Share:


Determining the criticality profile of manufacturing SMEs under the influence of internal and external factors on performance

    Veronica Grosu Affiliation
    ; Corina Petrescu Affiliation
    ; Marius-Sorin Ciubotariu Affiliation

Abstract

Recent economic instability has heightened the need for companies to be aware of the threats in their internal and external environments and the impact these have on their performance capacity. Thus, this paper aims to identify the most impactful factors on the performance of small and medium-sized enterprises engaged in manufacturing activities in Romania, by conducting empirical questionnaire-based research, resulting in a database with primary data to be processed. A 5-point Likert scale was used to determine the frequency of occurrence and intensity of impact of the selected factors, the level of criticality of these factors being calculated using the mean value method. The results highlight the prevalence of external factors among the top critical factors, those with the most significant impact on the performance being the high cost of raw materials, lack of professionals and specialists, fluctuations in market demand, fluctuations in government policies and legislative regulations. The usefulness of the results obtained lies in the fact that they create a risk or criticality profile of the analyzed production sector, which makes it possible to address its critical points with the most optimal solutions in the given context, on the part of both management and government, thus ensuring increased performance.

Keyword : SMEs, manufacturing activity, impact factors, performance, internal and external environment, empirical research

How to Cite
Grosu, V., Petrescu, C., & Ciubotariu, M.-S. (2024). Determining the criticality profile of manufacturing SMEs under the influence of internal and external factors on performance. Journal of Business Economics and Management, 25(4), 751–773. https://doi.org/10.3846/jbem.2024.22068
Published in Issue
Sep 5, 2024
Abstract Views
255
PDF Downloads
250
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

References

Andersen, T. A. (2022). How are European SMEs impacted by the Russian invasion of Ukraine? SME Envoy Network. https://single-market-economy.ec.europa.eu/system/files/2022-09/SME%20Envoy%20report%20Economic%20Effects%20of%20the%20Russian%20Invasion%20of%20Ukraine%20Fin.pdf

Aydin, R., Brown, A., Badurdeen, F., Li, W., Rouch, K. E., & Jawahir, I. S. (2018). Quantifying impacts of product return uncertainty on economic and environmental performances of product configuration design. Journal of Manufacturing Systems, 48, 3–11. https://doi.org/10.1016/j.jmsy.2018.04.009

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99–120. https://doi.org/10.1177/014920639101700108

Barney, J. B. (2018). Why resource-based theory’s model of profit appropriation must incorporate a stakeholder perspective. Strategic Management Journal, 39(13), 3305–3325. https://doi.org/10.1002/smj.2949

Bennett, J., & McGuinness, S. (2009). Assessing the impact of skill shortages on the productivity performance of high-tech firms in Northern Ireland. Applied Economics, 41(6), 727–737. https://doi.org/10.1080/00036840601007450

Bettiol, M., Capestro, M., Di Maria, E., & Micelli, S. (2023). Ambidextrous strategies in turbulent times: The experience of manufacturing SMEs during the COVID-19 pandemic. International Journal of Physical Distribution & Logistics Management, 53, 248–272. https://doi.org/10.1108/IJPDLM-10-2021-0422

Butdee, S., & Phuangsalee, P. (2019). Uncertain risk assessment modelling for bus body manufacturing supply chain using AHP and fuzzy AHP. Procedia Manufacturing, 30, 663–670. https://doi.org/10.1016/j.promfg.2019.02.094

Camonita, F., Dantas, C., Tageo, V., Moreira, A., Corsello, A., & Louceiro, J. (2022). Crisis costs for European SMEs: How COVID-19 changed the playing field for European SMEs? European Economic and Social Committee. https://www.eesc.europa.eu/sites/default/files/files/qe-04-22-239-en-n.pdf

Çera, G., Belas, J., & Zapletalikova, E. (2019). Explaining business failure through determinist and voluntarist perspectives. Serbian Journal of Management, 14, 257–275. https://doi.org/10.5937/sjm14-23348

Chan, S. W., Tasmin, R., Nor Aziati, A. H., Rasi, R. Z., Ismail, F. B., & Yaw, L. P. (2017). Factors influencing the effectiveness of inventory management in manufacturing SMEs. IOP Conference Series: Materials Science and Engineering, 226, Article 012024. https://doi.org/10.1088/1757-899X/226/1/012024

Ciubotariu, M., (2013). The role of small and medium enterprises in the modern economy and the importance of IFRS application for SMEs. The USV Annals of Economics and Public Administration, 13(1(17)), 201–210. http://annals.feaa.usv.ro/index.php/annals/article/viewFile/520/561

