Examine the nature of the distinctive managerial, organisational and developmental characteristics of small businesses vis-à-vis well resourced large companies. What are the implications of such distinctiveness for small businesses attempting to achieve sustained growth?
Introduction
In this assignment, I will be talking about the nature of the distinctive managerial, organisational and developmental characteristics of small businesses and I will be comparing it with large organisations.
I will also be discussing the implications of such distinctiveness for small business attempting to achieve sustained growth.
Characteristics of small businesses
Small firms have been recognised as the backbone of economic development in western economies. It has a strong influence of owner-manager which means that most of the decisions made are from the owner of the firm, who also manages the business. Small businesses and owner- managers are often treated as a homogenous group, particularly for policy purposes, this is however a gross-over implication.
There are a couple of features that are conventional to small firms and highlight their approach to management and business, which are:
• Short-term horizons
• Short of cash
• Raising finance
• Local orientation
• Little influence on the market
• Scope of activity limited
• Over reliance on small number of customers
Section 248 of the companies Act of 1985 confirms that small firms should have the following criteria:-
• A turnover of no more than £2.8 million
• A balance sheet total of no more th ...