Table of Contents
Management Strategies in small business. 4
Management Strategies for Small business. 5
Challenges of Management in Small business. 5
Small business entrepreneurship. 6
Characteristic of small business entrepreneurs. 8
Small business Entrepreneurship across the globe. 8
Small business Entrepreneurship in Asia. 8
Small business Entrepreneurship in Iran. 10
Abstract
Small business represents a higher percentage of all businesses in the UAE. Small business occupies a central part of the UAE economy. They are essentially the drivers of the UAE economy even though some of them are hardly noticed. Their contribution to economic growth, income and employment generation is therefore not in doubt. Though there are many studies on small business in UAE, the focus of most of the studies were on the financial aspects at the expense of the most valuable assets-the human resource management. This study is therefore aimed at examining the management practices of Small business in UAE. Small business face a lot of challenges notably the attitude of employees to work as well as high demand for benefits which did not match the level of performance.
Key words: Management, Small business, Economy
Introduction
The global phenomenon in talent shortage has led to a ‘talent war’ amongst organizations large and small, across all industry sectors throughout the world. This talent war is all about attracting, retaining, developing and engaging a quality workforce that plays a critical role in impacting the organizations’ bottom-line and growth. Management is associated with higher work productivity, higher profits, and an increase innovation capacity. This suggests that the HRM can increase the ability of small companies to select, develop and motivate a labor force capable to produce superior results. This thing is relevant for researchers but also for the millions of small company owners. It is imperative and important for Small business to convert challenges into opportunities. This can be better achieved with the support of organizations that are dedicated to the development of the Small business sector. Small business must understand and realize the talent of their people to achieve outstanding results. Making the right hiring and placement decisions first time is the key to increased productivity and reduced cost, so treat them as among your most important business decisions.
Small business
The concept of small business can be understood in different ways. In this article, however, we defined the concept of small business’ base on the number of employees they have. Most recently in China, Small business were defined using the average numbers of employees calculated according to China’s Third National Industrial Census conducted in 1995, which are 15, 893, and 3,755 respectively (Gorman, Hanlon & King, 1997). In this definition, small-medium enterprises are those with fewer than 100 employees (Hatten, 2015).
(Jennings & Beaver, 1997) on the other hand refers to the problem associated with using size to define Small business as dangers in so far as size varies from sector to sector. It must however be stated that management for large firms may not necessarily be applicable to Small business, because a lot of small and locally owned firms in UAE face a main challenge of survival due to the pressures of the external environment making them ignore the internal functioning of the firms and focusing on overall performance (Jennings & Beaver, 1997). Below is the trend of small business in the world.
Management Strategies in small business
Well-executed talent acquisition and lifecycle management are winning strategies that complement each other. Hiring the best talent is particularly critical in small and medium-sized companies where the margin of error is smaller. A new hire at a company of 100 represents a much larger percentage of the workforce than one at a company of 10,000—so bad hire has a greater negative impact. Smaller companies also suffer greater proportionate financial and productivity loss from having to re-recruit, re-hire and re-train in the aftermath of a bad hire. Recruiting processes, the first link in the chain of management, can truly determine a company’s success or failure. Hiring the best talent is particularly critical in small and medium-sized companies where the margin of error is smaller. The occasional HR activities performed in Small business may inhibit recruitment of HR
Management Strategies for Small business
World over half to two- thirds of all businesses are Small business. This proportion is much higher. The benefits of the Small business have created a special status and importance in the Five-Year Plans right from its inception. Small business must keep in view that the employees are as important as customers and suppliers. Since the number of employees is less so, each and every employee in Small business is very important. And when turnover is very high, Small business face a problem to continue. Small business know each and every employee because of less number. So, their challenges of management can be handled on individual basis. There is greater involvement of top management because the founder in most of the cases was singly responsible for HR activities. Small business need to be more competitive by adopting best management practices because without empowering HR, no business can run (Longenecker, Petty, Palich & Hoy, 2013). 50 % of the employees can never have come through employees references or internal job posting and screening methods used for acquisition are also very less. HR managers must be responsible not only for ends but also for means.
Challenges of Management in Small business
Small business are pivotal to the economic development .Since large number of the work-force is employed in the Small business they have to manage management strategies.This is the only key to success in meeting the challenges of the globalization scenario. Small business face resource constraints, specially the new technology solutions. So, by proper management practice, they can easily available to survive in the competitive environment problem of the good talent pool is very delicate issues for Small business. This is the challenge that arises because of the fact that big companies use a variety of talent acquisition practices but in Small business, the employees are acquired by the owner or manager himself. Another problem is that the HR department for Small business is usually not more than one person who wears many hats. See what small business face below:
Small business can’t afford in-depth management practices because of the fewer economies of scale. This is the biggest challenge for Small business. Small business doesn’t hire active database of potential hires. They place advertisement when the new vacancy arises without considering past databases. Small business doesn’t offer standard rewards & their compensation system is not well designed. Lack of career planning strategies makes hurdle in the pathway of talented employees. Small business generally provide less training & developmental opportunities.
