2009) explored CSFs for knowledge management in SMEs and
highlighted the following factors: Management leadership and support, culture, information technology,
strategy, measurement, organizational infrastructure, processes, motivational aids, resources, human
resource management, customer satisfaction and external relations. Alshagawi (2015) conducted
analytical research of strategies for the women entrepreneurship success. The results determine
the success factors: Family support, hard work, managerial skills and good customer service, and
business knowledge. Small and medium-sized enterprises still need to be analyzed. Alshumaimri
and Almohaimeed (2014) note that financial and administrative support for small and medium-sized
enterprises must be provided, especially in the high failure rate. On the other hand, Mahdi (2014)
identified a study aimed at identifying the requirements of entrepreneurship in Saudi Arabia by
deepening the belief in business values and ethics to improve the social culture. The main objective
of this study is to identify the success factors of SMEs that contribute to sustainable development in
Saudi Arabia.
3. Research Method and Hypotheses Development
3.1. Instrument
Prior to gathering research data, a questionnaire was developed using CSFs found in the literature.
A total of 52 CSFs for small and medium-sized business success were identified and included in a
questionnaire in order to identify the importance of these factors. Adapting the method used by
Wong (2005), the questionnaire was anchored using 5-point Liker from 1 (not successful), 2 (slightly
successful), 3 (moderately successful), 4 (successful), to 5 (very successful). Responses with 1 and 2
were regarded as poor, responses with 3 were satisfactory, while responses with 4 and 5 were deemed
good. Refining the questionnaire in light of academics and practitioners’ modifications resulted in 42
CSFs with satisfactory and good scores.
Adm. Sci. 2019,9, 32 4 of 12
3.2. Factor Analysis
The forty-two factors identified by the group of academics and practitioners were explored via
principal component analysis. The results depicted in Figure 1, which is a scree plot of components
number and eigenvalue values, showed that six components were extracted with Eigenvalues greater
than 1 (Hayton et al. 2004), since factors with Eigenvalues less than 1 were excluded because those
factors account for no more variance (Terwee et al. 1998).
Adm. Sci. 2019, 9, x FOR PEER REVIEW 4 of 12
Figure 1. Scree plot of the components extracted.
Using principal component analysis as an extraction method, as well as varimax with Kaiser
normalization as a rotation method, the six components that extracted explained, as shown in Table
1, about 87% of the total variance.
Table 1. Total variance explained by extracted components.
Component Initial Eigenvalues
Total % of Variance Cumulative %
1 22.086 52.586 52.586
2 5.130 12.214 64.800
3 3.378 8.044 72.843
4 2.431 5.789 78.632
5 1.929 4.593 83.225
6 1.681 4.003 87.228
The results reported in Table 1 indicated that component 1 (individual factor) explained about
53% of the total variance, followed by component 2 (business characteristics), which explain about
12% of the total variance. Furthermore, component 3 (management factor) was accounted for 8% of
the total variance, in comparison with component 4 (business support) that accounted for 6% of the
total variance explained. Component 5 (capital availability) explained about 5% of the total variance
and component 6 (business environment) explained about 4% of the total variance. Table 2 indicated
that all factor loadings of the six components were ranged from 0.711 to 0.962. Factor loadings of
individual factor items (ITEM1-ITEM5) ranged from 0.776 to 0.962, business characteristics items
(ITEM6-ITEM9) ranged from 0.791–0.901, management factor items (ITEM10-ITEM17) ranged from
0.739 to 0.898, business support items (ITEM18-ITEM20) ranged from 0.722 to 0.776, capital
availability items (ITEM21-ITEM23) ranged from 0.746 to 0.968, and finally, business environment
items (ITEM24-ITEM28) ranged from 0.711 to 0.884. It was noted that all factor loadings were higher
than 0.50 (Luarn and Lin 2005). Acceptable factor loadings were regarded as a key condition for
obtaining a good model (Ullman and Bentler 2012).
3.3. Reliability and Validity
Reliability was measured based on composite reliability (CR) and validity was tested by
convergent validity using the average variance extracted (AVE). CR for all factors, as can be seen in
Table 2, were greater than 0.70. CR values from 0.60–0.70 in exploratory factor analysis are
satisfactory, and AVE values were greater than 0.50 (Hair et al. 2011; Al-Tit 2017). Therefore, the
reliability and validity criteria were met.
Figure 1. Scree plot of the components extracted.
Using principal component analysis as an extraction method, as well as varimax with Kaiser
normalization as a rotation method, the six components that extracted explained, as shown in Table 1,
about 87% of the total variance.
