Management Development Needs in SMEs: Managerial Practices versus Theory

The evolution of the competitive environment together with phenomena such as the increasing globalization of markets underlines the need for managerial development in SMEs. These companies are often criticized for their insufficient formalization. Tacit know-how which is strongly tied to the local context and extremely technical in nature; managerial approach is very centralized and based on the experience, personal knowledge and intuition of the people in the key roles in the company. The focus on technical aspects and production can be seen in the rooted conviction that the only real determining factor for competitive success is the technical excellence of the product and production processes and that structured and sophisticated forms of management are seen therefore not necessary. Research and conceptual elaborations have pointed out the growing need for advanced and codified managerial practices. The process of defining managerial practices in SMEs takes place mostly in response to operational needs, which present themselves at the start-up of the business and improvements are planned, but rather are made only in response to contingent and emerging problems and often offer short-term solutions. Literature and practice highlight the need to stimulate development of managerial practices in SMEs especially the growth oriented small to medium enterprises. The aim of the research presented in this paper is to study managerial process at strategic and tactical levels in manufacturing SMEs using a theoretical and empirical approach. An inductive research methodology developed a taxonomy, which identifies internal/external tactical and strategic tasks in manufacturing SMEs. An in depth multiple case study methodology was carried out in order to compare Italian and Scottish manufacturing SMEs. A self-scoring method was applied to assess company performance. This study investigated similarities and differences across Italian and Scottish companies. Subsequently, two data sets were analysed in order to link managerial practices to achieved performance. The research has practical implications as it provides SMEs with an adequate framework and methodology that is useful and valid to support the analyses of managerial practices in SMEs. Moreover a deeper understanding in managerial practices and skills by suggesting a unified and structured framework is presented.