Tài liệu barriers to development of high technology small and medium sized enterprises potx

They are highly innovative and enterprise companies, organizations enhancing knowledge, which function where economy and science meet commercializing solutions based on scientific resear

BARRIERS TO DEVELOPMENT OF HIGH-TECHNOLOGY SMALL AND MEDIUM-SIZED ENTERPRISES

Marek Matejun

A Series of Monographs

Lod 2008,

Professor Edward Stawasz

Editorial Board of The Technical University Press Editor in Chief: Professor Piotr Wod

Scientific Editor of the Division: Professor Je isi, Ph D.,D Se ewandowski, Ph D., D Se

© Copyris Cover photo taken fro hup:H/photolinklove.com/wp-comtenUgalleryfeallery2/ by Technical University of Lodz 2008

‘TECHNICAL UNIVERSITY OF LODZ PRESS

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ISBN 978-83-7283-293-1

Edition 159 copies Printed by WEST, ul, Barona 8, 95-100 Zeer, Poland

No tới

1 The characteristics of small and medium-sized enterprises of advanced

Technologies 8 1.1 The quntaive and qualitveeiteria to disinguish smal and medion ized entries 8 T2 The small and medium sized technological companies sea suh group of he enterprises XSMBLEEiiEs.isiooiiskistiiiboeicuickbicdrbctEirloikabisadfeiisrrieaUTEr 1.3 The specific conditions ofthe fotioning of small and medium sized technological

> The notion ofthe development of the or

Bu The development ofthe organization as ongoing pmcess of chanzes 2 222" The tutors ofthe development of small nd medium sized enemies of advanced

2.4, The usige ofthe factors of development wo lit the development gap ofthe nferrise 28

3 ‘Taxonomy of barriers fo development of high-technology SMES

3.1, The division of harriers wih regard othe die they have oscurred in the course of a

Tucioning of enterprises at

$2, Oe crt for division of Sars io development of SES 33

1, General assumpdons forthe system supporting SMEs 59

52 Selected institutions supporting development of high-echnoingy SATE 2 Sic Extemal forms of supporting devslopnint of SMEs dã

id The2tatselzrisks af the xecdak:kiá Zantgadiei dã {6.1 The charactersc ofthe enerrise Makolah Jong Stock Market 6

2 The charseteristc ofthe enferprzes LTC Lid 7

1 Development priorities and external barriers in researched enterpries 79 7.1, arriens oenty and development pros of resented enterprises, 29 enifiestion am ssessment Ÿ svietralbariEps ta development in he researched

1, Ieniicaion and analysis of intel arin to developmen ofthe researc ener 9S

$2 The synthesis of conducted research andthe rests of comparative studies Ton

‘33 Actions en by the researched enterpries Tinting negative illuence of arian 109) Sig a eg (Ene ican

Hg eerste li

Small and medium-sized enterprises are seen as a

internally diverse, panticularly susceptible 1 the influence of extemal factors and determined by multidimensional and cooperational relations, High-technology SMEs (HTSMES) are a special subgroup They essentially influence enhancing competitiveness of economy in international arena, they are @ main source of innovative and technical progress and they positively influence other economic and social trends, They can be defined as emities functioning on a lesser scale in fields and branches which take into account achievements of contemporary seienee and technology They are highly innovative and enterprise companies, organizations enhancing knowledge, which function where economy and science meet commercializing solutions based on scientific research in the market

‘The question of development and inerease of SMEs, paniculasly high- technology SMEs, is an essential area of interest in companies belonging to the SME sector The development of SMEs is seen as a complex, multidimensiowal process of changes taking place in time In hterature, various approaches 10 this issue are presented, For the sake of this work, i is asstmed that the process of complementary qualitative and quantitative changes assessed positively from the point of view of assigned long-term aims of an enterprise is regarded as a company development Development barriers and inhibitors of various types, whieh hinder or make introduction of positive changes impossible, are a significant part of development processes They evoke cenain effects for the functioning of enterprises, influencing evelopment gap increase und impeding development processes, Taking into account the above considerations, multidimensional analysis of barrie

ology SMEs, assessment of their influence on sses of these entities and suggestions of actions limiting barriers

to development of high-technology SMBS, have been set as the aim of this work

‘On the basis of preliminary literature studies and the results of secondary research’, the following research hypotheses have heen marked out in support of the above aim

jences, including management seiences,

‘ereative, enterprise and very active in the market

H2: Basie barriers to development ofthe researched high-technology SMEs include

Tegal, financial bariers and those resulting from the countey policy, in larger eompanies problems inerease related to sufficient qualifications” of workers and difficulties in gaining qualified people

MS: The researched companies use forms of supporting development offered by various institutions supporting SMEs to a small extent, mainly due to high costs

of this cooperation and information shonages on offer and directions of this support

Empirical research” conducted in the form of ease study method in two high: technology SMEs was devoted to realization of the aim of this work and verification

ff research hypotheses put forward The ease study method was chosen as it is considered that the role of management sciences is mainly to provide organizations with suggestions of solving management problems, meant to he applied anu case studies showing examples of good and had management as well as est solutions (de so called best practiees) should be main method and main task of management

‘The enterprises were chosen by meaas of target method, Two entities were

‘chosen: MakoLab S.A and LTC Sp z 0.0 Both enterprises are located in the Lodz province and function in IT area, whieh allows comparability of results, On the

‘ther hand, the companies differ in size and operate in different target markets,

‘which allows to draw certain conclusions regarding varied development strategies and direetions chosen by enterprises

Empirical material was collected in enterprises by interview method Interviews were conducted with two managers working on development and implementation of high-tech information technologies Questionnaire interview technique was used as research method and extensiv jew questionnaire was a research ool, which consisted of 23 tabular questions with possibile answers fom 0

fo 5 and the possibility t6 add the respondents’ own opinions and remarks views were conducted on: 19 September 2008 (MakoLab S.A.) and 03 October

2008 (LTC Sp 20.0.)

The manager from IT depariment (business systems) of MakoLab S.A taking part in the research is a mid-level manager in the enterprise, In organizational hierarchy, he is directly subordinate to president of the company He is young Glyears old) graduate of the Institute of Technical Physics, Computer Seience and Applied Mathematies at Technieal University of Lodz, his specialty being Artificial Intelligence He has been working in MakoLab S.A sinee the year 2003 He manages the work of 19 people divided into 4 tame:

= programists team (10 people)

† Enpidal wescach was conducted within postdoctoral grant st the late of Orpasization sed Management ofthe Techical Univety of Linz ent The Huns of suppming desslopnat 13 ase mds of lifecycle of SMES" for the years 2007 2003

Sul 8, Nauki vareqdanis, We2lowe problemy konttowess, TNOIK, Tom 207, p71

6

— technical support and elient service team (4 people)

= testers team (2 people),

‘business consultants team (3 people)

‘The manager of IT team (Development Manager) in LTC Sp z 6 ig also a

‘mid-level manager in the company Similarly, he is a young (31 years old) graduate

of the lastitute of Technical Physies, Computer Science and Applied Mathematies at

‘Technical University of Lodz, his specialty being computer networks, He has been working in LTC Sp 2 0 since the year 2001, managing the work of 12 people, among whom dynamic task assignment teams are created,

The work has been divided into eight chapters and consists of two main parts — theoretical and empirieal one, Theoretical part, which consists of first five chapters, presents literature studies presenting works of Polish and foreign authors as regards considerations on the nature of a company development and hartiers to this process

In empirical part, comprising chapters from 6 w 8, own research conducted

topic has been analyzed

Chapter one is devoted to characteristics of high-twehnology SMEs Varied qualitative and quantitate crivetia enabling distinction of SMEs ftom the whole group of economic entities are presented After that, attention is paid to specific features and conditionings of functioning of high-technology SMES, which are a specific subgroup of the SME sector, Chapter two discusses the concept and canditionings for development of contemporary organizations In this part, emphasis sas put on increase Factors of high-tech companies and possibilities to use them in the process of limiting development gap are also presented

Chapter three preseats the Gxonomy of bariers wo development of high- technology SMEs, Division of barriers according to the Gime they have occured in the course of functioning of enterprises and other criteria useful in the process of classifying activity are presented here Presentation of the most important barriers to development in generic scheme is also essential and it becomes a suggestion of a model of barriers to development of high-technology SMEs The considerations are completed with summary, multidimensional taxonomy of limitations to developmes fof SMEs, taking into aecount all the above mentioned criteria Chapter four is devoted to the analysis of occurrence of barriers to development in lifeeyele of high: technology SMEs, Types and meanings of phase models of lifecycle of organizations are presented here as well as chosen coneepts, in mors detail [a the last part of the chapter, attempt is made at identification of the most serious harriers