Table 1. Total variance explained by extracted components.
Component Initial Eigenvalues
Total % of Variance Cumulative %
1 22.086 52.586 52.586
2 5.130 12.214 64.800
3 3.378 8.044 72.843
4 2.431 5.789 78.632
5 1.929 4.593 83.225
6 1.681 4.003 87.228
The results reported in Table 1indicated that component 1 (individual factor) explained about
53% of the total variance, followed by component 2 (business characteristics), which explain about
12% of the total variance. Furthermore, component 3 (management factor) was accounted for 8%
of the total variance, in comparison with component 4 (business support) that accounted for 6%
of the total variance explained. Component 5 (capital availability) explained about 5% of the total
variance and component 6 (business environment) explained about 4% of the total variance. Table 2
indicated that all factor loadings of the six components were ranged from 0.711 to 0.962. Factor
loadings of individual factor items (ITEM1-ITEM5) ranged from 0.776 to 0.962, business characteristics
items (ITEM6-ITEM9) ranged from 0.791–0.901, management factor items (ITEM10-ITEM17) ranged
from 0.739 to 0.898, business support items (ITEM18-ITEM20) ranged from 0.722 to 0.776, capital
availability items (ITEM21-ITEM23) ranged from 0.746 to 0.968, and finally, business environment
items (ITEM24-ITEM28) ranged from 0.711 to 0.884. It was noted that all factor loadings were higher
than 0.50 (Luarn and Lin 2005). Acceptable factor loadings were regarded as a key condition for
obtaining a good model (Ullman and Bentler 2012).
Adm. Sci. 2019,9, 32 5 of 12
Table 2.
Components factor loadings, average variance extracted (AVE) and composite reliability (CR).
Factors 1 2 3 4 5 6 AVE CR.
ITEM1 0.823
0.80 0.953
ITEM2 0.909
ITEM3 0.943
ITEM4 0.928
ITEM5 0.876
ITEM6 0.860
0.80 0.942
ITEM7 0.918
ITEM8 0.902
ITEM9 0.899
ITEM10 0.951
0.88 0.984
ITEM11 0.939
ITEM12 0.952
ITEM13 0.932
ITEM14 0.946
ITEM15 0.904
ITEM16 0.951
ITEM17 0.945
ITEM18 0.854
0.77 0.910
ITEM19 0.889
ITEM20 0.890
ITEM21 0.941
0.91 0.967
ITEM22 0.967
ITEM23 0.950
ITEM24 0.963
0.91 0.981
ITEM25 0.953
ITEM26 0.957
ITEM27 0.952
ITEM28 0.945
3.3. Reliability and Validity
Reliability was measured based on composite reliability (CR) and validity was tested by convergent
validity using the average variance extracted (AVE). CR for all factors, as can be seen in Table 2, were
greater than 0.70. CR values from 0.60–0.70 in exploratory factor analysis are satisfactory, and AVE
values were greater than 0.50 (Hair et al. 2011;Al-Tit 2017). Therefore, the reliability and validity
criteria were met.
3.4. Hypotheses Development
Based on the above-mentioned analysis, six critical success factors were identified: Individual
factors, business characteristics, management factors, business support, capital availability and business
environment. In order to investigate the eects of these factors on the success of small-sized enterprises,
it was hypothesized that these success factors are positively related to small-sized enterprises success.
Rose et al. (2006) studied entrepreneurs success factors in small and medium-sized enterprises in
Malaysia and found that education level of the owner or manager, as one item of the individual’s factors,
had a positive relationship with business success. Kubickova and Prochazkova (2014) mentioned
some success factors related to business environments, such as legal factors, individual factors, such as
owner or manager experience. According to Al-Mahrouq (2010), there are five factors that contribute
to the success of the small and medium-sized enterprises in Jordan, which are technological factors,
firm’s structure, financial structure, marketing and productivity, as well as human resource structure.
In a study on Russian SMEs by Pletnev and Barkhatov (2016), individual factors, i.e., personal qualities
and management factors, such as social responsibility were regarded as key success factors.
Radzi et al.
Adm. Sci. 2019,9, 32 6 of 12
(2017) indicated that the success of small businesses is related to entrepreneurial competency and
technology usage. For Lussier and Corman (1995), business experience and use of professional
advisors were key drivers of business success. Lampadarios et al. (2017) highlighted the importance of
entrepreneurial factors, enterprise factors and business environment factors as success factors of small
and medium-sized enterprises. In a study in the tourism industry in Saudi Arabia, Sadi and Iftikhar
(2011) examined CSFs of marketing in small and medium-sized enterprises. Their results underlined
that customer orientation and marketing planning were important factors while Internet usage and
personal or social networks have no eect in this context. Referring to Table 1, numerous CSFs that
positively related to the success of small enterprises. On the basis of the literature, the following
hypotheses were proposed:
Hypothesis 1. Individual factors are positively related to small-sized enterprises success.