Dmitrijeva, J., Schroeder, A., Ziaee Bigdeli, A., & Baines, T. (2020). Context matters: How internal and external factors impact servitization. Production Planning & Control, 31, 1077–1097. https://doi.org/10.1080/09537287.2019.1699195

Douhan, R., & Henrekson, M. (2010). Entrepreneurship and second-best institutions: Going beyond Baumol’s typology. Journal of Evolutionary Economics, 20, 629–643. https://doi.org/10.1007/s00191-010-0174-4

Du, L., Razzaq, A., & Waqas, M. (2023). The impact of COVID-19 on small- and medium-sized enterprises (SMEs): Empirical evidence for green economic implications. Environmental Science and Pollution Research, 30, 1540–1561. https://doi.org/10.1007/s11356-022-22221-7

Engidaw, A. E. (2022). Small businesses and their challenges during COVID-19 pandemic in developing countries: In the case of Ethiopia. Journal of Innovation and Entrepreneurship, 11, Article 1. https://doi.org/10.1186/s13731-021-00191-3

Erdiaw-Kwasie, M. O., Abunyewah, M., Yusif, S., & Arhin, P. (2023). Small and medium enterprises (SMEs) in a pandemic: A systematic review of pandemic risk impacts, coping strategies and resilience. Heliyon, 9(10), Article e20352. https://doi.org/10.1016/j.heliyon.2023.e20352

Fanggidae, H. C., Sutrisno, S., Fanggidae, F. O., & Permana, R. M. (2023). Effects of social capital, financial access, innovation, socioeconomic status and market competition on the growth of small and medium enterprises in West Java province. The ES Accounting and Finance, 1, 104–112. https://doi.org/10.58812/esaf.v1i02.69

Ozdemir, S., Fernandez De Arroyabe Fernandez, J. C., Sena, V., & Gupta, S. (2023). Stakeholder diversity and collaborative innovation: Integrating the resource-based view with stakeholder theory. Journal of Business Research, 164, Article 113955. https://doi.org/10.1016/j.jbusres.2023.113955

Germain, R., Claycomb, C., & Dröge, C. (2008). Supply chain variability, organizational structure, and performance: The moderating effect of demand unpredictability. Journal of Operations Management, 26(5), 557–570. https://doi.org/10.1016/j.jom.2007.10.002

Guan, X., & Frenkel, S. (2018). How perceptions of training impact employee performance. Personnel Review, 48(1), 163–183. https://doi.org/10.1108/PR-05-2017-0141

Hallgren, M., & Olhager, J. (2009). Lean and agile manufacturing: External and internal drivers and performance outcomes. International Journal of Operations & Production Management, 29(10), 976–999. https://doi.org/10.1108/01443570910993456

Ismael, D., & Shealy, T. (2018) Sustainable construction risk perceptions in the Kuwaiti construction industry. Sustainability, 10(6), Article 1854. https://doi.org/10.3390/su10061854

Kaydos, W. (1998). Operational performance measurement. Increasing total productivity. Boca Raton. https://doi.org/10.1201/9781420049053

Leonidou, L. C., Christodoulides, P., Kyrgidou, L. P., & Palihawadana, D. (2017). Internal drivers and performance consequences of small firm green business strategy: The moderating role of external forces. Journal of Business Ethics, 140, 585–606. https://doi.org/10.1007/s10551-015-2670-9

List of companies. (n.d.). https://www.listafirme.ro/

Lockett, A., Thompson, S., & Morgenstern, U. (2009). The development of the resource-based view of the firm: A critical appraisal. International Journal of Management Reviews, 11(1), 9–28. https://doi.org/10.1111/j.1468-2370.2008.00252.x

Lu, D., Ding, Y., Asian, S., & Paul, S. K. (2018). From supply chain integration to operational performance: The moderating effect of market uncertainty. Global Journal of Flexible Systems Management, 19, 3–20. https://doi.org/10.1007/s40171-017-0161-9

Mates, D., Turcanu, V., Grosu, V., & Iancu, E. (2008). Methods of analyzing companies’ performance in accounting using expert systems. Journal of Applied Computer Science & Mathematics, 2(2), 28–31.

McGahan, A. M. (2021). Integrating insights from the resource-based view of the firm into the new stakeholder theory. Journal of Management, 47(7), 1734–1756. https://doi.org/10.1177/0149206320987282

Melega, A., Grosu, V., Macovei, A. G., & Botez, D. (2022). Clustering based bibliometric analysis of the business performance concept. Studies and Scientific Researches. Economics Edition, (35), 6–18. https://doi.org/10.29358/sceco.v0i35.506

Minguella-Canela, J., Morales Planas, S., Gomà Ayats, J., & De Los Santos López, M. (2018). Assessment of the potential economic impact of the use of AM technologies in the cost levels of manufacturing and stocking of spare part products. Materials, 11, Article 1429. https://doi.org/10.3390/ma11081429

North, D. C. (1990). Institutions, institutional change, and economic performance. Cambridge University Press.