‘occurring in suecessive phases of development of high-technology SMES

Chapter five discusses actions limiting barriers to development of high= technology SMEs It presents genetal assumptions for enterprise support system, characterizes chosen institutions supporting development of SMEs and discusses the :most important external forms of supposting development of high-technology SMES

‘Chapter six initiates the empisieal part of the work It presents the characteristics of the researched enterprises - MakoLab S.A and LTC Sp 2 0.0 Basic data and the subject matter of the activity of companies are presented, their history and development are discussed and basic high-tech products offered by the enterprises are presented

Taking into account the number of the test, possibilities to generalize presented results of the research can be limited However, presented considerations and eenelwsions can be useful for students of economic faculties, managers making decisions concerning development in high-technology enterprises and also for institutions supporting development of SMES

1, THE CHARACTERISTICS OF SMALL AND

MEDIUM-SIZED ENTERPRISES OF ADVANCED TECHNOLOGIES

1.1, The quantitative and qualitative criteria to distinguish small and medium sized enterprises

‘The small and medium sized companies constitute ä dominant part of the participants ofthe contemporary market economy as far as the number i concerned

In the Polish vondiions, the inexease of their importance was connected With the changes of the economy and of the sytem at the end of 20" century which led to the liberalization ofthe economic activites and to the rebirth ofthe private property [As the effect in the years 1989-1993 the phase of “the exph

leading to mote than 2 millions of small and mediven si

Currently the companies of SME sector function in the conditions of the ceonomie integration in the framework of the European Union, the progressing processes of lohalization and the inereased dynamics of the commercial exchanges, The small and medium-sized companies play’ significant economic and Sov fonetions in the market economy To the basic eeonomie effeets of their Functioning one can include the positive simulation of the technological progtess and innovations, the positive impact on the level and structre ofthe employment the stabilization of the masket and the significant influence on certain macro mic Factors such as the level of gross domestic product, the steuctute of export and import and the size ofthe investments The activities of the companies of SME ror ean be also characterized by"

~ relatively smaller ecological threats (the ecological effect,

~ the ereation of decentralized newworks which do not require spesib infrastructure conditions in order function (the effect of regional decentralization),

~ the engagement of tesources, which but for the presence of such compan vould have been at unused (de effect ofthe mobilization of eapitals),

~ the beneficial influence on the economy during the system of tanstion the transformation effec

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entreprencurial attitudes These companies become the creators of the middle class and they help to eliminate the disproportions in the regional development As the effect the small and medium sized companies have a key position in the socio- economic policy of many countries and their development is considered as one of the elements of the economic gruwth and as the illustration of sound market competition’,

‘One of the basie problems which refer to the functioning of the sector of SMEs and to the management of small and medium sized companies is the need 10 define lunambiguously the category of these companies and to separate them from different participants of the economy exchange, In order to do so, different quantitative andor qualitative criteria are used which constitute the basis 10 categorize the subjects according tothe size Some of these characteristics are presented in Table Ì

Table 1 Quantitative and/or qualitative eviteria to distinguish small

and medium sized companies

‘Quantitative eer Qualitative eter

ae hes Soe sruture ofthe company waked By

= Sze of turnoverincome the personality of ie owner,

= alue of asets and Hisbilties of the) — financial independence ofthe company company, = special character ofthe finance economy of

= vals ofthe durable resources, ——

= number of liens = lack ofthe ascess to the sources of

"` financing oflered bythe capital marke,

= Sze of production andor services independence a the decisions,

= shag ofthe ste market, any of propeay and management

= ange of atistics, ~simplitedozpanizational structures

amount of copital involved, = ndivet business conte,

Paticipation of extemal eat, "` motsating

— sve of the paniciation of ciferent| Sl

computes coptal independence, ~exbiity oF sting

= Sze of the materials flows = imovatons and eesti

level of he financial foc, = operating on aoe sete,

= wide range of responsibilities of the

‘angers sa

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The unambiguous separation of the category of small and medium sized companies by means of a certain combination of the criteria is feasible from the hnical and substantial poiat of view In the economy and law practice there are a lot of definitions which are used for different aims (eg tax reasons, connected with the public aid, politcal or even market- connected with the offer for SME sector)

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In the Polish conditions the definition which is based on the qualitative properties included in the act on the freedom of economy activities has the leading role According t0 the provisions of the articles 104, 105 and 106 of the above

‘mentioned act, the three categories of entrepreneurs included in the seetor of SMEs are ilefined as: microenterprencurs, stall and medium size entrepreneurs” This characteristics is in Tine with the acquis communataire and is based on the way oF eaxoning whieh was adapted in it and in the art 10, par 1, as far as the applications of public ad) are conceried, it directly refers to the provisions ofthe acquis

‘Currently dh basic definition ofthe small and medium sized companies derive from the provisions of the acquis and is based on the provisions presented in annex ne Ito the Regulation of the European Commission (EC) ne 364/2004 from 25" February 200 amending the Regulation nr 70 from 12 January 2001 The basic elements of the provisions are presented in Table 2

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ependent companies, partner companies and bind companies This eategory is mportant point of the sbove mentioned characteristic is the separation of based on the quantitative assessment of the capital and property binds of the company In order to define the company's belonging & the sector of SMEs the suitable data connected with the level of employment and the financial size of the Uependent companies need 10 be taken into consideration In ease of partner companies and bound as o the level of employment and the financial data of a given company, one must add t0 its own data the percentage of people employed and the financial data of the capital partners This percentage reflects the possessed proportional share in capital or in votes (depending which one is bigger)

As the effect the companies with tiny scope of activities and which are in

‘complex propery relations are excluded from the category of SMES, I is possible 10 asard the public help only to the companies which do not have a resource base in the form of capital partners

antined or xed by uh investors a

~ public investment corporations, capital joint stock company with high risk inividuals or geowps of people who regulaely run investment activities with high risks, who invest their own capital into the companies whieh ate not preseat on the market (business angels), on condition thatthe whole sum of investment of these investors into business angels doesnot exceed 1 250 000 ewes,

~ universities or non-profit esearch centers,

~ institutional investors together with regional development Fund

local governments whose the budgets do not exesed 10

the numberof inhabitants elow $ 000"

‘This approach saems lo be especially beneficial for the highly innovative companies, whieh use the advanced technologies, use dhe capital and substantial Support of numerous institutions from the bu ronment, including the investment institutions with high risk (Venture capital Thanks to i, these companies entering capital relations donot have to lose the status of the company from the SME sector an! ean try to ohiain public aid from different sources

The different approaches to the categorization ofthe companies according 1 the criteria of size leat the usage of new definitions depending on the sim of their usage For the needs of the public st the only deterininant is the size of employment, Generally the following categories are introduced: companies with O-

9, 1049, A0240, 250.999 and over 1000 employed, widout taking iw consideration the income eriteria, the balanee sum or the capital independence of the compm

‘The nolion of the company functioning in a smaller range is also present inthe provisions of the x or halance lav The example here can be the definition of a small axpayer a8 stated in the acto tax on goods and services" The accountane aet also foresees the possiblity to prepare idancial reports ina simplified forms by smaller units distinguished on the fulfillment of two from three quantitative eriter

‘which refer 1 the employe, the um of the balance of asets and the net income from the sale of products, goods andthe financial operations

Next to formalized classifications intrduced in the frameworks of lay regulations @ lot of authors and rescarchers ase their own systematic of the companies of SME seco adjusted to the aim, range and specificity of research,

‘The example can be the elasification proposed by L Berlilski who distinguishes the companies whieh are very small, average, and the above average ones" or the systematics of the staGonary phone operators examined by R Kozlowski in which the division is made into the companies which ave very smal small medium and

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big taking into consideration the employment criteria", The big companies present fon the market use their own criteria to distinguish the companies from SME sector

in order to present the offer aimed! at a special target group Such activities result on

‘one side from the perception of the big companies of the specific needs of small and

‘medium sized companies but on the other hand show the interest of the financial potential ofthe smaller financial companies”

‘The discussions on the varisty of defi

ions of small and medium sized compares show that the SME secioe seems 1o be heterogeneous, difficult to det whose character is determined by the methodology of the systematization P ominiak pays attention tthe fact that the sector of SMEs is highly differentiated internally, which makes it difficult to do the scientific comparisons as well as the generalization of certain tendencies observed in a certain group of companies"

In the group of small and medium sized companies there are companies with different sizes, which influence their qualitaive characteristic The important differences are also as far as the sectors and branches of operations are concemed, the technical solutions used and in different properties which cause significant differences among small and medium sized companies

‘The aims accepted hy the companies of SME sector, the possibilities of development and the contaets with the envionment are also impostant Factors that Uifferentiate the companies This division is often connected with the person of the enrepreneuf and it releets their personal Featutes which exert the influence on the personalization of the management in these companies!

