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The purpose of this paper is to propose a performance measurement and management system (PMMS) for small- and medium-sized enterprises (SMEs) based on an analysis of the connections between the firm’s business practices and financial results as reported in the financial statements.

Secondary data on the business practices and financial statements of 108 Canadian manufacturing SMEs were taken from a private database. Items from financial statements were used to measure the firm’s performance in specific areas such as sales and current assets management, while net profit was used to measure the overall performance. Information about the level of adoption of more than 120 business practices by the sampled firms was also used. Step-wise regression was then performed for two consecutive years to identify the business practices that had significantly influenced the items in the financial statements.

The findings show that an understanding of the business practice/financial statement connection can be useful in managing SME performance. The regression analyses provide rich and interesting results. They indicate that some practices influence performance quickly, while others have a deferred effect. In addition, some practices have impacts that are significant in specific areas of the organization but insignificant in terms of overall performance, while others affect the firm’s overall performance but not the specific area they are intended to improve.

The main limitation of the study is the non-probabilistic sample. However, the sampled SMEs vary widely in their characteristics, which should partially mitigate the negative impacts of a non-probabilistic sample.

The paper offers a useful and low-cost PMMS for SMEs, using information that is easily available to owner-managers. It shows that SME performance can be managed using a simple system built around the firm’s financial statements.

The study is one of the first to empirically test the connection between an extensive list of SME business practices and the financial results presented in the firms’ financial statements.

The purpose of this paper is to identify business practices that may promote internal financing of growing SMEs. The authors expand the literature on entrepreneurial finance that reduces business practices to either financial management or bootstrapping, by exploring all management practices that may have an impact on liquidities. This study enriches the literature on business practices. This is an important consideration for managers of SMEs who intend to preserve their financial independence and their capacity to survive different crises.

The empirical study involved a sample of 235 growing Canadian SMEs. The sample was extracted from a private database using a questionnaire that covered a wide range of business practices. Variance testing of business practices between SMEs with a line of credit and those without (and lower overall debt) was supplemented by a logistic regression.

SMEs which make use of efficiency-promoting technology, carry out preventive maintenance and control their costs and turnover during their growth are more inclined to use less external financing.

This is the first study that associates business practices, beyond bootstrapping, with financing and which answers a critical question posed by SME executives on how to preserve their financial and decision-making autonomy through growth stages. In addition, the desire to retain control of the company does not compel the SME manager to limit the size of the company.

In a context of greater environmental uncertainty, understanding the practices and strategies adopted by the SME owner-manager to deal with it is an important topic.

Based on a questionnaire survey of 583 SME owner-managers, a cluster analysis based on the degree of perceived uncertainty was conducted.

A statistical differences across a continuum with regard to entrepreneurial orientation, information gathering, management and absorption practices, innovation and internationalization was observed. These results show that the behaviors, and strategies deployed by SME owner managers are adapted to the degree of uncertainty these individuals perceive. Moreover, these results are not linked to their individual profiles nor to those of their companies.

The results show how SME owner-managers can increase their capacity to face uncertainty by collecting different types of information from different sources, by traveling abroad, by hiring personal with diverse profiles and by dealing with situations outside their norms. Public authorities in economic development interested to promote entrepreneurial decisions are invited to produce and diffuse valuable information to reduce uncertainty perceived by owner managers to support SMEs.

This research is original in that no study has holistically examined the link between uncertainty and the strategic and organizational practices of SMEs. It also responds to political and managerial concerns to effectively support SMEs under conditions of uncertainty – contexts that are increasingly important these days.

The purpose of this paper is to analyse the risks associated with outsourcing production to emerging countries with lower labour costs, namely China, and study actions and plans used to reduce the influence of factors/drivers that induce these risks.

This research uses a multiple case-study methodology, involving seven Canadian manufacturing firms that have chosen an outsourcing strategy in China. It is based on a particular approach of classifying factors/drivers that may generate risks related to this strategy and on interviews with two managers per firm to reduce personal bias.

