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Typology Analysis of Performance Models of Small and Medium-Size Enterprises (SMEs)
Amana Commercial Consultants, Partille, Sweden.
Pennsylvania State University, Great Valley Graduate Center, Malvern, PA 19355, USA.
2004 (English)In: International Journal of Entrepreneurship, ISSN 1099-9264, Vol. 2, no 1-2, 155-177 p.Article in journal (Refereed) Published
Abstract [en]

A number of firm performance models are available. Reviewing these models and pointing out their individual strengths and weaknesses, would help both academic researchers and professional users to understand and appreciate how and when to use these various models. The theoretical models for Small and Medium-size Enterprise (SME) performance can be divided into two categories: firm dynamics theories and performance prediction models. In the first part of this paper we review, in a condensed manner, the most relevant firm dynamic theories, i.e. SME's performance models. These include: Stochastic Theories, Learning Model Theories and Hazard Modeling Theories. In the second part of this paper, we examine the performance prediction models of SMEs, which include Z-Scores, ZETA-Scores, Neural Networks (NN) and the SIV® models, among others. The strengths and weaknesses of each of these models are exposed and discussed.

Place, publisher, year, edition, pages
SpringerLink , 2004. Vol. 2, no 1-2, 155-177 p.
Keyword [en]
small and medium-size enterprises - survival index value - SIV® model - Z-scores - neural networks
National Category
Economics and Business
URN: urn:nbn:se:liu:diva-71336DOI: 10.1023/B:JIEN.0000026911.03396.2dOAI: diva2:447480
Available from: 2011-10-12 Created: 2011-10-12 Last updated: 2011-11-21Bibliographically approved
In thesis
1. SME Performance and Its Relationship to Innovation
Open this publication in new window or tab >>SME Performance and Its Relationship to Innovation
2011 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Current SME performance models suffer from a number of disadvantages. The models use intensively a business ratio approach, they look at SMEs as a homogenous group, they consider firms to be closed systems, they do not directly incorporate the impact of an enterprise’s innovation activities, and finally they are complex and rely on sophisticated statistical refining methods making them unpractical to use by SME managers. There are four major challenges when one tries to build SME performance models that lack these deficiencies. The first challenge is that the desired performance evaluation model must optimally incorporate both quantitative and qualitative input. The second challenge is that the model must incorporate non-financial input parameters, such as firm size and age (among others), in the performance evaluation models. The third is that the model must consider the variety of SMEs as concerns their business sectors, nationalities, sizes, and ages. The final challenge is that the model must be able to utilize existing limited information available from the SMEs bookkeeping practices in an optimal way.

The thesis addresses three questions related to constructing a better SMEperformance model, namely (1) What are the advantages and disadvantages of the existing models used in evaluating SME performance? (2) What characterizes a comprehensive model for measuring SME performance with acknowledgement of the firm’s innovation activities? (3) How can a firm’s innovation activities be enhanced in relation to the firm’s external environment?

To construct a model that copes with these challenges, I used a literature-based selection of parameters as well as a theory-based selection. I used both a conceptual approach and an empirical approach to discuss and propose a model, the Survival Index Value (or SIV) model, as an alternative to the existing performance models for SMEs.

The major contributions of this thesis to the field of SME performance can be summarized in three outcomes: the SIV model as a new model of SME performance evaluation, the ASPEM as a new tool for strategic utilization of SME performance models, and a new approach to account for innovation in relation to the external environment of the firm using the IBAM tool.

The work adds to the theory of the firm, as it presents a new way of evaluating firm performance. It also contributes to bridging the theory of the firm to organizational theory, by elevating the significance of networking and its impact on SME efficiency.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2011. 127 p.
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 1364
SME performance, performance evaluation, firm efficiency, SIV model, innovation capital, system capital, open capital, business models
National Category
Economics and Business
urn:nbn:se:liu:diva-71349 (URN)978-91-7393-219-6 (ISBN)
Public defence
2011-11-28, ACAS, Hus A, Campus Valla, Linköpings universitet, Linköping, 13:15 (English)
Available from: 2011-10-12 Created: 2011-10-12 Last updated: 2016-05-04Bibliographically approved

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