‘They are defined as developing, producing and selling goods and services which

‘ako into consideration the output of the contemporary seience and technique, Being the companies highly innovative and entrepreneurial they do the conversion of the

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“The notion of technology, advanced (high) technology and the company of the advanced fechaology is not presented in the literature in the unambiguous way Different authors try #0 define these notions taking into consideration differen! The notion of technology can be defined as the physical combined with dhe imelleetual or knowledge processes by which materials in some form are transformed into outputs used by another organization or subsystem within the same organization” This definition includes the components of skill, equipment and Knowledge mentioned by most scholars of technology However, it is ho mentioned explicitly that this is also made of raw materials and a transformation process, Its also important to mention in this definition that outputs might he used

‘within the same organization, Finally, this definition is noteworthy because of its emphasis on processes rather than on static knowledge, skills and equipment, By equating technology with the process, the authors take into consideration the importance of changes overtime and sequence" According 1 a different definition hnology “refers o a body of knowledge about the means by whieh we work on the world, our arts and our methods" Essentially, itis knowledge about the cause and effeet relations af our actions Technology & knowledge that ean he studied codified and taught 10 others

In the literature one alls for the rejection of the classical approach to technologies or at least the modification of it a far as highly advanced technologies are concerned (IIT), The notion “advanced technology” is used to characterize different aspects of the new technologies such as computers and informatics, rieroeleeteonics, eleinformaties, optic fibers, satelite communication, laser, automatics oF roboties This notion ean refer both to the products ineluding these technologies and tthe processes which enable the production of modern products and serviees In this way one can define the branches in which the technology changes very quickly and refer 10 high qualifications requited from the staff

M, Zeleny states that highly advanced technology changes the nature of the

‘asks and their efficiency, the links between them and the nature of the physical flows energy information and its usage results in the need 0 modify the organization, introduce new tasks, new styles of management, new cultures, which means the implementation of the new ways to run the business”

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As the effect this kind of technology does not require the management of the efficiency of work understood as the desire to improve the produetivity but it transfers the managers into the so called catalyst oF changes, whose aim is 1 activate and support the introduced improvements and self management which is based on the dispersed hierarchy and the usage of the organizational and managerial stalls

K, Weick states that the new 6

aking into account thive kinds of event

= stochastic, which means that the processes take place in an unpredictable way

as the results of interactions with gigantic number of factors As the result itis

such technologies, and they can lead to incomprehensive and repeatable breakdowns which happen at random,

— permanent, which means that human lahor is transferred 1 machines The new technologies do run parallel in the users’ minds and in the real workd and the coordination among them happens not pe totime Itean result in sumerous unpredictable interactions and inexplicable consequences,

— abstract, which means that the human labour is 10 great extent switched (0

‘machines, Nevs technologies do not run simultaneously in the users’ minds and

n the real world and the coordination etween them does not happen permanently but periodically which can lead 1 the existance of numerous unpredictable interactions and inexplicable consequences

The broad understanding of the categories of high technologies lead 10 the Lifficlties in defining clearly the companies which are technologically advanced In the literature one can observe different categories of such companies which lake into consideration eg

= the specific local requitements and the infrastructure of the companies which operate in the seeor of advanced technologies The example can be the research

of J F, Williams" and A, Hening, J Son and C, Daw”, in whieh the authors concentrated on the analysis of the differences between the companies of advanced technologies in comparison to the whole industrial immovables,

the division into the companies whieh are technologically advanced and the companies which operate in the field of leading technologies J Debenharn, A Tewson and S Chinnocks” include in the first group the companies which concentrate the

achievements to create the unique market offer The companies which operate in the field ofthe leading technologies, are the companies which break the existing technological barriers in the field of research and testing new products and the processes also inthe pre produetion phase

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* Weick KE, Techasogy as Equivague: Sensemaking in New Technologies, (in) Goodman PS Sproll LS (eis) Teehology and Oreaiations, Josey Bas, San Francisco 1030, 9.1

se: Willans 1 \ Revie of Selene Paks a High Techy Deselopments, Dever Zo, ton |

ee: Hern

be Debora J, Tenson Ax Chinnochs S» High Tech Myths and Resites — A

Developments for Knowledge Bascd Inds, norton Services Deparment, Lond 1983

A Son Daw € Proposny aad Tsshndlogy ~ The Neos of Mader Industy, USD,

Brook's” in whieh four eategoriss of activities were distinguished: the rescarch and development in the eld of high technologies, the production of teclmologically advanced systems and equipments and the activities comnected

‘wth the implementation and usage ofthe high techno

~ the defined charactersties and the measuring instruments connected with the jold of activity according 10 a given classification, the expenditure on the sphere of R & D or the sizeof the qualified specialists or engineors

As the effet of these various attitudes, there is no unambiguous approach to the classification of the companies of advanced technologies Poland, following the examples of the differnt counties, while ineliding the branches to the HT industries use the methodology of OECD Ia this approach three methods oF the classification of the companies of advaneed technologies are use: the domain

‘method, the product method and the horizontal method As the high technologies are alo defined there are the branches or the products which in comparison w different Companies and products have a higher shares in the sesearch and development (R&D) in the final value ‘The indiator ofthe intensity of expenditure on R&D is estimated both in the reference fo the whole branches o¢ (hệ fields of industry (the domain approach sectoral approach), and to the certain products or the groups of prxducts (the product approach)" In the domain approach four types of industries are distinguished: of high tectnique, of middle-high technique, middle-low technique and low technique, The indusres in whieh the expenditure on esearch and development are within the fimits

Of $15 4 of income ate included in HT group The elassification of the branches of indus included in the group of high technologies represented in Table

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In the product approach one determines the technological intensity of the certain groups of products and not the whole branches or concrete companies According to this approach one can include in the products of high wel : the following categories:

— the means of ear transport (exeludi

~ the pharmaceutical products,

the products of elseoaie and teletechnical industry (excluding telecommunieation),

= Tse,

— telecommunication devices,

"`

— tools, instruments, medical and veterinary apparatus,

= means of ait transport,

sizational and technological devises of office activities,

~ measurement apparatus and laboratory devises,

— instruments and optic goods and the ones which are of optic and mechanical ype,

railers and semitrailers),

robots and industrial manipulators,

optic fibre cables

‘The domain and product definitions are based on the qualitative approach which

is the level of expenditure for the research and development activities in comparison to the value of the production sold As the effect of their usage the enumerative lids of industries or products regarded as highly technological are

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created The new approach to the following problem is the adoption of the so ealled horizontal definition

‘This approach based on the h

technologies perceived from the perspective of science, The example here ean be biotechnology which is characterized from one side by the high share of expenditure for R&ED and whose comme: of industrial and service sectors from the traditional food industry 10 teehnologteally advanced production of the drugs The information technol ication technologies, space technologies or the materials engineering arv included in the sector of high technologies according to the horizontal classification”

‘The evaluation of the services from the point of view of the technological advancement can be the supplement for the above mentioned characteristics The serviees constitute the biggest part of the ational income in the developed countries, In the European Union the evaluation of the countries as far as the innovations are concerted include the factors which refer 1 highly technological services (e4 the level of employn

services are considered as high-tech: communications and telecommunic

software and informatics, research and development services, As the effect the classification of the services bused on the knowlede

classification of EKD were eteated in which three with the highs

ate defined as high-tech services, Pos

can be included in this category”

Analyzing the issue of the domains, products or the enterprises af the HT sphere

‘one should pay attention to the influence of the time factor to define the notion of the advanced technologies The example ean be here the textile industry which in the 19" century was an important carrier of the technological progress but nowadays, represcats a Jow degree of the technological advancement” As the effect, the sector

of advanced technologies is characterized by dynamic and changing characteristics lis specificity in comparison with the traditional industries resulls from the Fact that the domains which are techaologically advanced function a the point of contact of science and industry basing on the usage of the results and the outcomes of the Sciemifie research in te economy practice” The companies of advanced technologies are characterized by supra average innovations and the expenditure in the sphere of R&D

tal definition embraces the wide range of

Zing

1.3, The specific conditions of the functioning of small and medium sized technological enterprises

As the result of the above mentioned deliberations, as small” medium company’

of advanced technologies ean be described the company which is innovative, acting within the branches of industry or services which ane considered as highly (echnological, taking at the same time into consideration the qualitative and {quantitative features proper for the companies operating on a smaller scale la the literature different deseriptive characteristics of the small and medium technological companies are presented,

‘The example can be the separation by R Rothwell of the categories of small companies based on the new technologies" They operate in the sectors of advanced technologies and high risk services such as: biotechnology energetic technologies, advanced materials, infermaties and information technologies or electronies They are characterized by the realization of their own research and development activities and also a high level participation of the researchers and engineers employed They are open for coptaets with environment, including higher

‘education institutions, research institutions and different companies” creating e network relations or relations hased on the principles of clustering