Hypothesis 2. Business characteristics are positively related to small-sized enterprises success.
Hypothesis 3. Management factors are positively related to small-sized enterprises success.
Hypothesis 4. Business support is positively related to small-sized enterprises success.
Hypothesis 5. Capital availability is positively related to small-sized enterprises success.
Hypothesis 6. Business environment is positively related to small-sized enterprises success.
4. Research Sample
The population of this study consisted of small-sized enterprises that receive funds from The
Centennial Fund, Baader Foundation and The Saudi Fund for Development, since they are the most
significant financers of these businesses in Saudi Arabia during 2016. About 500 participants were
randomly selected as a research sample in order to collect data on CSFs and business success. Five
hundred questionnaires were distributed and 347 were returned.
Table 3shows CSFs that used in the current study. Five items were used to measure individual
factors, four factors were used to measure business characteristics, and eight factors were used to
measure management factors. Three items for each factor measure both business support and capital
availability. Business environment was measured using five items. References to these factors can be
seen in Table 1. Business success was measured by asking respondents to rank their business success
based on six items adopted from Radzi et al. (2017, p. 43). The questionnaire consisted of 28 items.
Table 3. Items of the used variables.
Factors Items Description
Individual factors
ITEM1 Owner/manager age
ITEM2 Owner/manager education level
ITEM3 Owner/manager business skills and experience
ITEM4 Use of professional advisors
ITEM5 Personal financial needs. e.g., improve living style
Business characteristics
ITEM6 Business size
ITEM7 Business networks
ITEM8 Business innovation
ITEM9 Ability to compete
Adm. Sci. 2019,9, 32 7 of 12
Table 3. Cont.
Factors Items Description
Management factors
ITEM10 Management commitment and support
ITEM11 Organizational infrastructure
ITEM12 Human resource management practices
ITEM13 Organizational culture
ITEM14 Work environment
ITEM15 Internal communication
ITEM16 Corporate social responsibility
ITEM17 Information technology
Business support
ITEM18 Financial support
ITEM19 Government support
ITEM20 Family and friends support
Capital availability
ITEM21 Financial capital
ITEM22 Human capital
ITEM23 Social capital
Business environment
ITEM24 Economic factors
ITEM25 Technological factors
ITEM26 Legal factors
ITEM27 Socio-cultural factors
ITEM28 Ecological factors
5. Results and Discussion
5.1. Confirmatory Factor Analysis
The results of exploratory factor analysis were confirmed using confirmatory factors analysis (CFA).
As exhibited in Figure 2, six factors were loaded on 25 items forming a well-fitted measurement model.
Factor 1 (Individual factors) is related to four items (1, 3, 4 and 5), factor 2 (business characteristics) is
linked with three items (6, 7 and 8), factor 3 (management factors) is connected with eight items (10–17),
factor 4 (business support) is associated with three items (18–20). Moreover, an association between
factors 5 (capital availability) and three items (21–23) was established, as well as between factor 6
(business environment) and four items (24, 25, 26 and 28). The measurement model fit summary
asserted that this model fit the data well (Number of Parameters NPAR =67, Chi-Square Value CMIN =
384.751, Degrees of Freedom DF =258, p=0.000, CMIN/DF =1.491, Comparative Fit Index GFI =0.919,
Adjusted Goodness of Fit AGFI =0.898, Normed Fit Index NFI =0.939, Comparative Fit Index CFI =0.979,
Root Mean Square of Error Approximation RMSEA =0.038).
5.2. Structural Model
Based on the results of CFA in which three items were removed, the structural model was
developed as can be seen in Figure 3. It was revealed that factor 1 (individual factors) had a significant
eect on small-sized enterprises success (ß =0.157, S.E. =0.063, CR =2.484, p=0.013), factor 3
(management factors) had a significant eect on small-sized enterprises success (ß =0.105, S.E. =0.043,
CR =2.429, p=0.015) and factor 4 (business support) had a significant eect on small-sized enterprises
success (ß =0.289, S.E. =0.046, CR =6.257, p=0.000), as well factor 5 (capital availability) had a
significant eect on small-sized enterprises success (ß =0.131, S.E. =0.063, CR =2.090, p=0.037). On
the other hand, factor 2 (business characteristics) had no significant eect on small-sized enterprises
success (ß =0.002, S.E. =0.049, CR =0.039, p=0.969) and factor 6 (business environment) had no
significant eect on small-sized enterprises success (ß =0.047, S.E. =045, CR =1.054, p=0.292). These
results are summarized in Table 4.
