This survey is about recognizing patterns in the way Small and Medium Enterprises (SMEs) organize their procurement activities. The scope of the survey is limited to the key commodities of the SME.A key commodity is defined as the purchased product or service group which is essential for realizing the value proposition for the customers of the SME.Prior outcome of our research indicated the existence of four procurement oriented patterns in SMEs. 4 Procurement Oriented Patterns where part of the study: Pattern 1 Focal company: ICT turn-key designerValue proposition of the focal company: ICT Design and assembly of offices on a high quality level at a reasonable price. Operational excellence: standardization in commodities, low transaction costs internally and externallyPurchased key commodity: Standard ICT software and hardwarePattern 2 Focal company: Horse shoes manufacturerValue proposition of the focal company: Standard horse shoes assortment at reasonable prices in a competitive environmentPurchased key commodity: Standard quality iron, reliable deliveryPattern 3 Focal company: IT innovation driven companyValue proposition of the focal company: Developing innovative software made applicable for practical usage in devices at a reasonable pricePurchased key commodity: Delivering applicable solutions on the bases of regular soft- and hardware, to enable the companies’ innovative software function in practicePattern 4 Focal company: designer and manufacturer of trailersValue proposition of the focal company: Designing and manufacturing trailers tailor made for specific requirements of customersPurchased key commodity: Designing and manufacturing axles which align to the specific trailer wishes of the customer of the focal companyFINDINGS Pattern recognitionAbout 50 % of the respondents recognized the four presented patterns from own experience and/or read literature. Respondents also suggested pattern variants. It is concluded that this Delphi study strengthens the view that these patterns exist in SMEs. Further research may include further empirical testing of these patterns and their variants. Perceived strengths or weaknesses. Respondents mentioned a wide variety of strengths and weaknesses of the patterns. No clear conclusions can be drawn from this data. Adequacy of the pattern descriptions. One of the outcomes of this Delphi study is an improved conceptual framework for describing procurement activity patterns. This framework can be used for collecting SME data in future research, for example by modifying the existing survey questions which are used in the WIM research program to describe SME procurement activities. The improved model includes more variables and values than the initial model. Thus future research may lead to more detailed patterns descriptions. Missing patterns and pattern variantsApart from the suggested pattern variants, respondents do not miss patterns which are quite different from the four patterns suggested by the research team. Methodological remarksThe Delphi study method did not allow for fast feedback on panel member contributions and fast group think processes. For the future it is advised to consider other methods in similar cases, for example the World Cafe method.
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PurposeIn order to better understand how heuristics are used in practice, the authors explore what type of heuristics is used in the managerial domain of financial advisors to small and medium-sized enterprises (SMEs) and what influences the shaping of these heuristics. In doing so, the authors detect possible fast-and-frugal heuristics in day-to-day decision-making of independent financial advisers who help owners of SMEs to acquire capital (e.g. loans, factoring, leasing and equity).Design/methodology/approachThe authors inductively assessed the work of financial advisers of SMEs. Based on group discussions, the authors drew up a semi-structured interview-protocol with descriptive questions about how financial advisers come to a deal for their clients. The interviews of 19 professionals were analysed by relating them to the theory of fast-and-frugal heuristics.FindingsWithin their decision-making, advisers estimate the likelihood of acceptance by a few financial providers they know well in their personal network with a strong bias towards traditional banking products, although there are a large number of alternatives on the Dutch market. “Less is more” seems to be a relevant principle when defined as satisficing. Heuristics help advisers to deal with behavioural and economic limitations. Also, the authors have found that client interaction, previous working experience and the company the adviser is working for influences the shaping of the simple rules the adviser is using.Research limitations/implicationsThe study shows how difficult it is to understand the ecological rationality of a certain group of professionals and to understand the “less is more” principle. Financial advisers to SMEs use cognitive shortcuts and simple rules to advise SME-owners, based on previous experiences, but it is difficult to determine whether that leads to the same or even better solutions for them and their clients than using probability theory and financial optimisation models. Within heuristics, satisficing seems to be a dominant mechanism. Here, heuristics help advisers in recognising possibilities by searching for similarities between a current financing case and previous experiences. The data suggests that if “less is more” is defined as satisficing for one or more stakeholders involved, the principle dominates the decision making of financial advisers of SME's.Practical implicationsThe authors suggest the relevance of a behavioural approach to finance by assessing the day-to-day decisions of financial advisers of SMEs. Also, the authors suggest that financial advisers are guided by previous experiences, and they do not fully assess a wide range of options in their work but need shortcuts to fulfil the needs of their clients.Originality/valueThe study comes close to day-to-day decision-making in finance by assessing how professionals make decisions. The authors try to understand types of heuristics in relation with “ecological rationality” and the less is more principle. The authors assess financial advisers of SME-companies, a group that has gotten little research attention until now. The influence of client interaction and of the company the adviser is working for is remarkable in the shaping of the advisers' simple rules.
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Paper for the WION - Werkgemeenschap Inkoop Onderzoek Nederland - 2015, 3rd version.Purchasing within Small and Medium-sized Enterprises (SMEs) is important for the overall SME firm performance. However, purchasing within SMEs is not the same as purchasing within larger organisations and there is limited conclusive research on how to improve the purchasing performance of SMEs. This article describes research done by four bachelor students on the purchasing function within four Dutch manufacturing SMEs.
