Success Factors for Small and Medium Enterprises in Thailand - Essay Example

The type of businesses involved in this study is small and medium business enterprises (SMEs), which are characterized by being relatively smaller than larger enterprises (LEs) in terms of the number of employees or amount of fixed assets. The geographical region in focus is the country of Thailand in South East Asia. A range of different types of SMEs will be included from various sectors so that the findings are representative of Thai SMEs in general. Thus, it includes the production, wholesale and retail sectors. We shall adopt the classification of SMEs as defined by the Thai Institute for Small and Medium Enterprises Development (ISMED, 2010) as follows: Similarly, the study will not be confined to SMEs in a particular area of Thailand because that would not necessarily be representative of Thai SMEs.

It will be concerned with SMEs that are typical of Thai origin whether from the capital, other cities, or the rural areas of Thailand. The problem to be studied is how Thai SMEs can overcome the myriad of problems they face in being successful. Despite the large number, significance and potential of SMEs, they are more likely than LEs to be faced with a number of problems and limitations. These are primarily related to the areas of administration, management, finance, technology, human resources, and marketing (Garengo, and Bernardi, 2007).

For example, the problem of gaining access to sources of funding is very common. Often, SMEs are unaware of potential sources of finance, lack the management skills to satisfy lenders, and are unable to meet lenders’ rigorous assessment criteria and screening process (Atrill, 2006). Even then, SMEs are often not able to receive sufficient access to credit, as do LEs. The nature of this particular problem however is not unique to Thai SMEs as it is a similar situation with SMEs elsewhere, even in developed countries such as Europe (European Commission, 2006).

Other problems include lack of employee training (Thassanabanjong et al., 2009), especially in family-owned SMEs (De Lema and Durendez, 2007) an informal approach if not negligible regard to human resource management (HRM), and consequently low productivity (Huang, 2003).