Conclusion
Small business develop and implement policies and procedures for the management areas differently than large businesses, typically due to the size and nature of the organizations. Small and medium firms are less likely to use professional management practices than their counterparts. Management as carrier of the knowledge and skills in management of human resources has to be strategic partner that will contribute to the preparation and realization of strategic plans of the SME.
Entrepreneurship
The capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit. The most obvious example of entrepreneurship is the starting of new businesses.
In economics, entrepreneurship combined with land, labor, natural resources, and capital can produce profit. An entrepreneurial spirit is characterized by innovation and risk-taking and is an essential part of a nation’s ability to succeed in an ever-changing and increasingly competitive global marketplace
Small business entrepreneurship
Very few would ever indulge themselves to understand the factors that would actually drive and ultimately allow a woman in today’s world to risk all her money and property to embark on a business venture. Longenecker, Petty, Palich & Hoy (2013) believes that small business have always been deprived of their right to self-autonomy and self-reliance for many reasons. First and foremost, she believes that it is because men have always feared the rise of small business as leaders in the society as a threat to their survival. The reason is that men have realized that small business are more capable in managing; whether in the family or the local community, small business have shown more capability, but they have felt reluctant to the lack of motivation. Rani (1996) believes that the key factor is motivation that is the engine for a woman to take such risk. This motivation is vital for a woman to become successful and the source of this motivation can either be intrinsic or extrinsic.
Nevertheless, Schaper, Volery, Weber & Lewis (2010) outlines another factor apart from motivation which is ambition. The notion of ambition has been long argued with scholars as it is ambition that broadens the vision of people and makes life meaningful. It is in fact an index of one’s own resourcefulness and it is the key factor in small business entrepreneurship. “…what matters much for the development of a nation is not merely the people but their aspirations and means to reach their goals. It is needless to say that ambitions differ among individuals on the basis of their personal characteristics. Ambitions nourish the achievement, motivation and help bring economic growth and development.” p. 75
Nevertheless, what seems to be quite intriguing is how motivation and ambition differs from a woman to another when it comes to her family background. Rani (1996) studied the many factors that influence the small business ambition such as the educational status of the family as well as the occupational status of the family and realized that more small business who were raised in educated families and whose fathers were entrepreneurs or worked at a managerial level were eager and ultimately successful in establishing their business. Schaper, Volery, Weber & Lewis (2010) concludes that the fact that small business are more social individuals than men and in fact, “a woman never considers herself alone, physically, socially or even economically, but in fact as a part of a the family, the family also seems to reciprocate this feeling at least in the case of small business entrepreneurs.” p. 82
Therefore, it is not too far-fetched to conclude that small business entrepreneurs can easily be considered as the agents of social change. The governments would definitely prosper if they begin to guide small business in the right direction toward economic independence, particularly through the path of entrepreneurship. This is simply due to the fact that small business are widely affected by the environment, and feels a sense of belonging to it that when it is nourished in the right way, it can be more constructive than imagined. There is little doubt that supporting small business in becoming more financially independent can bring about great changes for the world and prosperity for all since small business are more prone to support and supply their fellow species.
Therefore, the entrepreneurship of small business becomes the focal point of many research and studies who all wish to analyze the impact of small business in the work force and understand the many factors that could affect small business entrepreneurship. Many scholars have looked at this issue and they have claimed that small business entrepreneurship is merely an isolated issue that could never be fully understood outside the social, cultural and even political realm. In her study, Solomon, Weaver & Fernald (1994) asserts that becoming an entrepreneur is not simply a state but in fact, “an evolution of encountering, assessing and reacting to a series of experiences, situations, and events produced by political, economic, social and cultural change.” P. 23
Storey & Greene (2010) further on notifies the simple fact that there are certain constraints that could and in fact would most likely deprive small business to participate in the work force, particularly as managers, let alone become successful entrepreneurs who would have an impact on the economy. She believes that there are certain “cultural and social patterns” that could hinder, limit and restrict small business from fully participating in the work force as independent individuals and successful managers. Hatten (2015) believes that these social and cultural constraints in the east are the main obstacles that stand between success and progress for most Asian and Middle Eastern countries. The men need to realize that male supremacy has deprived their communities of sustainable progress and such medieval ideologies need to be eradicated for their societies to begin blooming again.