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Draft research proposal; 20 JAN 2013. Preliminary proposal for a 3 (max 4) year research project leading to a PhD. In preparation for the WION workshops on Advanced Purchasing Research and to be worked out in more detail as a PhD research proposal before MAY 2013. The research objective is to find out: How innovating SMEs can best use Industrial Property Rights (patents) within value chains with their (SME) suppliers and their (SME) customers, what are best practices and improvement areas, what is a suitable theoretical framework, how can enterprises, business researchers & practitioners benefit from applying this framework.
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According to various authors access to financing is one of the main limitations constraining further growth for small- and medium sized enterprises (SMEs). Hence, academics and policymakers showed great interest in the topic of access to financing for SMEs. Various researchers argued the competitive advantage of large traditional banks in SME lending over smaller institutions. These institutions with more market power may charge higher financing costs and apply stricter credit policies for SME clients further affecting credit availability. In the past decade, SME financiers have entered the market as a response to the market domination of these large institutions. These new parties must gain trust as they operate in a market that is not regulated. Where traditional banks must comply with strict banking regulations, developing uniform regulations for the alternative financing sector remains a challenge. This paper examines the current challenges and solutions from a sociological and institutional perspective in developing standards for SMEs in the alternative financing sector. Our study contributes to the SME finance literature as it is the first empirical study that explicitly examines the regulatory gap in SME financing through interaction with policymakers, SME entrepreneurs, traditional banks as well as SME financiers themselves. Note: this is a confidential paper, part of a Phd-program and awaiting publication (as per August 2024)
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This paper analyzes connectivity and efficiency of a SME network across two industries. These characteristics are likely to be different for networks of various industries. The concept of 'small worlds' is used to judge overall network efficiency. The actual network can be classified as one in which a small world is present. Visualization of the results shows a single core group in the network. It was found that non-profit as well as science actors were overrepresented in the core of the field.
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The shift towards a more sustainable circular economy will require innovations. While SMEs can contribute to this development, financing innovations within SMEs is difficult. Various authors have not ed moreover that the concept of the circular economy has further increased the complexity of investment decisions concerning sustainable innovations, due to the multiple value creation and new business models involved . On the other hand
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Over the past 10 years, different types of financing have become available in the Netherlands. It is now possible to combine bank loans, crowdfunding loans and risk capital. Moreover, fintech applications lower the threshold for applications and reduce response times from weeks to just days or even hours. Fraser, Bhaumik and Wright (2015) point out there is a lack of knowledge of the cognitive process involved in selecting SME financing. This paper looks into the selection process financial advisers use, against the backdrop of the growing range of funding possibilities. To assess this process, we try to understand dominant habits and related heuristics. Within our explorative study, 19 experienced and independent SME financial advisers were interviewed. The questions address their knowledge, skills, experiences and choices in the selection process on the financing or refinancing of working capital and growth. Taking a grounded theoretical approach, we use Atlas TI to label all answers and statements step by step. The findings suggest a strong bias of decision-making towards the more traditional banking products. Yet advisers state they are aware of, and familiar with, other solutions. We have also found that fintech solutions are hardly used to prepare financing solutions up front. Financial advisers estimate the likelihood of acceptance by a few financial providers they know well within their personal network. We suggest that there is a behavioural approach to financing in the day-to-day decisions made by financial advisers. As long as automated selections are not fully transparent and are unable to combine all types of financing up front, financial advisers will be guided by habit or by availability, confirmation and affect heuristics, rather than looking for new financing solutions and combinations.
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The complexity of Information Technology (IT) is increasing; so are customer expectations. Consequently it is not easy for especially small and medium enterprises (SMEs) to keep track of all IT-developments, let alone leverage them in business operations with the aim to satisfy increasingly demanding customers. This also holds for the health care sector. This research is focussed on first line health care, and deals with the following research question; ‘which IT capabilities do SMEs within the first line health care sector need to have at their disposal in order to reach Business/IT-Alignment (BITA) maturity?’ Using the best practices ITIL, ASL and BiSL (cf. Bon, et al. 2007), IT capabilities are formulated. Based on the theory of Luftman (2000) business/IT-alignment and maturity is measured. Quantitative research of 123 first line health care SMEs in the Netherlands, confirms a moderate to strong correlation between the IT capability constructs ‘Organisation’, ‘Processes’, ‘Knowledge’ and ‘People’ on the one hand, and BITA maturity on the other. The results indicate that SMEs within the first line health care sector should invest in IT capabilities related to the enterprise's ‘Organisation’ and ‘Processes’ to strive for increased business and IT maturity.
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Small and Medium Enterprises (SME) comprise 99% of the European-economy, though, most research and implementation methods concerning Business Process Management Systems (BPMS) focus on large enterprises. We create a BPMS implementation method that is suitable for SMEs. Based on three existing BPMS implementation methods and by incorporating differentiators of SMEs and large enterprises a BPMS implementation method is constructed. The constructed method is validated through a series of interviews with BPMS implementation experts. Experts agree with the constructed method though discussion arise on a more detailed level of activities in the method.
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