AN EXPLORATORY STUDY OF THE PROBLEMS FACED BY LOCAL SMALL AND MEDIUM SIZED ENTERPRISES (SMES)

Abstract

There has been an increasing interest in local small and medium-sized enterprises (SMEs) by the government and academic institutions due to the recognition that this group of firms is responsible for a large percentage of total employment, making it a major contributor to the economic growth of Singapore. Thus, this research aims to investigate the common problems and challenges faced by the local SMEs and possible approaches to alleviate them. A total of forty-two companies were analyzed, through the help of final-year Business Administration students. Interviews and company visits were conducted in order to collect a thorough set of data. A set of questionnaire was also used to compile the statistical portion of the findings (See Appendix). From the findings, problems faced by the SMEs were highlighted and classified according to the functional areas like management and organization, human resource, production, finance and marketing. An attempt was also made to categorize the findings according to industry, namely, manufacturing, service and retailing, to observe any differences in the problems faced. Recommendations were also made on how the government, trade associations and SMEs can leverage on their respective roles to improve SME efficiency and competitiveness.