Role of Small and Medium Enterprises

Role of Small and Medium Enterprises in Barking and Dagenham towards the Local Economy

Introduction1

Problem Statement2

Research question3

Research Objectives3

Structure of the Research4

Chapter 14

Chapter 24

Chapter 34

Chapter 44

Chapter 55

Role of SMEs6

Challenges for SMEs7

Lack of Discipline and Formal Procedure8

Uneven Management Skills8

Lack of Financial Resources8

Lack of IT Support8

Lack of IT Literacy9

Lack of Human Resources9

SMEs in comparison to Large Organisations9

SMEs' rising share in employment11

More jobs created by SMEs11

Global Reach of SMEs12

Benefits of SMEs for Local Economy14

Opportunities for SMEs in Barking and Dagenham16

Research Methodology18

Qualitative Approach18

Case Study Method18

Research Hypothesis19

Ethical Considerations and Disclaimer20

Limitations of the Research20

Findings22

Discussion31

Conclusion and Recommendation33

Conclusion33

Recommendations34

List of Figures

Figure 1: McDonald Sales in the EU (2006-2010)24

Figure 2: Estimated growth in McDonald's net turnover minus real GDP growth, 2006-201025

Figure 3: Estimated total impact of McDonald's salaries and wages in the EU (2010)25

Figure 4: Length of McDonald's relationship with the largest European suppliers27

Figure 5: % increase in McDonald's MAAP scores (progress, 2004-2009)28

Figure 6: McDonald's supplier improvements in environmental management (2008 vs. 2009)28

Figure 7: Number of franchised restaurants in Europe (2006-2010)29

Figure 8: New McDonald's franchisees in Europe (2007-2009)30

Role of Small and Medium Enterprises in Barking and Dagenham towards the Local Economy

Introduction

The enterprises where there is less than 250 employees work are known as Small and Medium sized Enterprise (SMEs). The definition of SMEs varies technically from region to region however; it is normally based on the assets, employment or combination of both. There are different definitions of SMEs in few countries related to service and manufacturing sector. Some authors have been able to provide extremely important definitions related to SMEs in which most common definition was given by Fong (1971) where he stated that the business that do not exceed more than 100 employees is known as SME. Other authors defined SME as a business, which normally turn around entrepreneur or the owner. Verhees and Meulenberg (2004) raised the same point that SME is a business that is managed and controlled by the owner without any involvement of other stakeholder (Blackburn, 2003, p. 154).

Small and medium enterprises have had an important role in the development of many economies (Asheim, 2003). Every big corporation starts out small, and grows out to be big. Barking and Dagenham is an outer London Borough which has the aim of supporting and sustaining small and medium enterprises. These enterprises have played an important role in the development of this borough which in turn has contributed to the local economy. Developed, developing, and under developed countries in their cycle of development have realised the importance of SMEs for their economic growth and development. SME's are also viewed as significant contributors to the Gross National Product (GNP), and their ability to generate self-employment. SMEs have a significant role on creating wealth, and reducing poverty (Nelson & Prescott, 2003).

Historically, SMEs have played an imperative role to contribute towards the progress of different countries economically all over the globe and no growth is considered when few people employ the benefits of economic reforms while greater elements are being ...