On the other hand, Hatten (2015) analyzes the situation in a comparative form between the east and the west and outlines a series of factors that could influence small business entrepreneurships, more specifically in his country Iran. Primarily, he believes that the main issue is education and assert that in the west different forms of courses are provided to inform and enlighten students and future managers of the reality of small business entrepreneurship and its features, whereas in the east and more specifically in Iran such awareness is never intended. Furthermore, he believes that the lack of training courses for small business entrepreneurship has created a huge gap for small business who intend to embark on such a journey not knowing the difficulties they might face as small business managers in the future.
Furthermore, Longenecker, Petty, Palich & Hoy (2013) believes that another key factor is motivation and the cultural context of the east has created a distinct feeling of reluctance for small business to participate in the workforce as managers and leaders and presidents of companies and huge corporations. He strongly claims that such cultural issues has created an overwhelmingly upsetting situation for most small business where they feel, as he puts it, “discriminated and isolated” among successful managers who are predominantly men and unwilling to share their exclusive masculine reign with the opposite sex whom they covertly feel superior to and regretfully feel disproportionally more powerful and intelligent towards. p. 14
Characteristic of small business entrepreneurs
Noticeably, one needs to analyze small business entrepreneurship in the micro perspective as to what kind of small business become involved in such tedious yet challenging profession of managing dozens and sometimes hundreds of men in a company or a factory. The main question is what kind of an individual, more precisely a woman, would be interested and in fact capable of becoming a manager and what are the qualities that are shared by most of these successful small business entrepreneurs. Longenecker, Petty, Palich & Hoy (2013) believes that most small business entrepreneurs tend to be very motivated and as she puts it “self-directed” individuals. She further on believes that these small business show a very high urge for control and ultimately success and accomplishment. p.23
Small business Entrepreneurship across the globe
There is no doubt that a new generation is emerging and small business from all four corners are the globe are taking part in the expansion of the world economy by their enthusiastic participation as well as their leading role in the management of different industrial and trade institutions across the globe. It might have been a dream or even a wild thought to believe that one day small business even in as far places as Bangladesh can start their own businesses and become successful entrepreneurs but now we live in a world where that dream has come true as mentioned by many world figures including the noble prize winner Longenecker, Petty, Palich & Hoy (2013) “…empowerment has come to the small business of Bangladesh, even the poorest small business in Bangladesh. It’s tremendous. It’s a dramatic change that has taken place. Small business have access to money. They can now plan. They can now dream. Their children are in school. New communities are emerging. A new generation is emerging.”
On the other hand, one needs to understand that such success could and would never be achieved if the society does not recognize small business as capable individuals who could stand on their own feet and have the capacity to succeed independently without any help or aid from their male counterpart. Men need to begin learning the notion of respect when it comes to small business entrepreneurship and have the dignity and decency to honor and respect small business who embark on such challenges to lead their own enterprise as former US Secretary of State, Condoleezza Rice (2007) puts it quite well when she says, “Respect for small business is a prerequisite for success of countries in the modern world. In the dynamic 21st century no society can expect to nourish with half its people sitting on the sidelines, with no opportunity to develop their talents, to contribute to their economy or to play an equal part in the lives of their nations.”
Small business Entrepreneurship in Asia
One needs to acknowledge the simple fact that small business entrepreneurship has not been as well accepted and even welcomed in the east as it has been in the west. Nevertheless, one needs to understand that the east has been improving and the statistics regarding this is quite intriguing to analyze. For instance, in UAE there has been enormous energy put into the private sector to help small business entrepreneurship and in some case more support has been allocated to the small business entrepreneurs than their male counterpart to make sure that the initiative would give them an advantage. Tiwari (2007) believes that small business entrepreneurs have had a very efficient as well as a productive role in the enhancement of the UAE economy during the past decade. Nevertheless, there is an issue that, “the social structures of today have prevented the balanced development of small business alongside with men. (Jennings & Beaver, 1997)
Tiwari (2007) continues further on suggesting that as a remedy small business should be given an advantage when embarking on business ventures. “There are two streams of thoughts for the promotion of small business entrepreneurship. The first stream argues that small business should be given higher priority…” and certainly the second argues that both men and small business should be equally supported. The first view has been receiving more momentum in the UAE economy due to the fact that many politicians have now come to the conclusion that the small business are more eager to take part in the improvement of the economy and by supporting them they could benefit both from their effort and their support in coming elections. In fact, different programs such as EDPs (Entrepreneurship Development Programs) are being carried out to meet just that scheme.