In each of the seven cases studied, outsourcing was chosen to take advantage of lower labour costs in China, but in reality, costs were higher than expected due to unforeseen factors inherent to the risks involved. This study reveals that risks generated by factors/drivers such as lack of experience, reduced control over foreign operations and cultural differences are of major concern for managers outsourcing part of their production to China. However, according to some executives that were interviewed, certain actions can be taken by firms to overcome the negative influence of these factors/drivers. Furthermore, some risks may have multiple causes or be induced by other risks.

The sample of this study was composed of firms from different industrial sectors, and the authors were therefore unable to analyse sector-specific risks. As the industrial sector has an impact on the technical complexity of the products and their components, it would be appropriate to reconduct our research using samples drawn from similar sectors.

These findings can help guide the decisions of managers wishing to outsource some of their activities to China and other emerging countries. They will contribute to the success of outsourcing strategies to these countries, as they reveal the risks associated with these strategies and the ways to deal with factors/drivers that can induce them. For example, building long-term relationships with Chinese partners based on collaboration, trust and mutual benefit as well as conducting a rigorous prospecting phase and taking time to select the right subcontractor can have a major impact on reducing risks.

The main contribution of this work is the analysis of risks associated with outsourcing to China, based on a categorisation of factors/drivers that can generate these risks, and the study of how firms manage these factors/drivers and control their negative effects. The nature of the practices and actions used to manage important risks depends on the characteristics of the companies, their size, resources and the products they outsource.

The purpose of this paper is to shed light on the nature of intellectual capital in small to medium‐sized enterprises (SMEs) and how it is linked to strategy and performance.

Using structural equations, a multivariate model is presented where multiple relations are tested between different components of intellectual capital and performance. The model is tested first on a unique sample of 267 SMEs and second on two subsamples where SMEs are grouped according to their strategic profile.

Findings confirm that SMEs that adopt different strategies organize their intellectual capital in a particular and adapted way. When an attempt is made to link intellectual capital components to performance, it is noticed that the latter is strategy specific, just as the variables that influence performance. Prospectors dominate defenders on most intellectual capital components.

Use of secondary data may provide less precise results that could make an incentive to conduct other studies with specific determinants of intellectual capital and try to make clear definition and measurement of this concept and its components.

Even if the results have an exploratory nature, they confirm that SMEs organize and develop their intellectual capital in conjunction with their needs and strategic profile, revealing their heterogeneity. This has implications on the ability to generalize specific behaviors to all SMEs, and could prevent government from developing public policies that are supposed to fit all SMEs.

Most research on intellectual in capital SMEs is conducted on specific sectors linked to activities requiring high levels of knowledge or technology. But these results concern a small proportion of SMEs. This study expands those analyses to a much broader variety of sectors, revealing some links between specific components and performance taking into account strategic orientation. This is the first study on manufacturing SMEs that considers various non‐technological sectors and strategic profiles.

The purpose of this paper is to show that benchmarking allows SMEs to improve their operational performance.

The paper presents a fully implemented expert diagnostic system which evaluates on a benchmarking basis the performance of SMEs.

The research results with hundreds of SMEs show that benchmarking allows them to improve their operational and financial performance thus confirming the usefulness of benchmarking for SMEs, especially since traditional performance models for large enterprises do not apply well to SMEs.

Based on data mining techniques, future work should allow us to significantly extend our knowledge on SMEs, and further improve our evaluation model of SME performance.

Practitioners and researchers should pay more attention to benchmarking as a valuable performance evaluation tool, not only for large businesses, but for SMEs as well.

The paper highlights the development and use of a benchmarking‐based “360‐degrees” performance evaluation system for SMEs.

