Class 9 - Management Control in SMEs

What is a Small or Medium Enterprise?

• A SME is a company with <500 employees

  • Small companies <100 employees

  • Medium companies - 101-499 employees

• 98% of business in Canada are small businesses with 1.5% being medium-sized

What makes SMEs distinct from “large” companies?

• Small size 

• Less complex operations (ie - less diversity and number of products/services, markets, organization structure)

• Focused more on “Search” activities vs “Execution” activities 

  • Search activities relate to developing an understanding of customer segments (markets), value props (eg - price, quality, selection), product/service features, distribution channels, pricing 

  • Startups are generally in the search phase

  • More established SMEs operating with mature products or services will be focused more on execution activities

How could the two distinct factors that distinguish SMEs from larger organizations increase or decrease control problems? 

To what extent may SMEs use various FR control system elements?