On the other hand, Jennings & Beaver (1997) states that small business entrepreneurship in the Malaysia, a fast-growing economy in the Southeast Asia region, has not been as significant as it could have been anticipated. The data in the research indicate that small business accounted for only 7% of employers in the economically active population of Malaysia. Noticeably, it is quite unfortunate that the figure rose to only 8.5% six years later in 1990, and that is due to the fact that men still comprised the vast majority in employer status. However, with all the constraints and slow progress there is a glimpse of hope since for the past ten years the government has put more emphasis on the creation and support for newly established Small business who are struggling to grow their business. This is due to the fact that the government has well realized that the economy is best improved by supporting small businesses, and there are many small business entrepreneurs who have the ideas, resources and recruitment capabilities to bring such capital back into the economy, “small business entrepreneurship has recently become an important pool of resources for Malaysia’s economic growth and personal prosperity.” p.4
Therefore, it might not be that stunning that the number of small business entrepreneurs in Malaysia has increased so vigorously in the past thirty years due to the emphasis on industrialization by the state and the active governess, and growing interests in the private sector and the whole notion of privatization, self-employment and business-oriented employment that seems to be the key issue in helping many young economies across the globe. Nevertheless, one needs to keep in mind that all of these have been facilitated by the growth in various sectors such as banking and financing, food manufacturing, general trading, personal and public services, education, training and consultancy, all comprising the main components for a young economy and a developing country that needs an initiative to begin progress.
Small business Entrepreneurship in Iran
Nevertheless, Iranian small business have been in the frontiers when it comes to Asian countries, and in fact, small business in Iran have been leaders for thousands of years and to be more specifically have been taking managerial positions as early as the late 19th century. The constitutional revolution of 1896AD in Iran was the breakthrough for small business to enter the spotlight and with the scent of democracy across the country small business sought to fulfill their rightful position in the society by taking high ranking positions from the parliament to ministers to ambassadors as well as entrepreneurs. This movement was well received during the mid-20th century when the pro-western regime at the time supported and encouraged small business to enter the society and participate in the community more and more.
However, one needs to understand that Iran has a sensitively religious society mixed with a long cultural scent of male supremacy that has bonded with the land for too long to be eradicated so easily. Although Iran is much different from its Arab neighbors where the small business are even deprived of basic human rights such as voting and even driving, in Iran, small business are free to vote, drive, open businesses, manage and even be elected to represent their community in the national parliament. Hence, ever since the Islamic Revolution of 1979, small business have also been more active in studying and in fact, according to recent figures more than two-thirds of university graduates are small business in Iran.
Storey & Greene (2010) states that small business have been the key to sustainable progress in Iran and having so many educated small business who provide the back bone of the economy is a true asset to Iranian society. These educated small business, whether they work as employees, employers or even marry and become mothers and raise the future generation of Iranians are the main assets of this country. Nevertheless, Storey & Greene (2010) expresses his concern to two factors that small business entrepreneurs have and will face in Iran’s ever growing economy in the 21st century. First of all, he believes that sexual discrimination is a key factor in pulling small business back, especially because that it is a cultural issue, “hidden under the skin of the society not displaying itself in bureaucratic but in credential interactions.” p.11
Conclusion
Small business managers are leaders and leaders need to be recognized, complied upon and taken seriously in the society. He provides an analogy of having a leader with no armies and no soldiers. It is an undeniable fact that small business need to be recognized for them to lead successfully and defiantly and without that recognition such success is impossible to achieve. In fact, it goes without saying that Iranian small business could only achieve their full potential in managerial position when Iranian men begin to take them seriously and acknowledge their success and support them in case of failure rather than capitalize on their success for if such cooperation does not succeed, the economy could never be improved.
References
Gorman, G., Hanlon, D., & King, W. (1997). Some research perspectives on entrepreneurship education, enterprise education and education for small business management: a ten-year literature review. International Small Business Journal, 15(3), 56-77.
Hatten, T. S. (2015). Small business management: Entrepreneurship and beyond. Cengage Learning.
Jennings, P., & Beaver, G. (1997). The performance and competitive advantage of small firms: a management perspective. International Small Business Journal, 15(2), 63-75.
Longenecker, J., Petty, J., Palich, L., & Hoy, F. (2013). Small business management. Cengage Learning.
Schaper, M., Volery, T., Weber, P., & Lewis, K. (2010). Entrepreneurship and small business.
Solomon, G. T., Weaver, K. M., & Fernald, L. W. (1994). A historical examination of small business management and entrepreneurship pedagogy.Simulation & Gaming, 25(3), 338- 352.
Storey, D. J., & Greene, F. J. (2010). Small business and entrepreneurship. Financial Times Prentice Hall.
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