In the now global business environment, SMEs are being subjected to increased pressures. In the manufacturing sector in particular, increased requirements for information and knowledge management, innovation, quality, and flexibility within new organisational forms such as the network enterprise entail organisational developments that can affect critical business processes, R&D in particular, and business performance. Hence, the customer dependency of manufacturing SMEs on certain important customers or the absence of diversification in their customer base can have significant impacts on the R&D activities, the productivity, and eventually the profitability of these organisations. Through an empirical study of 179 Canadian SMEs, it was found that more commercially dependent firms allocate more financial and human resources to product R&D. These firms are also less productive in that they have relatively fewer sales per employee. While customer dependency seems to negatively affect the SMEs’ profitability, firms whose product R&D activities are more intense report significantly higher gross margins. R&D activities could allow manufacturing SMEs to counter the influence of their major customers, by reversing the direction of commercial dependency, and thus to reduce their vulnerability.

The purpose of this research is to verify whether or not the accounting beta, a recognized measure of overall risk in publicly traded companies, can be used with unlisted businesses.

The paper presents an empirical study using factorial and regression analysis to measure which components of the global risk of SMEs are linked to accounting beta.

The results show that accounting beta does not seem to constitute a global measure of SMEs' risk, being explained mostly by financial risk and not by commercial, technological, management and entrepreneurial risks components.

Researchers will have to turn towards other models than accounting beta that include financial and nonfinancial dimensions of risk in order to obtain an adequate assessment of the overall SMEs' risk.

Risk is the element that determines access to external financing as well as the lending conditions. Results obtained in this research show that accounting data cannot be used to express overall risk of SMEs, because they are not global enough and are not good predictors of future situations.

This article presents limits inherent to financial data to properly measured global risk of SMEs.

Over the last 10 years, small- and medium-sized enterprises (SMEs) in developed countries have faced increasingly stiff competition in their local markets, which has put the survival of many of them at risk. To reduce their vulnerability, many SMEs have targeted sales to other countries. Recently, however, the pace and intensity of these firms’ export activities appear to have decreased, as their traditional markets (i.e., the United States and Europe) have been experiencing slow growth. This situation has led some SMEs to explore the possibility of exporting to less traditional countries presenting more opportunities. However, a good number of entrepreneurs remain hesitant to go down this road, in particular given the uncertainty that prevails in those regions and the risks they represent in terms of exports. This study, which was conducted with a sample of 582 Canadian manufacturing SMEs, reveals that two characteristics help explain the fact that some SMEs choose to export to higher risk countries, more specifically to Asia. These characteristics are a positive attitude towards risk-taking among managers and the implementation of certain risk management mechanisms.

In order to deepen one's knowledge and further build theory on the implementation and use of advanced manufacturing systems (AMS) in small and medium‐sized enterprises (SMEs), the present research seeks to explore the following questions: What is the present level of AMS sophistication in SMEs? What characteristics of the SMEs' strategic, organizational and entrepreneurial context are associated with higher levels of AMS sophistication? And what are the operational and business performance impacts of this sophistication for small and medium‐sized manufacturers?

A survey of 248 Canadian manufacturers was used to collect data that were analyzed by structured equation modeling.

AMS sophistication significantly impacts both the operational performance and the business performance of SMEs. Antecedents of this sophistication include the education and experience of the owner‐manager, the strategic orientation of the firm, the type of production, and the commercial dependency of small manufacturers.

The nature of the sample and perceptual nature of certain measures impose care in generalizing the results of the study. Future research should examine environmental factors (e.g. environmental uncertainty) and structural factors (e.g. structural complexity) in particular for added explanatory power of AMS sophistication.

Small business managers, wanting to increase their firm's manufacturing flexibility, reduce costs, improve quality, and eventually increase profitability, should look at the present level of AMS sophistication in conjunction with their strategic intent.

Given the dearth of empirical knowledge in this regard, the present study has contributed to a better understanding of the nature and state of AMS sophistication in small manufacturing firms, and of the antecedents and outcomes of this sophistication.