Risk Management in Manufacturing Enterprises: A Comparative Study of MSEs and Large Manufacturing Enterprises
Introduction
Business world is composed of various factors which affects the success and downfall of the enterprise. Through the strategic management and leadership within the organization, there is an increase in competitiveness which is suitable to the era of globalization. Hence, every strategic approach varies onto what is the type and size of the enterprise.
Background and Problem Statement
Accordingly, the manufacturing industry is already dominated by large enterprises (Sura, 2009). Both developed and developing countries recognized the sudden of the manufacturing industry under the management of the large enterprises. Because of the ability of the large enterprises in terms of technologies and pooling the resources, there is no doubt that this industry is led by the large corporations. In addition, the impact of globalization happened to change the outlook of the business leaders by expanding their business environment. This adds to the income generation of the organization and continuously strengthening the capability of the enterprise to pursue its long term goal. On the other hand, the small enterprises find it difficult to enter in at the global arena because of various uncertainties and the realization of disadvantages. However, the small enterprises draw its advantages by creating a strong ground domestically. In what ways do the small enterprises, like MSEs, and large manufacturing enterprises are similar and differ on each in terms of the risk management in manufacturing industry?
Research Aim and Objectives
The aim of the study is to draw the risk management assessment and strategies in different size of enterprises. This is possible through the stratifying the objectives involved. First is to describe the operations of MSEs and large enterprises in manufacturing sector. Second is to provide the assessment in handling the risks that might involved in the management of each enterprise. And last is to recognize the effective strategies that bring the favorable path towards the success and profit generation of the enterprises.
Literature Review
MSEs are often describe to have an easy operation but characterized by having the limited capacity in obtaining additional investments because of the risks. In manufacturing industry, the enterprises will the meet the diverse features and needs which increases the complexity in the business. Some organizations strategically settled in unsaturated markets which definitely delivers the advantages in the operation. Others propose to continuous the practice of expansion. But all enterprises have a little potential in growth is the leaders failed to seek the appropriate approach in the management. The risks that involved in the respective markets might affect the income generation of the large enterprises and increase the economic vulnerability of MSEs (USAID, 2006). The focus of the enterprises varies depending on the application of the strategies like the utilization of resources and technologies in terms of securing the business. The technological change may be a part of the solution of MSEs and large enterprise but it is assumed that the technological aspect creates various level of capacity. For an instance, the technologies can create a dramatic approach in employment opportunities but widens the gap between the MSEs and large enterprises through viewing the respective financial or investment capacities. In addition, the interventions implemented in the manufacturing industries might change because of the active participation on the large enterprises and even widen their position in production channels, such as the suppliers and traders, just to compete with the other large enterprises. The continuous expansion affects the competitiveness of the MSEs. However, the globalization sill offers the greatest potential and benefits directly to the MSEs under the manufacturing even if there is a low drive of technology because of the labor capacity. The issue of the market access seems favorable to the MSEs because the enterprises are identified to successfully respond on the market opportunities but fails to support it continuously because of the weak long-term support, and the large enterprises followed by fashioning the products (ITDG, 2001). Enhancing the capabilities of the MSEs has been the source of concern of many government and foreign organizations because of the lack in confidence, administrative, technical, and scientific capacities in meeting the conditions in globalization. All of the institutional weakness in MSEs is opposed on the large enterprises. However, it is said the MSEs played an important role in reducing the poverty in most of the developing countries (Mnenwa & Maliti, 2009).
Methodology
The suggested method in the study is the use of comparative case studies that focuses on the MSEs and/or Large enterprises. It is a great opportunity for the study to consult the various research and cases – particularly in managing the enterprises since there is a great influence of globalization. In addition, the previous studies lifted the various theories that might detect the approach of the enterprises in manufacturing environment. The method can also discover the various manufacturing situations even in foreign settings.
Conclusion
In examining the various opportunities and approach of the management leads to developing and adopting the appropriate technology. In addition, this provide an excellent breeding ground for the entrepreneurial and managerial talent for both MSEs and large enterprises.
References:
ITDG, (2001) International Strategy for ITDG’s work with Manufacturing Enterprise, Improving Livelihood Opportunities from Small-scale Manufacturing and Processing Enterprises [Online] Intermediate Technology Development Group - Practical Answers to Poverty, Available at: http://practicalaction.org/docs/t4sl/t4sl_manufacturing_albu1.pdf [Accessed 02 July 2010].
Mnenwa, R., & Maliti, E., (2009) Assessing the Institutional Framework for Promoting the Growth of MSEs in Tanzania: The Case of Dar es Salaam [Online] Research on Poverty Alleviation, Available at: http://www.repoa.or.tz/documents_storage/Publications/Research_Report_08.6_LR.PDF [Accessed 02 July 2010]
Sura, W., (2009) Specializations within in EU Manufacturing [Online] Eurostat, Statistics in Focus, Available at: http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-09-062/EN/KS-SF-09-062-EN.PDF [Accessed 02 July 2010].
USAID, (2006) Micro and Small Enterprises: Unexplored Pathways to Growth [Online] United States Agency International Development, Available at: http://www.bdsknowledge.org/dyn/bds/docs/544/USAID%20AMAP%20MSEs%20Unexpected%20Pathways%20to%20Growth%2006.pdf [Accessed 02 July 2010].
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