An Investigation into the Current Success Factors for Small and Medium Enterprises in Thailand - Dissertation Example

This is a business research study focusing on small and medium enterprises. This study is designed to further our understanding of what makes for a successful enterprise in the context of the various difficulties they face. It, therefore, fits in with other research that has also been conducted on SMEs, specifically on those in Thailand. An SME is a ‘small to medium enterprise’. The exact size or number of employees that makes a company an SME differs between countries, but in general, it is considered as a company with no more than about 500 employees.

There is also generally a lack of consistent cross-country data available on SMEs. The International Finance Corporation (IFC), a member of the World Bank Group, distinguishes between three types of companies that together constitute an SME (Fan, 2003). These are detailed in the table below along with the number of employees, total assets and total annual sales that define that type of company. The growth of SMEs depends on a host of factors, which may differ geographically as well as the nature of the economic environment.

Their existence arises from historical determinants, and their sustained growth is dependent on the growth opportunities provided to them. Their success, however, is dependent on prevailing economic factors such as government support and conditions of low inflation. During the previous century, Thailand transformed itself from being a traditional peasant economy to becoming one of the most successful countries in the region within a few decades (Numnak, 2006). The process was so remarkable that it is often called a ‘miracle’.

Since then, however, Thailand has had a difficult ride, through a number of turbulent periods, in particular, the Tom Yum Kung disease in 1997, the Severe Acute Respiratory Syndrome (SARS) crisis in 2003 and the tsunami in 2005. Tom Yum Kung is actually the name of a well-known Thai soup, but here it refers to the economic crisis that occurred resulting from a jolt to the country’s reputation (Pumpaisanchai, 2004). The condition was caused by a combination of over-investment and fraudulent activities in the financial sector.

It led to thousands of SMEs becoming bankrupt (Srivihok & Intrapairot, 2004) and over fifty financial institutions collapsed (Sookying, n.d.). SARS was a viral respiratory illness that spread worldwide in 2003 (CDC, 2005), in which Thailand was among the worst affected. It is a more dangerous form of pneumonia. A tsunami literally means ‘a destructive harbor wave’ in Japanese. It is a catastrophic ocean wave that results from an underwater earthquake, volcanic eruption or landslide.

It can destroy entire coastal areas as it did in South Asia in 2005. It is important to examine these periods because they all impacted negatively on Thailand’s economy. As SMEs account for a significant proportion of this economy, they adversely affected the development and progress of Thai SMEs in the recent past.