‘A, Rizzoni classifies the companies aceording to the innovative behavior, where in the group of the most innovative companies where a sub class of sill companies based on technology and small companies based on new technology is distinguished, The first ones operate in the quick! wf sectors with changing and diverse demand and big technological requirements, where the following Đranehes cạn be treated ay examples: the branch of seientifie research, telecommunications and industrial automatics The small companies based on new technology are in comparison to the previous ones filled with science and they enter into bigger interactions with scientific and research institutions, The following industries can be quoted as the examples here: semi conductors industry, pharmaceutical industry, advanced materials industry and biotechnological industry”

‘As the effect the small and medium companies of advanced technologies are the centerprising companies whose owners concentrate on the development of their

‘undertakings in order to transform them into bigger companies or even corporations

in the future They are perceived as quickly developing companies which are connected with the big or dynamically growing market which enables them to develap quickly These are the companies connected in the majarity of cases with the new market, which requires the company to grow Since the growth seems to he the only possibility to “survive” on this market They are set up by dynamic and enterprising people who prefer risky undertakings Their companies are

‘StavasyE, Inowacje a ma fra, Wyn Uniwersytet Edekiee Le 199, pO

w Soot" Rizzont A Technolog Tanvation and Sell Fes: A Taxon) -ikemitona Small Busnes Jounal, vl 1991

‘Stasane Bs Inna mat op itp 103-104,

characterized by a higger involvement of the capital, they are connected with a high risk and they use more complicated methods of production"

‘The characteristics of small and medium sized technological companies is largely based on the qualitative features of the companies of SME sector putting the emphasize on such features as: high flexibility of activities, ereativty and possibility { use innovations very quickly which can be verified by the market needs, entreprencurship and the market activity The important feature is also the ability «0 enter into different eorporational relations, also with the companies that operate at the edge of science and technique What is more, the competitive advantage of high technology SMEs can be built on using the privileged conditions to obtain financial sousees or promotional technological and educational help from the souses launched especially to support the local economy and the small business

I scems, however, that taking into consideration the specificity of operation on đynamies and developing markets the small and medium sized technological companies should not by characterized by the features typical for the companies of SME sector such as the regionalism of operations, simplified methods of

‘management and the intuition of management During globalization, advancing intervationalization of the economic activities and the progress in the field communication wchaology high-lechnology SMEs cannot limit the range of

‘operation only 4 the local and regional markets, Small and medium sized companies, although they have potentially bigger possibilities t succeed on local imarkets , which hecause of its size is easier 10 penetrate, they should use the innovations and the flexibility of functioning in order 10 extend the market range of operations

If small and medium sized companies of advanced tehnologies want to exist and develop in the turbulent surroundings they need to free the possibilities of creative and flexible activities, in order 0 ereate the conditions to compete for the cuwtomer value They need to become dynamics organizations, agile, intelligent

‘market oriented In ordet lo evaluate towards such characteristics they need t be concentrated on knowledge, intellect and follow the vision They also need © g0 out

of the existing borders, keep on improving their skills and introduce the innovations" While becoming the learning organizations they will be able to extend theie possibilities to eveate their own future”

‘As the effect these companies are perceived as the companies “of the third wave" the young companies, both as regards the age of their creation and the age of the staff, with flat organizational structure, in which the forms of cooperation are dominant the knowledge and the personal skills can be developed and the fre transfer of information among people and the small personnel groups, The strong

‘market competion and tremendous environment make them introduce the innovations without cease, which means that they invest in the development research, tainings, education and personal development of the staff members Theit

20

‘main property constitutes the knowledge of the staf, which diminishes the need for financial eapital and also material resources”

I is possible that their characteristic should evaluate towards the eharacterisies

of the “born global" companies and the International New Ventures, aecording 10 the theory originated by B M Oviatt and P P McDougall, They are often defined

cchnologies and they are searching from the very beginning the sources of competition advantage as far as the

ties are concerned” To the ae

ly in the sectors

4s the companies which operate inthe sector oF the newest

resourees and the scale of sales in the different eo

basic tends that influence the shaping of such companies one can

— the inerease of the pace of the technological changes, espec

which are " knowledge- receptive”,

— more and more mobile structure of the resou

information,

new communication technologies, which ensures the fruitful ma

foreign operations

~ tendencies to ereate international and global networks,

— bigger demand for the highly specific products, the bigger importance of market niche,

High-technology SMEs should also limi the operation on the hase of intuition, basing on the analysis of the market trends, done also in the international seale The

a well as based on the information technologies (e.g class systems ERP),

Totfer A Toe I, Btwn nme esis, Wynne Zyak I, Pozo 1986, 9 S158

* Compare: Oviatt BM, MeDougal PP Towanda Theoo sĩ IHenotoml New Vetexes.'Jauml of Aocrnatioal Busiess Sates” 28/194,

= hupeeyk W.,Prcigiorersueglosine a wer frmy, fn] Lachiewic 8, Zahra els Atel) Teoria | prkigks rareqlania rorwojem oganizaci, Wydwnictxn Polski Esk {oe 2008 59

Xuht GIÁ Cauusgl ST The Bom Global Fira A Challenge to tional Intenstionaletion Theory, «Advances a inersionl Mareling™ 8/1995, pl 1-26,

2 THE NOTION OF THE DEVELOPMENT OF THE ORGANIZATION AND ITS CONDITIONS

2.1, ‘The development of the organization as ongoing process of

changes,

pall and medi

‘The widely understood development of the n sized companies isthe condition for them to participate actively in the market activities and as the resull they stimulate the economic and social development of the country Taking into consideration the specific conditioning of theit functioning these companies are included into the category of innovative, enterprising and growing companies, One

‘can say that thei activites should be oriented on the permanent growth

‘The deveTopment of the company is one of the most complex processes in its functioning In the general approach it is defined as the process of ongoing changes”, Pszez6tkowski pays attention to the faet that during the development certain entitcs join inte more complicated systems, in the entity of “the superior importance”, which is characterized by new properties and new correctness which hhave never heen encountered" Cz Sikorski defines the development of the company as the inerease of the efficieney of functioning as well as Keeping the s0 far efficiency in the changing conditions This development is done thanks to the

es in certain elements of the organizational system aad the forms of the realization of the individual functions of manageme

Although a lot of attention is attached to the development of the organization and to the wide anatysis of this phenomenon, the literature lacks the discussions as

to the essence, the specifies and the conditioning for further changes, Many authors treat the development of the organization as the quantitative phenomena, presenting or completing them with a separate category of growth, representing the changes with qualitative character

® actacaa I Zazatzanievorwoje ogunizac PWN, Waza Krak 198 p14

* Pascisowsti T, HH sazgtlopelia peloeelngi ï tomới omgmiagji Wnhưmlenue Osalneon, Wrectie (97K p32

" Kacrmack By Sikorski Ce, Polauwy zàAtana Zachowamie oranizacyne Absdlvsd, Lái), 058.25,

` Sch nding ofthe cago of developmen ined oul by eg Machaczha 3, Zaeaenic nozsojet ozoizagl gi, P 14, Masgke Msn E, Zarzadranicrvanann w fie, Cent Informagii Mensizera Warsaw 1996 p 34 Stuboya A Zaezgdzaie rozwajn Giny, Akadeta Ekooomicena w Keakswe, Kew 10869 Desconck-Z, Stree eoxwaju fay, Wodswete Nauhowe PWN, Warvavs 1296, p Il, Wasieruk J}, Wewost mlyeh t stench prsthighonsw AspctyleretyerneLDulans empiycrae, Polfehnita Cake, Gas 2S, p11

In the prakseotogy theory the development is understood as the complementa existence of the quantitive changes (the development ofthe organization) together With the qualitative changes” The similar’ notion of the development of organization is defined by J Pene stating that it i the dincet system of qualitative and quantitative changes (structural, technological, cultural ete) showing a permanent tendency, favorable 10 survive, stability and dhe development of & given company" These approaches reflects the economical practices, because he qualitative and the quantitaive changes inthe majority of cases take place simultancously and they complement one another The example ean be the qualitative inerease of the production or the employment, which requires in the

‘majority of cases the implementation of changes inthe organizational spheres or the entering into new markets", Fromt the other side the qualitative changes ean be the base and the impulse to inerease the size ofthe organization, The qualitative ehanges

‘which are too dynamie without the adjustment ofthe system of management and the {qualitative coordination can lead tothe organizational hypereopy

In Table there the examples of qualitative and quantitative changes leading «9 the development ofthe company are show

Table 4 The examples of quafitative anel quantitative changes leading to the

{development ofthe company

‘Qualitative changes ‘Quantitative changes

ihe indicator ofthe company’s growth) (the indicators of quantitative changes inthe

‘company Sie oF rion ime oF he —Twiel of the ohne advancenaat oF

¬ the prods and the level of diversity

= Sizeor profits = evel ofthe complexity ofthe organizational love of cos ‘truce an the forms of management, number the sat member ~ Jovel of vomplexiy wf the desinive problems Sze the added proto svthin the orsanization

