SMEs Face Financial Crisis and Downturn in Their Operations Especially in Canada - Essay Example

Although these businesses were the ones that bore the brand of the recession due to their huge financial investment, Small- and Medium-Sized Businesses (SMEs) too had their own problems that they experienced during the recession.
The report by Celal and Parent is timely since it focuses on an area that did not have adequate research prior to their study. SMEs deal with the people directly as they have their management and offices in the communities they offer goods and services as opposed to multinationals that might only have offices for supply reasons and maintain decision-making functions far off in their headquarters. As such, a report that offers insights into how SMEs can survive when faced with such a recession and downturn in future is highly welcomed.
The study is a revelation to those in need of a strategic plan to help their businesses stay afloat whenever they are faced with a financial crisis. Application of Celal and Parent’s report cannot be limited to a time of global financial recession. The business practices that owners exercised can have wider application to business that needs to reduce their expenses for other internal financial reasons. For example, according to the study business owners had to use methods like working longer hours, taking a salary cut, acquiring more debt, and cancellation of personal vacations (1). Such methods employed by SME owners during a recession can still operate in rescuing businesses that need to stay afloat due to their own financial crisis.
The study by Celal and Parent is important in minimizing the effects of the recession in future as it provides a range of changes in their review of the policy measures that business enterprises can use in face of the financial crisis. One of the strengths the report has is that the researchers break down policy measures employed by SMEs into finer details. The researchers go further to analyze every aspect of the business strategy on their own before moving on to analyze the strategy as part of the whole effort of saving the SMEs from going under. The report covers all areas in which there were changes effected to ensure the SMEs survive including such area of business operation as business owner’s behavior, markets for the business, sales and marketing strategy employed, measures concerning employment, financial strategies, reactions and most requested policies, growth strategies and fiscal policies.

Celal and Parent’s wide coverage of policy changes for SMEs makes it valuable due to the completeness of the analysis.
Although Celal and Parent covered most of the areas that SMEs can use to fight recession in future, the analysis is not without some drawbacks, the study limits its scope to SMEs operating in Canada to arrive at its conclusions. Maximum application of the study is possible only when a business enterprise consuming this research finding operates in a business environment that is similar to the one that the SMEs that were sampled in Canada face. The study should have included business organizations in other market environments in their sample to increase the scope of application. A sampling of SMEs in other countries and the market environment would also help SMEs in Canada. This would have provided insight into policy measures SMEs outside of Canada put into practice to survive the recession.
The entry noted in the study by Celal and Parent as ‘other’ on the graph is not specified to indicate what they might include. There are instances when the entry goes up to 11 per cent in the analysis of changes in employment (3). Such changes might be the difference between failure and success of a business strategy employed by the SMEs sampled. The research should have gone further to highlight which other policies or changes were put in place. The entry becomes irrelevant when one wants to apply it in future since it is not specified in the study.
Further, the study does not include input from employees of the SMEs sampled. Celal and Parent focus on what business owners did to maintain operations. Although owners run SMEs and make decisions, employees have input when it comes to business ideas that help in making the business competitive. It is possible that employees too had something to do to ensure that the business remains in operation even with the tough business environment. Since many of the employees feared retrenchment, they might have come up with business ideas that helped save the enterprise. This study does not tell us what policy measures employees came up with to help the business stay afloat.