Adm. Sci. 2019,9, 32 8 of 12
Adm. Sci. 2019, 9, x FOR PEER REVIEW 7 of 12
ITEM20 Family and friends support
Capital availability
ITEM21 Financial capital
ITEM22 Human capital
ITEM23 Social capital
Business
environment
ITEM24 Economic factors
ITEM25 Technological factors
ITEM26 Legal factors
ITEM27 Socio-cultural factors
ITEM28 Ecological factors
5. Results and Discussion
5.1. Confirmatory Factor Analysis
The results of exploratory factor analysis were confirmed using confirmatory factors analysis
(CFA). As exhibited in Figure 2, six factors were loaded on 25 items forming a well-fitted
measurement model. Factor 1 (Individual factors) is related to four items (1, 3, 4 and 5), factor 2
(business characteristics) is linked with three items (6, 7 and 8), factor 3 (management factors) is
connected with eight items (10–17), factor 4 (business support) is associated with three items (18–20).
Moreover, an association between factors 5 (capital availability) and three items (21–23) was
established, as well as between factor 6 (business environment) and four items (24, 25, 26 and 28). The
measurement model fit summary asserted that this model fit the data well (Number of Parameters
NPAR = 67, Chi-Square Value CMIN = 384.751, Degrees of Freedom DF = 258, p = 0.000, CMIN/DF = 1.491,
Comparative Fit Index GFI = 0.919, Adjusted Goodness of Fit AGFI = 0.898, Normed Fit Index NFI = 0.939,
Comparative Fit Index CFI = 0.979, Root Mean Square of Error Approximation RMSEA = 0.038).
Figure 2. Results of confirmatory factors analysis (CFA).
Figure 2. Results of confirmatory factors analysis (CFA).
y
Figure 3. Results of the structural model.
Adm. Sci. 2019,9, 32 9 of 12
Table 4. Results of structural model.
Hyp. No. Path ß S.E. CR P
H1 Individual factors business success 0.157 0.063 2.484 0.013
H2 business characteristics business success 0.002 0.049 0.039 0.969
H3 Management factors business success 0.105 0.043 2.429 0.015
H4 business support business success 0.289 0.046 6.257 0.000
H5 Capital availability business success 0.131 0.063 2.090 0.037
H6 business environment business success 0.047 0.045 1.054 0.292
The results in Table 4confirm that four hypotheses out of six were supported. Hypotheses H1,
H3, H4 and H5 were supported and hypotheses H2 and H6 were rejected. That is, individual factors,
management factors, business support and capital availability had significant eects on small-sized
enterprises success, while business characteristics and business environment had no such eects.
The most important factors that aect the success of small and medium-sized in Saudi Arabia
were those related to business support, such as financial support, government support, and family and
friends support. These results were in agreement with Chong (2012). Those factors were followed by
individual factors, such as entrepreneur age, skills and business skills, use of professional advisors
and personal financial needs were the most critical individual factors that aect the success of small
business. Similar findings were echoed by Chawla et al. (2010), Chong (2012), Ng and Kee (2012),
Nikoli´c et al. (2015), Migdadi (2009), Pletnev and Barkhatov (2016), Hazudin et al. (2015), Rose et al.
(2006) and Lampadarios et al. (2017) with their emphasis on entrepreneurial characteristics as CSFs of
business success. Capital availability in terms of financial capital, human capital and social capital
ranked third as critical factors that have significant eects on small-sized enterprises success.
These results are in line with Chawla et al. (2010), Omri et al. (2015), Migdadi (2009), Vyas et al.
(2015). The results indicated that management factors, like management commitment and support,
organizational infrastructure, human resource management practices, organizational culture, work
environment, internal communication, corporate social responsibility and information technology,
ranked last in terms of their eect on small-sized enterprises success. Same results were reported
by Chong (2012), Ng and Kee (2012) and Wong (2005). Finally, the results found that business
characteristics, e.g., business size, business networks, business innovation and ability to compete,
as well as business environment factors, such as economic, technological, legal, socio-cultural and
ecological factors have no eect on the success of small and medium-sized enterprises. Sadi and Iftikhar
(2011) cited that personal or social networks have no eect on the success of small and medium-sized
enterprises in Saudi Arabia. Dierently, Lampadarios et al. (2017) and Kubickova and Prochazkova
(2014) regarded business environment factors, such as political, economic, socio-cultural, technological,
legal, and ecological environments as CSFs of business success.