2 gam of balance, ~ level of profesionaization ofthe managers,

= Sze oF nial epi, = bis to use te proper strate

= Giowthof the marketshare of given | ~g0cd opinion on the market and in the

company ona glial teginalamdluea] | sbeiety

‘iat oreanizac, Wydawnictwo Narkowe PWN, Warsavca 1995, p 185-186

‘This Table puis the order into the distinetion made by D Hahn between the sowth of the company understood in s narrow and a wide manner As the growth of

‘he company in the narow (strict) meaning one took only the measwrable, (qualitative change in the long period of time, which can be calculated on the basis of

2 Psneolowski 7, Mai caekiopsdis paksolopit, opt p 211

® Pee Lelspkon biznes Ageneja Wydavaiez lacl, Warsaw 197.9381

Lchievice Sods Mae Tiny ơp pc,

the statistical data, The growth of the size of the company in the broad meaning is the whole process of transformation in the longer term, which embrace both the increase of the qualitative value and the quantitative changes ‘The growth in the wide understating is trated by Hahn as the development of the organization" A Similar distinction is quoted by J Rézaiski who enumerates multiple grovth which happens while the qualitative factors are unchangeable and the mutative growth, which is idemtified with the development of the cormpany""

Another important factor of the development of the company’ seems « be the positive evaluation of the changes or the phases of development done fom the poi

of view ofthe set aims In prakseology it was taken for granted that if company in the latter phase is aware a positive evaluation, then the development can be joint

‘with the progress of that organization” A Stabryla also points atthe usefulness of changes stating that the development means the existence of changes which are assessed positively from the point of view of the aim to which they refer" In the theory of management one pays attention to the fact thatthe phases of the process of | development ean also have a regressive character if they are negatively assessed

‘They can also lead 10 stagnation, which isthe phase of development characterized

by the lack of any changes”,

As the effect the phase of development is perceived as a multi dimension process of changes which take place in the organization It seems that one can also talk about it when the qualitative changes take place in the company and they are accompanied by the shrinking of the organization” The example can be the purchase of the modem technology supported by the improvement of production

‘which leads to the increase of efficiency connected with the decrease of employment

in the company In this ease there are hoth the qualitative changes (the inerease of efficieney, the increase of the value and the quantity of the durables) and the

‘qualitative changes (the reorganization of the management production) As these aims are positively assessed from the point of view of the main (strategical) aims of the company, they definitively lead to the development, although certain inconsistencies exist e.g of social character

In the literature the atention is often paid to the lack of stabilization, the lack of harmony and the existence of diversified phases, not always in line with the theoretical models and the lack of planning for changes" is

the definitions of the

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Rézaisti J wonyee rveerawe w proces mewojouyeh preg, Wydwriccwa LUniwerytts bie, Le 1%

" Pucrolowshi Tala encylope prkssolgi op i p 212

5 Shyla ntands unde the asin ot the prog aly the qualia lan

‘artadeante rej Hy so pcp

Bioosewicy Mes), Rov preston, Mode, <eyoci, st

smerny Saczcendepo, Sen 3005p là

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© por Machaceha lZaveeanerorw jem vegans +p 1,

bí làc demlapmeaL 0Ÿ the company Which takes this way of tdci to tons shown in Figue |

Qualitative changes — Positive evasion of

stanges Development of

‘organization

Figure 1 The zeneial model of the development ofthe company’

‘Source: Own preparation

‘The criteria of a positive evaluation of the undergoing changes seems to be a big problem, It's difficult to state unanimously from which (whose) point of view the ves should be assessed as positive, The example can be the development fons taken by the board which is not given acceptance by the executive organs

ff the owners of the company It seems that analyzing the changes which are taking place, one should take into consideration the assessment of the eatetnal clients Including first of all the financial organizations supporting the company in terms of capital, customers and public opinion The positive evaluation made by the extemal institutions is especially important in case of using the aid funds (often of the public aid kind), when it's one of the conditions of awarding sueh help to the company’ Another dimension can be also the evaluation of the development of the company from the point of view of public institutions, including the organs of the public administration In this case one can accept the interest in such factors of development as the size oF the the smaller unemployment)

or the height of income (influencing th tributes),

‘As the effect the development of the company is perceived as the phenomena with a subjective character which can be differently assessed and perceived by the different groups of interested patties The groups of stakeholders interpreting and assessing the development processes of the company’ are shown in Figure 2

"rẽ ẽ

‘Warsaw 1991p 150, Sand W, Lekoykon enedera, Wydawaictno Pofesjoali) Sakoly Biznest Krakow 200, p 817

‘Acta and ature

lanestors(onness) Board Credicors and borrowers

Compotiors Lasi auBoride

‘The development of the

comopany Po) satrmembers

liens ||

— Cental institutions and he

eeaury ofthe county

Figure 2, The chosen groups ofthe stakeholders influencing an assessing the

‘development processes af the company There are also the problems with the choice of eriteria and the factors of evaluation since not all the factors seem to be equally important form the point of view fof the evaluation of development K Bolesta-Kukulka enumerates as the most trustworthy the factors whieh refer to the market position and the financial position

of the company The companies which systematically improve both of dhese Factors can be considered as developing in the proper way and assuring them good basis for the survival in the future" 1 Kortan pays attention to dhe fact that the size of the turnover is a very uscful Factor as it enables to calculate a percentage share of a company in a given market and its comparison in the following periods allows to check whether a given company develops quicker than the competitors” Analyzing the issues of the growth and the development of the company in the literature itis often underlined that the usage of one ofthe measurers is not sufficient inthis case and does not give proper interpretation of results, That is why it is always advisable 0 combine a few factors to measure the development of the company

‘The organization can choose different ways (directions) of development One can differentiate as the components of this process the internal growth (endogenic) and the external provth (egsogenic)™ and the simultaneous external and internal fone The first means the growil of the company’ from inside, mainly by means of leW materials investments (new machines, tools, new objects) and the

‘organizational initiatives (new osganizational cells, plants, branches) The extemal growth means the joining (fusions), entering the co operational celations with

‘different companies o¢ the ercation of the forms of concentration (holdings)

oles Kua K, How to lok opt p16

* Kortan (es) Podstamystonomii aceon, opt pt

“hide, p84

‘The extemal growth is considered to be a quicker and less expensive form of the evelopment of the company, itis connected with obtaining the rights 19 use the already existing talents andl potentials This solution does nor create the market of new production capacities, dacs not increase the market of demand and does not ereate new posts On the other hand the direction of the internal grovvth is considered to be less risky then the external development since it is easier lo foresee the fesulls of operation

jn the sector and it is easier to synchronize the new branch with the ones already

iy The simultaneous extersal and intemal growth

1 fest ofthe resttucrization of the company”

realized as

2.2, ‘The factors of the development of small and medium sized

enterprises of advanced technologies

Apart from the problematic of defining the development and ils qualitative and

‘quantitative measures, in the literature a lot of space is reserved! also to the factors

of the development They can be defined as the elements whieh influence ina given way the development processes in the sation Analyzing the specific features

Of the small and medium sized companies of advanced technologies it is vital wo remember that itis very delicate group of companies which is easly influenced by different conditions of growth, It is visible in the big changeability of the

‘development of this sector and the lack of stable qualitative changes" That is why

in the literature different sets of determiners which influence the development of the

‘mall and medium sized companies are presented and which in ease ofthe beneficial influence Fulfil the role of the stimblators of growth, in some ease can limit oF make difficult the funesioning of the factories from SME sector, becoming the barriers for them anul making their activities difficult,

‘That is why two groups of the developin,

opposite character: the stimulators and the barriers of growth To the st

ean include all the processes or the activities which facfitate the development of the company The barriers (obstacles, inhibitors) can be defined as the factors, the processes oF the ae ‘of the company and the realization of aims impossible Among the factors of the development of small and

‘medium sized companies one enumerates two general groups of elements: intemal determinants, connected with the owner and the potential ofthe organization and the external determinants resulting from the environment of the company,

In the group of different determinants the stimulators of growth can be defined

as the positive factors, where the negative determinants of change ean be treated as lobstacles, Some of these factors, referring especially to small and medium sized companies ofthe advanced technologies are shown in Table S