Okoye, P. U., Okolie, K. C., & Odesola, I. A. (2022). Risks of implementing sustainable construction practices in the Nigerian building industry. Construction Economics and Building, 22(1). https://doi.org/10.5130/AJCEB.v22i1.7420

Petrescu, C., Grosu, V., & Brinzaru, S. M. (2023). Theoretical approach to the concepts of economic, accounting and managerial profile of production SMEs. European Journal of Accounting, Finance & Business, 11(1). https://doi.org/10.4316/EJAFB.2023.1118

Porter, M. E. (1989). From competitive advantage to corporate strategy. In D. Asch & C. Bowman (Eds.), Readings in strategic management (pp. 234–255). Springer. https://doi.org/10.1007/978-1-349-20317-8_17

Reis Neto, M. T., Silva, L. C. F. D., & Ferreira, C. A. A. (2018). Influence of internal communication on the organizations’ performance: Proposition of model. Future Studies Research Journal: Trends and Strategies, 10, 214–237. https://doi.org/10.24023/FutureJournal/2175-5825/2018.v10i2.376

Rudiawarni, F. A., Tjahjadi, B., Agustia, D., & Soewarno, N. (2022). Business strategy and industrial competition: The case of manufacturing companies. International Journal of Business Environment, 13(1), 35–59. https://doi.org/10.1504/IJBE.2022.120333

Sagawa, J. K., & Nagano, M. S. (2021). Integration, uncertainty and information: How do they affect planning performance? Revista de Gestão, 28(1), 23–49. https://doi.org/10.1108/REGE-11-2019-0113

Salah, A., Çağlar, D., & Zoubi, K. (2023). The impact of production and operations management practices in improving organizational performance: The mediating role of supply chain integration. Sustainability, 15(20), Article 15140. https://doi.org/10.3390/su152015140

Samsudin, S., Jalil, N. H. M., & Ibrahim, M. (2017). Exploring the pattern of internal communication in total quality management implementation in manufacturing companies. SHS Web of Conferences, 33, Article 00078. https://doi.org/10.1051/shsconf/20173300078

Shia, J., Yang, J., & Li, Y. (2019). Supply network position and firm performance: Evidence from Chinese listed manufacturing companies. Journal of Business Economics and Management, 20, 1258–1277. https://doi.org/10.3846/jbem.2019.10743

Singh, R. K., Modgil, S., & Tiwari, A. A. (2018). Identification and evaluation of determinants of sustainable manufacturing: A case of Indian cement manufacturing. Measuring Business Excellence, 23(1), 24–40. https://doi.org/10.1108/MBE-08-2018-0056

Siregar, D. I., Astuti, A. T., Hardilawati, W. L., Ahmadi, Siregar, Z. M. E., & Hamdani, R. (2023). Linking dynamic capability, supply chain and raw material uncertainty to Indonesian SMEs manufacturing operational performance. Quality Access to Success, 24(193), 39–45. https://doi.org/10.47750/QAS/24.193.05

Srinivasan, S., & Khan, S. H. (2018). Multi-stage manufacturing/re-manufacturing facility location and allocation model under uncertain demand and return. International Journal of Advanced Manufacturing Technology, 98, 2847–2860. https://doi.org/10.1007/s00170-017-1066-7

Surange, V., & Bokade, S. (2022). Critical risk factors in the industrial sector: A review. Industrial Engineering Journal, 15(10).

Tsarouhas, P. H. (2020). Overall equipment effectiveness (OEE) evaluation for an automated ice cream production line. International Journal of Productivity and Performance Management, 69(5), 1009–1032. https://doi.org/10.1108/IJPPM-03-2019-0126

Utami, H., & Alamanos, E. (2023). Resource-based theory: A review. In S. Papagiannidis (Ed.), TheoryHub book. TheoryHub. https://open.ncl.ac.uk

Visnjic, I., Wiengarten, F., & Neely, A. (2016). Only the brave: Product innovation, service business model innovation, and their impact on performance. Journal of Product Innovation Management, 33, 36–52. https://doi.org/10.1111/jpim.12254

Yuan, M., Li, Z., Li, X., & Luo, X. (2021). Managing stakeholder-associated risks and their interactions in the life cycle of prefabricated building projects: A social network analysis approach. Journal of Cleaner Production, 323, Article 129102. https://doi.org/10.1016/j.jclepro.2021.129102