Title: Analysis of dynamics and opportunity cost of SME operations

Authors: Virupaxi Bagodi; Deepankar Sinha

Addresses: Government Engineering College, Talakal, 583238, India ' Indian Institute of Foreign Trade, Kolkota, 700100, India

Abstract: SMEs contribute significantly to the economy but have inconsistent growth and high mortality rates. Authors intend to comprehend the dynamics arising out of product-mix, markets, and governance affecting SME performance. Two hundred responses were obtained using a questionnaire. Cluster analysis was adopted for investigation. For each cluster, Bayesian-Pearson-correlation and Bayesian-linear-regression were carried out to determine the associations that were not explicit (frequentist approach). Results imply that a standard policy does not suit all SMEs and requires different prescriptions. Manufacturers of fixed type-of-products and those operating in the export-market show greater stability. Family businesses have slower growth rates but better customer-relations. Overtime and delay due to changes in production scheduling are two main ailments. None of the SMEs are lean and resilient. SMEs be categorised on their stage in the organisational life cycle, market it operates, ownership, type of product, supply-chain, and operations philosophy for better policy making.

Keywords: small and medium enterprises; SMEs; cluster analysis; frequentist and Bayesian approaches; opportunity cost; performance.

DOI: 10.1504/IJPQM.2023.129605

International Journal of Productivity and Quality Management, 2023 Vol.38 No.2, pp.166 - 192

Received: 23 Mar 2021
Accepted: 14 May 2021
Published online: 17 Mar 2023 *

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