` vẽ

` ẽ

‘arse 2008p 37

PP Aadgejegal TC Laeliebiez S Zaajbowska HL Dynumik cou sektoc als sSeedich fine

‘enjewtrtwie faim oY ach 1984 — JEỢP, vZsvjy Nhhoee PoheetmAi 1.4đ/Meƒ" m

98 Ea 18, 963,

Table 5 Some ofthe external anal internal factors ofthe development of smal al

medium sized companies ofthe sector of advanced technologies,

Thteroal factors ofthe devel

ot ITSMES Tien 3 ofthe development

APNTSME+

‘Connected withthe owner enterprising features, such as engagement,

Setemninaion and persistence stg need

of achievements, inatve and

responsibly orientation on accasions,

looking for feedback internal placement of

conto aking eaeulated es tolerating

tiaeraty, honesty and resto

silty to accep the fares, eesti and

novation, having vision ofthe

company, sel contac ad optimism,

the need of autonomy sndopendence,

stig to build tet,

~ Socioloically determined: ape sex faily

snd environment tations, period of

shildhood, kind and course of eduction

Connected withthe company

=" Competencies hl the abies of salt

= knowledge of the character ofthe market

‘on which the company operas

~ high ality of the prouctssrices

|= the height oF payments for Social surance Institution,

he conditions ofthe sess to the external Thông

solutions connected with patent a and rection of illest obeny evel ofthe market competition,

= processes of shaping ofthe deta and supp

conditions ofthe government's policy toward snl and moun sized companies, socio-political eltore ofthe

etepreneaship: the approach a whieh the enrepreneus samtarded, iis

‘onsiered asthe factor whieh is capable of

‘hanging the cular of a given tine fealzing the fact that te society derives the advantages from the development of the entrepreneurship but ako the

high level a protiabity of ses

e018 U enepreneuship form de so bother extemal factor

Soarse: Own preparation on the basis of Shivw 3, Ssane wiv) male Sra

preeduibinrioe, -Wenagrodcenta”, dodatek misigcon nr 1 012000, p Matejun M, Rota hourcingw careste ractunkonoics donaderva padatkowego w roswojt aac (edn [przedsibiors, the doctoral these, Katedra Zurswlamia PalUechnia Eilo 3006, p.37

In case of the beneficial influence on the development of the company the factors enumerated in Table § will he defined asthe stimulators of the growth (e the high knowledge and experience of the owner, proper cooperation relations of the company, simplified access to the external Financing) However, if these factors make difficult or slow down the development processes they will be included into the barriers of the development (e.g the lack of engagement and the determination fof the owner, insufficient amount of the initial capital, big taxes) One must pay attention tothe fact that in the theoretical models the clear division into the postive and negative factors ean be difficult, Certain factors ean for some of the companies

be the opportunities for development and for others ean be an important harrier for

28

the development being the inibitors of growth The example can be the existence of changeable and complicated rules of law which for many offices can be an obstae for the development limiting the flexibility of activities and causing the engugement fof the resources to monitor the law environment and the supplies activites On the other hand the same law conditions can be an important stimulator for the development of the service companies such as the law offices, accounting offices and notary's offices, causing a bigger interest in the professional law services,

Similarly, the impact of the wchnical progress on the development of the companies can also be teated as ambiguous, For many companies of SME sector {quick technical and technological changes can be perceived as an important bartier fof the development, connected with the necessity to adjust to the dynamic of progress On the other hand, small and medium sized companies of advanced technologies can perceive big possibilities in them generating demand for their products and services, It scems that considering the factors of development as barriers oF simulators also has t some extent a subjective character, which depends on the specifies of a given company

2.3 ‘The usage of the factors of development to limit the

development gap of the enterprise

J, Machacrka pays attention to the faet that the process of development of the

‘company can be interpreted as the elimination of the so called development gap of

as the improvement of the place which the company has in the enviroament™ He takes for granted following the ideas of 1, Ackoff that the strategical behavior of the

‘organization in the general approach is defined by ereating forees, the so called potential of activities and the potential of influence and their difference leads w the creation of the so called development gap, whieh can be explained by means of the following formula (1):

‘The notion of the development gap can also be understood as the difference between the possibilities possessed hy the company (the potential) and the real achievements!” In this context one can differentiate its wo basic kinds: the

‘operational gap and the strategical gap" The appeurance of the operational gap

Machacrha J, Zavadvanie wozwoyem orptizag 0p GL pM

idem p18)

” Knilelaum I1, Strtgicze planoaniew prsilgborsiwie, PW, Warsawa 1996 51

results fest of all from the insufficient usage by the company of its resources It ts advisable to dispose of it hy such activities as: the harmonization, the rationalization, the intensification of activities

The strategical gap is connected with the broader notion of the limits of the {development of the company These limits are from one side limited, from the other side they ae constantly expanded eg due to the scientific and technological progress oF the discoveries of new possibilities In this ease the elimination means

{he innovative and ereative actions which entilles novelties and uniqueness Since the elimination of the operational gap enables to succeed and to achieve profitability

Jn the short term, whereas the usage of the results in the long term aspect requires the actions in the field of the strategical gap its eliminauon can be associated with the development of the company In the economic activity the sepatation of the

‘operational activities from the strategie ones ean cause certain problems,

The development gap exists when the company, regardless of its

organization, is always below its optimal efficiency of operation

ceansequence, the elimination of the development gap ean consist of

= searching and eliminating all the harrets for the development provesse

~ identification and the usage of all kinds of the stimufators of the development of the company

‘The influence of the actions to eliminative the barriers and the usage of the stimulators of development ofthe development gap of the organization are shown in Figure 3

3 The elimination and the wsage ofthe stimulators ofthe development in the

process ofthe elimination of the development gap inthe organization

Source: Own preparation onthe bass of Machwestu 3, Zarayd-anierozwojem organiza

30

1 seems then that the development of the company can be modeled by using different stimulators and the restriction and getting rid of the harriers, which appear during this process,

‘The development is one of the most desirable situations in the con

business The allention is often deavn to the Fact that Uke Final aim of the con which gathers profs is the maximalization of the long term profit and the evelopment of the company Both ditections of actions have a complementary character, Although the development of the company depends on many factors, in the companies the profit often constitutes the basic source of the financing of the develope

‘On the other hand the development is one of the conditions to achieve the prof

by the company”, The attention shoold be paid co the fact thatthe growth of the size

ff the company does not always lead t0 the proper increase of the value of the company and that it can become a factor which makes it difficult in the long run e

to resale the activity It happens so due to the Fact thatthe level of risk and the scale

ff resourves that the new owner will have 10 engage in the introduction of the necessary changes and the investment processes is mach higher”

Analyzing the conditions of the development of the small companies, especially

in the financial aspeet one can differentiate wo groups To the Fist group one ean include the companies which are self limited because of the character and the aim of the functioning e.g the traditional crafts, small carriers, local services, The feature

of this group is the existential connection of the owner and the company From the point of view of the investment these companies require a certain Jevel of spending

to achieve the planned aims

‘The feature of the second group is the expansiveness_althowgh in the first stage itis difficult tell them apart from the companies of the first group Their increase

is connected with the development of the process and product and the

surship of the owner decides who takes the risks of decisions and who expects a certain compensation from that

‘The small companies of advanced technologies can be surely included in the second group of the companies That is why in the process of their development the identification, analysis and the proper reactions for the stimuli and barriers that arise 4s really vital In the latter part of this book the author concentrated on the divagations on the barriers for the development of the small and medium sized companies of advanced technologies

The author did an attempt 1 prepare a multi dimensional systematies together swith the analysis which of the inhibitors are especially detriment in the phases of the life eyele of the companies fram SME sector

‘Daj Padsuny ckononiki prastghirstwa, PWE, Warszawa 2000, 586

* Subleiaki AT Czy kono} enepeyl sie zsh yw, Nowe Z3cie Gospadarre! 200) m6,

* SNlovaU 5, Sk! prrodsisbies,.Ekooomika | OreaizaiaPrsdsghionstws" 5996, p

3 TAXONOMY OF BARRIERS TO DEVELOPMENT

OF HIGH-TECHNOLOGY SMES

3.1 The division of barriers with regard to the time they have

occurred in the course of functioning of enterprises

High-technology SMEs encounter various bartiers in the process of their development On the one hand, barriers to development of enterprises are usually the result of market competition, which consists in realizing olten contradictory aims of

‘competitors, On the ether hand, they are a consequence of imperfect political, legal social or economic systems, Mistakes made by an enterpreneur during development process or a company restrictions (resource, process and other) are also their essential sources The bartiets contribute to limited freedom of activity, hinder developa processes and ultimately, they can lead to 8 crisis and fall of a company However, they force economic entities 10 take enterprise and innovative actions, lead 10

‘improvement in the quality of products and services and prompt the company to take corrective and developmental actions Ia positive metning, they can stimulate larger development efforts of enterprises

The problem of barriers to development of SMEs has been the subject of many research projeets conducted by scientific centers and institstions related to the SM

