Small & Medium Enterprise (SMEs)ManagementDr. Dina Preston-Ortiz

Dr. Dina Preston-Ortiz

Introductions◦ Faculty

Academic Background Small Business Owner

U.S. Small Business◦Small Business Defined◦Summary

Agenda

Small Business Management Environment

U.S. Small Business Ownership Definition What is a small business?

◦ Home-base to several hundred employees◦ Independently owned and operated◦ Not dominant in the field◦ Meets specific industry size and standards for

income and number of employees (SBA)

Small businesses serve as an entry point into the U.S. economy for new or previously slighted workers:

◦ women-owned small businesses; for instance; generate nearly a trillion dollars in revenues annually and employ more than 7 million workers.

Contribute to innovation◦ Small businesses produce 13 to 14 times more patents per employee than do

large firms.◦ Small businesses employ 39 percent of high-tech workers

scientists; engineers; and information technology workers; generating the majority of innovations that come from U.S. companies.

These businesses are able to pioneer new alliances and partnerships

According to the U.S. Small Business Administration (2012), small firms represent:

99.7% of all employers, generate 60% to 80% of new jobs annually and account for 97% of all U.S. exporters.

The U.S. service exports have grown more than 289% faster than exports of goods and play a major role in fortifying the U.S. economy.

Since 1971, the U.S. service sector has generated a trade surplus that has consistently reduced the U.S. trade deficit. (p.1-8)

Examples of U.S. Export Services

U.S. Economic Impact of SMEs Business

Accounting TechnicalAdvertising Health CareBusiness services FinancialConsulting Professional ServicesEngineering Public RelationsEntertainment Telecommunications

Closed System/Mechanistic◦ Bureaucratic

centralized information Open System/Organic

◦ Virtual/technology environments decentralized

Changing shape of organizations in 21st Century◦ Hourglass◦ Cluster◦ Virtual Organization◦ Learning Organization

Management Implications? Flexibility Awareness of how culture influences behavior (Cultural Intelligence)

High context vs. low context Individualist vs. collective cultures Monochronic vs. polychronic time dimensions Internpersonal space Language and religion

SME Globalization & Management Structures

SMEs Entrepreneur & SME Business

Entrepreneurs, Intrapreneurer business owners, and managers.

Characteristics◦ Risk takers◦ High tolerance for failure◦ Resourcefulness◦ Good with people◦ Deals well with

uncertainty

Pros◦ Flexibility◦ Superior customer service◦ Development innovative

products◦ Fill small market niches

Cons◦ Fewer resources◦ Financial limitations◦ Management

inadequacies◦ Tax burdens

Characteristics Pros & Cons

Small Business Process

Small Business Start-Up Process Crafting a Business Plan

Select an Idea Start-up Buy existing Franchise

Build a Business Plan Marketing plan/ financials

Obtain Financing Debt Equity Venture Angel

Build Resources Factors of Production

Executive summaryIntroductionMarketingFinancialsStaffing NeedsResume of the principals

Small Business Management

• Management Skill• Technical• Knowledge• Human Relations• Conceptual• Decision Making

• Management Functions• Planning• Organizing• Directing/Leading• Controlling

• Organizational Culture

Top Management Long range strategic

plans Public relations

Middle Management Intermediate goals

tactical plans/processes

First Line Managers Short-term goals

Operational

SMEs Planning & Business Decisions

• Strategic• Primary objectives• Mission Statements• SWOT Analysis

• Tactical• Implements strategic plan• Outlines what organization must

address• production, marketing,

personnel, finance and plant facilities

• Operational• Day to day activities

• Adaptive/Contingency• Plan B• Crisis management

• Address the problem• How it will be fixed• Communication to the public

• Programmed decisions• Nonprogrammed

• Problem/opportunity recognition

• Develop alternative course of action

• Evaluate alternatives• Select and implement

alternative• Follow-up

Decision Making Planning Levels

SMEs Strategic Planning Process

Complete SWOT Analysis:◦Strengths (internal)◦Weakness (internal)◦Opportunity (external)◦Threats (external)

Define organization’s mission statement◦ What business are we in?◦ What customer do we serve?◦ How do we develop the organization’s capabilities and focus it’s efforts?

To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. (Starbucks, n.d.)

Google’s mission is to organize the world’s information and make it universally accessible and useful.

(Google, n.d.)

Complete a SWOT Analysis on your University Department Strengths Weakness Opportunities Threats (T)rends

Write a mission statement that will lead the college department in the upcoming year based on your results. Share with class

Apply

Define Small Business U.S. Economic Impact of SMEs Business SME Globalization & Management

Structures Small Business Process Small Business Management SME Planning Levels & Decision Making SWOT Analysis: Strategic Planning Tools

Summary & Questions

Kreinter, R. (2012). Management. New York, New York: Houghton Mifflin.

Ebert, R. & Griffin, R. (2012). Business Essentials. Upper Saddle New Jersey: Prentice Hall.

Starbucks (n.d.) Our Starbucks Mission Statement. Retrieved from http://www.starbucks.com/about-us/company-information/mission-statement

Google (n.d.) Google Company. Retrieved from http://www.google.com/about/company/

References