Perceptions of growth-impeding constraints acting upon SMEs’ operations and the identification and use of transitionary paths to elevate them

Abstract

PURPOSE: to know which growth-impeding constraints are perceived to act upon operations of small-to-medium sized (SME) companies by their owner-managers and to recommend transitionary paths to elevate constraints and increase contribution levels made by SMEs’ operations. To do so, this research has been primarily founded upon Hayes et al.’s (2005) operations contribution model for differentiating between different levels of operations’ contribution, and secondarily on the Theory of Constraints philosophy to explain perceptions of constraints found at each level – current and future. METHODOLOGY: an open-ended survey and a series of group workshops have gathered new empirical data about these perceptions, which were coded using Relational Content Analysis to identify a parsimonious set of perceptual growth-impeding constraint categories. The most popular transitions were identified and a correlation of frequency rank orders between ‘perceived current’ and ‘perceived future’ constraints categories were calculated, and likely transitionary paths for growth are discussed. Three SME case studies were documented in related action research to contextualise survey findings. FINDINGS: The most popular transition was from ‘neutral’ to ‘leading’. A lack of people capability was perceived to be the most commonly reported growth-impeding constraint category, followed by a combined lack of process competence and product and service innovation, further followed by a lack of skills in information technology automation. In addition, a new conceptual model has been generated inductively to address shortcomings found in the original operations contribution model (Hayes et al., 2005) during its application to UK SMEs. The new model is referred to in this paper as the ‘Operations Growth Rocket’. RESEARCH LIMITATIONS: This research only used data from UK SMEs. PRACTICAL IMPLICATIONS: This work should help SME owner-managers to overcome growth-impeding constraints that act upon their operations and assist them to develop more effective actions and paths to increase the contribution levels made by their operations. This in turn should support growth of their organisations. Findings will also inform teaching about more effective operations management in SMEs. SOCIAL IMPLICATIONS: This work should help UK SMEs to grow, which in turn will strengthen the UK economy. ORIGINALITY: A novel approach and new data from 208 SMEs modify a classical operations contribution model (Hayes et al., 2005). This is achieved by considering transitionary paths to be meta-categories continua abstracted from constraint categories combined with case data for moving towards higher levels of operations contribution, rather than using discrete growth-impeding and growth-constraining ‘levels’. This research has inductively generated a new version of the classical contribution model that should be more suitable for stimulating growth in (UK) SMEs.