6. Conclusions
An expansive review of the literature of small and medium-sized CSFs uncovered 52 factors.
Refining these factors based on suggestions of a group of academics produced a list incorporated a
total of 42 factors. The initial results reveal that 28 factors out of the 42 factors were perceived as CSFs
for small and medium-sized enterprises. The results of the exploratory factor analysis showed that
the 28 factors were loaded on six factors. Those factors were labeled as individual factors, business
characteristics, management factors, business support, capital availability and business environment.
In order to achieve the objective of the study, a questionnaire was developed based on these 28 factors
and distributed to a sample of respondents from small and medium-sized enterprises that receive
funds from The Centennial Fund, Baader Foundation and The Saudi Fund for Development, since they
are the most significant financers of these businesses in Saudi Arabia during 2016. The confirmatory
factor analysis in light of goodness-of-fit statistics confirmed that the six factors can be measured well
using 25 items. Hence, the structural model was developed based on these 25 items. Significantly, the
Adm. Sci. 2019,9, 32 10 of 12
results of our study evinced that four factors out of the six factors studied were critical to the success of
small and medium-sized enterprises in the KSA, which were individual factors, management factors,
business support and capital availability.
In fact, all CSFs studied in the current study can be regarded as important factors that positively
aect the success of small and medium businesses. However, the interlocked nature of these factors
makes some of them more important. For example, ecological factors as a key factor in the business
environment can be practiced through corporate social responsibility, social factors are supported by
family and friends support, as well as social capital as factors related to business support and the
capital itself.
On the basis of these results, it was concluded that small-sized enterprises in Saudi Arabia are
subject to the support provided by the Centennial Fund, Baader Foundation and The Saudi Fund
for Development in the first place. Secondly, those enterprises are dependent on entrepreneurial
characteristics, such as age, skills and personal financial needs. In the third place, capital as measured
by financial, human, and social capital is a key success factor for those enterprises, in addition to
management factors.
On that account, Saudi policy makers are required to look upon the continuance of financial
support provided by the Centennial Fund, Baader Foundation and The Saudi Fund for Development.
Moreover, the selection of business owners who are applicants to receive the above-mentioned financial
support should also consider the personal characteristics of those applicants, such as age and business
experience. Policy makers also should introduce a new notion regarding pre-training of business
owners to acquire management and related skills before they start-up their business. In-service
entrepreneurs ought to receive simultaneous professional consultations on their businesses.
The most meaningful limitation of this study is related to the cross-sectional sampling design
and to respondents chosen from small-sized enterprises that receive funds from The Centennial Fund,
Baader Foundation, and The Saudi Fund for Development. Further studies are required to include
more respondents (e.g., private enterprises), using longitudinal research design in order to make these
results general and applicable for all small and medium-sized enterprises in Saudi Arabia.
Author Contributions:
A.A.-T., A.O. and J.E. conceptualization; Methodology, Validation, and Funding
Acquisition, A.A.-T., formal analysis, and Project management, A.A.-T.; A.O., Writing: draft, A.A.-T.; J.E.,
Writing: revision and editing.
Funding:
This research was funded by the Deanship of Scientific Research in Qassim University, Buraidah,
Saudi Arabia.
Acknowledgments:
The authors would like to thank the respondents who participated in this research. They
would also like to thank the Deanship of Scientific Research in Qassim University, Buraidah, Saudi Arabia.
Conflicts of Interest: The authors declare no conflict of interest.
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The objective of this paper is to offer further insights into Lean Six Sigma deployment, highlighting the more important critical success factors (CSFs) and particularly the role of leadership in successful deployment. Identification of CSFs for Lean Six Sigma is important as it allows organisations to focus their efforts on these factors to ensure success. The study is in two parts: the first part reviews the literature on leadership, Lean Six Sigma and CSFs for continuous improvement programmes. The second part illustrates the results of a longitudinal study through the administration of a survey questionnaire and exploratory factor analysis of the answers. The results suggest that the most important and significant factors for the effective implementation of Lean Six Sigma are project management, leadership, selection of top talented people and financial accountability. Although they highlight the importance of leadership as a CSF for effective deployment of Lean Six Sigma, more research is needed to determine what type of leadership is appropriate at different stages of Lean Six Sigma programme maturity.
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