Crisis situations: how should micro, small and medium enterprises handle them with a long term view?

Abstract

Purpose

Micro, Small and Medium Enterprises (MSMEs) are the backbone of economies. They employ about 70 percent of the working age population and produce on average about half of new value-added. Self-employed micro’s are a special segment of the MSME population. They are either the typical service providers or the new start-ups, later becoming rapidly growing gazelles. It is therefore very important that the majority of these businesses survive crises. There are plenty of suggestions about what governments should do to help, but what should MSMEs themselves do, not only for survival but also for a successful future? This is the topic of this article.

Design/Methodology/Approach

The article is based on international research findings and the long-time professional experience of the author on the operations of the MSME sector in an international context.

Findings

MSMEs can survive and even thrive on challenges created by sudden crisis situations, like a pandemic, if they have a proactive managerial mentality and also diverse professional knowledge, often called intellectual capital. There are well-known, but perhaps now neglected, management techniques which can support this combination of short and long run orientation, including future building aspirations. Combined they can enhance the intellectual capital stock of business, serving as a springboard for future sustainable success.

Originality/value

Crisis situations do not happen – fortunately - too often. Therefore. experiments about how to handle them, especially in the MSME sector are not extensively available. This paper suggests a tool-set which might be especially useful not only for handling crisis situations, but also for improving chances for lasting business success.

Citation

Csath, M. (2021), "Crisis situations: how should micro, small and medium enterprises handle them with a long term view?", Development and Learning in Organizations, Vol. 35 No. 3, pp. 10-12. https://doi.org/10.1108/DLO-04-2020-0086