Financing of SME's: an asset side story

The main sources of financing for small and medium sized enterprises (SMEs) are equity (internally generated cash), trade credit paid on time, long and short term bank credits, delayed payment on trade credit and other debt. The marginal costs of each financing instrument are driven by asymmetric information (cost of gathering and analysing information) and transactions costs associated with non-payment (costs of collecting and selling collateral). According to the Pecking Order Theory, firms will choose the cheapest source in terms of cost. In the case of the static trade-off theory, firms choose finance so that the marginal costs across financing sources are all equal, thus an additional Euro of financing is obtained from all the sources whereas under the Pecking Order Theory the source is determined by how far down the Pecking Order the firm is presently located. In this paper, we argue that both of these theories miss the point that the marginal costs are dependent of the use of the funds, and the asset side of the balance sheet primarily determines the financing source for an additional Euro. An empirical analysis on a unique dataset of Portuguese SME's confirms that the composition of the asset side of the balance sheet has an impact of the type of financing used and the Pecking Order Theory and the traditional Static Trade-off theory are rejected.

A work-based research assessment of the impact of 'lean manufacturing' on health and safety education within an SME

Globalisation has had a major impact on the engineering industry as pacific Rim countries undercut manufacturing costs and provide a more cost-effective location for many businesses. Engineering in Nortehrn Ireland has mostly declined owing to increased competition from these countries. Engineering companies are now forced to streamline their production processes and employ cost-reducing practices in order to meet customer demands at reduced prices. This article aims to analyse the effects of one such streamlining endeavour which was first introduced after World War II in Japan- 'lean manufacturing' . 'Lean manufacturing' aims to reduce all wasteful activities within the production process in order to improve productivity, while reducing manufacturing costs. The work-based project under consideration was concerned with the impact 'lean manufacturing' may have on health and safety performance and education within an engineering company. The focus of the project was to determine through work-based research, and quantitative analysis, the employee perception on health and safety: has it changed (either positively or negatively), as a consequence of implementing 'lean manufacturing'.

An examination of regional policy implications pertaining to SME E-Business adoption in South-East Wales

Regional policy frameworks need to focus on strengthening the ICT infrastructure, clarifying market rules to build user confidence, developing networks, facilitating ICT-enabled clustering and infrastructure sharing.

Vulnerability and robustness of SME supply chains: An empirical study of risk and disturbance management of fresh food processors in a developing market

The aim of this paper is to analyse vulnerability and robustness of small and medium size enterprises (SMEs) supply chains and to consider contextual factors that might influence the success of their disturbance management: Risky product and business environment. By using an exploratory case study it is shown how these contextual factors attribute vulnerability sources, contribute to the robustness of a company’s performance and supply chain vulnerability, as well as how a company seeks to manage internal and external vulnerability sources. The exploratory case is based on a fresh food supply chain of a manufacturing SME operating in a developing market.
Case findings suggest that fresh food supply chains of a manufacturing SME in developing markets are prone to disruptions of their logistics and production processes due to ‘riskiness’ of fresh food products, the ‘riskiness’ of developing markets, as well as ‘riskiness’ of SMEs themselves. However, this does not necessarily indicate the vulnerability of an SME and its entire supply chain. Findings indicate that SMEs can be very successful in disturbance management by selective use of redesign strategies that aim to prevent or reduce the impact of disturbances. More precise, it is likely that an SME can achieve robust performance by employing preventive redesign strategies in managing disturbances that result from internal, company related vulnerability sources, while impact reduction strategies are likely to contribute to robust performance of an SME if used to manage disturbances that result from internal, supply chain related vulnerability sources, as well as external vulnerability sources.

The European challenge of KMN and innovation: a skills and competence portfolio for knowledge worker in SME's

Versão editor: http://www.isegi.unl.pt/docentes/acorreia/documentos/European_Challenge_KM_Innovation_2004.pdf