‘cetor in recent years In literature, there are not any expanded typologies of harriers 10 evelopment of enterprises, though, which makes analysis of these occurences difficult and causes interpretation difficulties The taxonomy aims at intoducing theoretical onler andl enabling analyses and comparisons within vertical research Distinguishing barriers 40 development of SMEs from barriers lo devlopment characteristic 10 high-tech (MES is also vital AS the latter ones constitute a subgroup of the SME sector, some of the barriers will certaialy be similar in the case

ff bot categories of enterprises On the other hand, in the case of HITSMEs, certain factors can occur more frequently and can influence their development differently than

in the ease of the whole SME sector Baniers characteristic to technology-based SMEs seem to be felated most of all to technology transfer, innovativeness, initiative and creativity of action, particular legal conditions ineluding those related © patent law), challenges being the result of intemalization of aetivity or access to information Therefore, harriers to development of high-technology SMEs can be treated as a subgroup of barriers w development of those SMEs which are characterized by Slightly different quality features and which influence the functioning and development of enterprises ina different way

‘One of the most basic eriteria for distinguishing baniers to functioning of SMEs (including high-technology SMEs) is classification with regard to the time they

hhave occurred in the course of functioning of enterprises According to this division, barriers to entry, barriers related fo current activitiy, development barriers and harriers t0 exit can be distinguished Factors which influence a company déynamies in a different time and way, e.g, at the heginning of business activity when a company moves from one phase oF development to another or atthe end oF activity, are the basis for their recognition”

Barriers to entry appear at the start of the company activity and are related mostly 0 problems connected with the company existance in the market They include

~ vague regulations conceming taking up business activity,

— administrative bartiers, including corruption and incompetence of public officials, ner slump in a branch or a given avark

~ difficulty in access to technologies and limitations related to patent laws

Competitive barriers, ereated deliberately by market participants in order to discourage new competitors, are also a significant group of barriers to enuy, By developing and strengthening competitive advantage, entities already existing in the

‘market hinder or even block the possibility of entering the market by new enterprises

Development barriers and harriers related to current funetioning concer enterprises which has already existed in the market, They are distinguished as a result of isolation of operational, tactic and strategie activities, AS a company development is a long-term process and is connected with strategic changes, hidnrances impeding stealegiec processes can be defined as development barriers On the other hand, factors hindering short-term activity should be included in the group

of barriers related to current functioning, The examples of both types of bartiers in the functioning of technology-based SMEs have boen presented in Table 6

= illness OF Rey worker, = fails of machine or device, —_ hạn att Ractaton, ~ hindrances in teemoogy ans

delay in sply caused bythe supplier, | — high market competition,

= contol by revenue office hiện fiscal charges

compare Gari G, New Firm Poona and Lovsl Deselopment the Halian Expsiene, Pavia

or flee] Sawa F (eis) Mrcewanie foes) malyeh 1 Sedich pracksghiost, Seiale Publi Group, Cask 2001 2

‘Warhowiak P (eds), Funkeonowanie preshghiorsiva w gospedace nnkoxdj, Slomargereie Ksiggomph wPotse, Wars 2006 963,

‘As unequivocal interpretation of influenece of the changes on time-related functioning of enterprises is difficul, differentiation between development bartiers and barriers in current functioning, though itis theoretically justified, is less important practically and is disregarded by some authors

Barriers to exit are related to a company leaving the market They concem mostly costs of all types, related to closing market activity Basically, they ean be funther divided into barrier related 10 finishing certain venture (eg investment) leaving a branch or a particular type of business activity or a particule market oF

ly, barriers connected with finishing activity

In literature, barriers to development of enterprises are often distinguished with

vetion in which they oecur It leads to distinguishing, fexternal and internal bariers External burriers result from an enterprise environment and are mostly related to its low potential, high complexity and uncertainty of business environment, Intmal barriers ate identified as faults of an enterprise ise” Referting

to terminology applied in strategic analysis, extemal barriers can be identified with deals «9 an enterprise, wheteas intemal obstacles occur when weak points of an economic enlity are identified Internal barriers include bartiers connected with an enterpreneur or shortages in the scope of resources and processes existing within a company,

‘As the criterion of direction of existance of barriers is substantially justified by the concept of a company environment, a suberiterion can he applied in relation to

‘external harriers, dividing them further into general ones (resulting from conditions of general environment, remote toa company) and compe temal barriers (justified

by changes and actions taken within a company direct environment) Uncertain politcal situation oF the county is an example of external barter wheteas strong

‘market competition ina given area is the example of external competitive barier

‘The criterion of level of barriers is a supplement of the criterion of the place of their occurring The three levels of influence of environment on the functioning of SMEs (macro, mezo and mieto level) are the starting point for this taxonomy."” The

‘macro level comprises macroeconomic environment, Depending on the aim of analyses, it ean be considered on international (global) level, including the European Union level, or in local dimension The consequences of global warming and climate changes are examples of enterprises’ activities on a global level, Complex regulations

fr unfavourable customs sulutions ean be included in hariers on international level The concept created by L.C, Leonidou and 8.7, Cavusgil has proven vital for dhe analysis of barriers to development, taking into aecount the level eritevion and the

seep lanat F (elo, Prodswanied ro) malych op eit, 61-62

Matejun M., Wows Barry azn tr ska MSP, in] LacbowiceS,(), Zareqanic sgamojem osgniac om I, WydvuietoPoechaiks Lic Lode 2007 122123

"Compare: Dominak Wasilek 1 Dashicwice N (edn) Male + Sedic pyiclagBiuetsa vi 8l itemecjmeliajl Megoj gopelvek sumgpcplic, Seietiie Putin Crop, Cask s,s,

M

Airwction criterion They have isolated four types of bartiers of intemalizing activities

‘of SMEs: intemal national harriers, antomal foreign bares, extemal national hares aan extemal foreign barriers

Internal national barriers are obstacles resuking from the inside of a company and they refer w national environment They include:

~ lack of staf dealing with export marketing or or

~ negative perception of isk related wo selling

— managers aiming at developing activities in national markets, panieularly in thẻ

«ase of high potential ofthese marke

Internal forcign barriers are hindrances resulting mest from limited marksting possblites of SMEs, which is noted in tract foreign markets, iffieulis in Contacts with foreign clients or high costs of wansport are problems External national hariers result from national environment of SMEs but they are controlled by an enterprise, eg coniplex documentation related 10 international ansactions Insufficient goverment support necessary for overcoming intemalization baits is also pointed at The last group extemal foreign hairs are hindrances resuling from the outside of a company and are noticed in intemational markets, ep aif 6 non

‘anf imitations

Analyzing further bariers to development of SMES aocording to the exterion of their evel, conditionings inside the sector (ez within the SME sector or high technology SMEs) a well as the ones relate w branch (eg, treats existing within IP tyanch) should be taken into consideration in mezo level Factors appearing in partial

‘marks (regional and lal ones) ae also essential Lack f homogencous government policy towards a particular branch of weak representation of economic goverment are some examples On the odie hand, dhe mivso level includes te inside ofan enterprise Barriers appearing on this level ean be, dheseone idem with internal ater to development

Division of banors to development fiom the point of view of the size of enterprises is a development and panicularzaion of sysematizing barcers of SMES according to the level etterion In this ease, types of entities eassitied according to their size, which face certain bamiers, are point of reference, Therefore, we ean distinguish bartiers to development specific ro micro enterprises, small and medium sized enterprises and, finally, large economic entities”

In the ease ofthe smallest enterprises, esource shortages, concerning &g 100 low fonds or limited number of workers, ean he the biggest problems Complex regulations

cr anisrative bariers are also abstacles, On the other hand, large companies can face problems being the couseyuence of distuption in information flow of the company or maladjustment of organizational structure to an enterprise strategy The largest emttes can stuggle with excessive umber of employees of insuffi Aexbiity of action,

“The next division of barriers to development of SMES isthe criterion of barrier activity Within this typology, active and passive hindrances can be singled out The former are the result of actions taken by other entities and institutions, directed or aimed direelly aan enterprise, which Faces particular barriers to development in the aftermath, Aetive barriers are also some unfavourable factors being the reaction of certain enterprises, units oF Social groups lo actions of an ently Beating this in mind, active barriers include e.g certain actions taken by competitive companies in order 1 srengthen theie positions in the market and limiting possobiliies for development of

‘other entities atthe same time The baiets ean be also the result of failure in meeting

‘deadlines of supply oF low: quality of realized orders by suppliers In internal context active barriers can include strikes or other deliberate unfavourable actions taken by the staff of an enterprise and limiting possibilities for development Complex regulations

lr restrictive fiscal requirements are also a kind of barriers as non-fulfilment of duties

‘within them can result in particular financial sanctions,

‘On the other hand, passive barriers concern certain occurrences enterprises come ross in the course oftheir functioning and development, which are not connected with

1 relailatory aetions These barriers ean elange their properties inthe course of time: but Tack of immediate reaction «0 actions of a particular economic entity is ils characteristic featute Therefore, they ate passive towards actions taken by an enterprise, They include unstable political sigsation in the country, bad weather witions, decteasing purchasing power of the soeiely or worsening economic situation in the market

In analyses of barriers from the point of view of their appearance, natural barriers, which are not the consequence of human activity and artical ones, which are the result of obstructing, emerge, Natural bariers include various types of hindrances connected with lay of the land, geographical position or climatic conditionings and changes, Artificial barriers are created by ether participants of market game, social groups or units In broad context, they are the result of functioning of economic or legal systems

‘The analysis of bariers according 10 the efficiency criterion is the next way of viding them In this ease, they include barriers that an enterprise can overconte or the

‘ones that cannot be surmounted The former group comprises vatious kinds of hindrances related to the activity of market competitors, low workers” qualifications or ficult ling agents and distibutors for their product

The group of barriers unable t surmount is disputable An enterprise should aim

at development based on strong points and market chances, In this aspect, an

‘economic entity should use enterprise, flexibility and innovativeness in onder to take advantage of asising opportunities, reducing the influence of negative factors at the same time As a result, managers in enterprises should possess knowledge, experience and ideas set on levelling bariers to development and determining directions of actions based on positive development stimuli

However, this approach can be dificult in the ease of SMES Firstly, attention is often paid intuitiveness and lack of proffessional waining of managers, which can affect hardships in taking creative and efficient actions Secondly, due to limited

‘company resources, SMEs are less abe to actin alternative way

36

seems, therefore, that part of barriers of SMEs, incuding high-technology

can be perecived by managers and owners as impossible 10 surmount They include

1 health deterioration of the owner, complex regulations and! instability of law system or insufficiency of administration of justice, It seems, though, that seeing barriers as able or unable to be surmounted isin most eases subjective, dependent on competencies of managers as well as on the possibility 10 use chances and strong points of an economic entity

Analyzing batters according to the efficiency criterion can be particularly essential from the point of view of a company development and, above all it ean be justtied in the context of motivation I is emphasized that the existance of barriers {impossible surmount can evoke frustration", lower motivation to act and ean lead very quickly to organization erisis in the aftermath,

Bartiers to development of an organization can be also analyzed from the point of view of their durability, According to this criterion, long-term barriers (relatively permanent) and short-term ones (temporary) can be distinguished Long

include hindrances resulting from too high tax Tiabilies, mistakes

company location or social problems re

workers’ reluctance 1 take up a job in the SME sector On the other hand, sh

Dariers concem problems with access 10 capital (although in the case of some enterprises this bamier can be telaively permanend, problems swith company {equipment or breaks in the supply of energy gas, ete oa company Ateation should bbe paid to the fact that division of barriers according to this criterion is dependent on the situation of a particular economic entity and the analysis of these barriers require conducting vertical esearch,

A, Skowronek-Mielezarek includes inthe barriers to development in the shor run: lack of processing powers, insufficient number of managerial staff and qualified

‘workers, high costs of financing activity, lack of working capital, exchange rates, costs

of research and development Long-term limitations concer, in turn: difficulties in

‘maintaining continuity of management, export limitations, bi

evelopment, limited demand in the market, lack of long-term sources of financing, domestic regulations (including tax regulations) and European Union regulations as well as difficulties in accessing new markets

ed e.g 10 low prestige of an cnterpreneur or

3.3 Barriers to development of SMEs in a generic scheme

Systematizing barriers according to the criterion of their type is an important Livision, complementary to the ones presented above Six groups of limitations ean he distinguished, systematized according to similar substantial features resulting from foceurrences taking place in internal and external environment of an organization which can negatively influence a company development, In literature, & lo of generic schemes of bartiets to activities and development of enterprises ean be found In Polish conditions research on these occurrences Was started mostly at the time of

' Pazcolowski T, Ma encphlopaiapraksclop opt 9 106

'Skowramek-Miclearsk Ay Mate | ethic presbighionvn Zed finansowana, Wydawnictwo CHBedk Wanzava 2001p I3

economic and political transformation which happened afer the year 1989 B Piasecki sas one of the forerunners who, along with his team, identified limitations such as

‘market and financial barriers, the ones related to the goverment policy, offices, production, workforce, infrastructure or management™

‘This research was later continued by preparing statements about the condition of the SME sector in Poland within the Polish Agency for Enterprise Development and conducted by a number of scientific centers in the whole county,e.p research conducted by research teams under the supervision of K-D,

‘Matusiak and E Stawas2" S Lachiewiez™, N Dasekiewicz, J, Wasilezuk, F, Blawat and others as well as the team of B Nogaiski and J Rybieki" or K, § i time”

[As the consequence of this research, certain groups of barriers to activity and {development of SMEs in a generic scheme emerge ‘They include: market, social, financial, political and economic, egal, corruption barriers, the ones related to access

to public procurement market, technical and technologieal hindrances, information and

natural environment and also international barriers The above groups of limitations are

educational barriers, the ones related to infrastructure or resulting fio

mainly the consequence of the conditions of competitive environment and macro environment of SMEs Therefore, they are mostly external barter

‘The second group of limitaKions in a generic scheme inclides weaknesses of

‘management, competencies, Knowledge and qualifications psychological ones, production limitations, the ones related to the size of activity and also innovativeness harriers The origin of these factors is found mostly in intemal environment of an enterprise, therefore, they affect the appearance of internal barriers to development in a greater der

Market barriers include first of all problems connected with market demand limitation e.g as a result of decrease in purchasing power, problems coneeming competition or hardships connected with finding new outlets Barriers coneerning aff include unwillingness take up a job in the SME sector, which makes it difficult for smaller enterprises 10 gain qualified workers Employees’ low tendency lo

‘commute of high staff fluctuation in an enterprise are important obstacles

Limitations in development of SMEs can be also caused by some unfavourable social oceurrences, which include eg difficulties in aecepmee o[ social Stratification, social sense of disrespect towards people working in private companies

ee: Lachey Sed) Male my w repo op di

gh Blast Feds), Prete trons} mayen dich predsghonse, Seine Pabishing Gea Glas 2008

ges Nogabsi Hh, Rybicki 1 (4), Kưlowame lodluenejaoki mulseh i Srednich perdsghionsw a rymkach Uni Esroejsie, Fantacja Reswojo Uniwerstets Gdansice Gash Sore "Nogalsk "By Kybicki J is), Kezikowaniekoakurcacyjoschonyeh Ì wolieh petites Func Rozsa Uawersyteta Gdatshiepe Guise 2007 ee Safin K lode) Zanralznie musty Šetm pơedvSumtvem, Wydsvaienen AD we roel, Wel 2008,

— low level of accumulative abilities of small en

return of invested capital,

— high costs of functioning influencing low level of profitability, which is not ccondueive to accumulation of funds,

difieulies in asseing objectively economic and Financial situation of these enterprises, which is often the necessary condition for gaining external capital,

~ high costs of obtaining funds and high security equited,

— complex and time-consuming procedures concerning gaining capital

— limitations connected with organizational and legal form of activities and the form

of accounting

‘Barriers resulting from the country policy ancl genet

the next group of limitations They include dangers such as too general guid

politcal strategies and programs, delaying executive actions aad also not takin

position on continuing policy towards SMEs Legal barriers constitute a broad and intemally complex category of buriets to develo al dangers in this group include the amount of tax and social insurance liabilities or insufficieney of| administration of justice, Problems conceming costuption or erime danger belong 10

4 particular group, that ean be partly included in legal barriers, though itis isolated by some researchers” Barriers related 10 accessing SMEs in public procurement market also belong (0 legal limitations, although it is @ specific group of barters They include administration difficulties behind the access 1@ public procurements,

‘which require high qualifications, guarantees or disrepard technical specifications Technical and technological barriers are the next group of limitations, which include difficult aecess to external technological thought, fast technological progress

in branch and in the world and high costs of investment in the sphere of technol Information and educational barriers can be also a threat o SMEs, They include tao Tie information about support programs for SMES oF lack of broad and exsly accessible system of enterpreneurs’ uaining Barriers related to road, energy, felecommunications and water infrastructure are also problems, | Natural environment bairiers ate the next group They include changeable weather conditions, restrictive regulations concerning environmental protection or high costs of ecologic solutions International barriers, including limitations connected with incernationalization of enterprises, ate the last group of external barriers Selected extemal barriers to development of SMEs, including high-technology SMEs, in a seneric scheme, are presented in Table 7

© Skowsonck Mivkrark A, Mate rede øp dt p 10

“sos: Marin M Statice I Giwne bare voxwojo malyeh fm tschnologcznyeh, fn] Nogaleki

fh Rybieks J (eds), Kertliowanie Konkereneyjosc) ule steich pyiclugMiupMAe, ni Ros Univerytts Gunskcpe, Gs 207,110

‘Table 7 Selected external harriers w development of SMEs ineludit

high-technology SMES, in generie scheme

= gutations of manpeil sa

Aicolesn accoing cal seaton, Isling ot despot of worker opiate compe ein ved towards maining Tnefiientenkrpiseclue,