Acknowledgement I Dedication

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Acknowledgement I

Dedication II

Abstract III

List of Tables IV

List of Abbreviations V

………………………………………………………………………………………………………

Table of Contents

Chapter No. 1 ................................................................................................................................................ 4

Introduction ................................................................................................................................................... 4

1.1Introduction: ......................................................................................................................................... 4

1.2Objectives: ........................................................................................................................................... 7

1.3Conditions to be the SME: ................................................................................................................... 8

1.4 Significance of the Study: ................................................................................................................... 8

1.5 Organization:....................................................................................................................................... 8

Chapter No.2 ................................................................................................................................................. 9

Literature Review .......................................................................................................................................... 9

2.1 The SME’S Performance in Pakistan: ................................................................................................ 9

2.2 Organizational Learning: .................................................................................................................. 10

2.3 Technological Innovation: ................................................................................................................ 14

2.4 Entrepreneurship skills: .................................................................................................................... 18

2.5 Marketing activities in SME’S: ......................................................................................................... 21

2.6 The Financial resources: ................................................................................................................... 22

Chapter No. 3 .............................................................................................................................................. 24

Methodology ............................................................................................................................................... 24

3.1 Introduction: ...................................................................................................................................... 24

3.2 Research Design: .............................................................................................................................. 24

3.2.1 Nature of the Research: .............................................................................................................. 24

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3.2.2 Descriptive Research: ................................................................................................................ 24

3.2.3 Quantitative Research: ............................................................................................................... 24

3.2.4 Type of the Investigation: .......................................................................................................... 25

3.3 Theoretical Frame-Work: .................................................................................................................. 25

3.4 Generating the Hypothesis: ............................................................................................................... 26

3.5 Questionnaire Survey: ....................................................................................................................... 26

3.5.1 Questionnaire Design: ................................................................................................................ 26

3.5.2 Questionnaire Details: ................................................................................................................ 26

3.5.3 Measurement and Scaling: ......................................................................................................... 27

3.6 Population and Sampling: ................................................................................................................. 28

3.6.1 Population: ................................................................................................................................. 28

3.6.2 Sampling: ................................................................................................................................... 28

3.6.3 Unit of the Analysis: .................................................................................................................. 28

3.6.4 Study Setting: ............................................................................................................................. 28

3.7 Data Entry and analysis techniques: ................................................................................................. 28

Chapter No. 4 .............................................................................................................................................. 29

Results and Analysis ................................................................................................................................... 29

4.1 Reliability Analysis: .......................................................................................................................... 29

4.2 Descriptive Statistics: ........................................................................................................................ 30

4.3 Correlation: ....................................................................................................................................... 32

4.4 One Way ANOVA: ........................................................................................................................... 35

4.4.1 One Way ANOVA (Age Group): .............................................................................................. 35

4.4.2 One Way ANOVA (Industry Wise): .......................................................................................... 37

4.4.3 One Way ANOVA (Education Wise): ....................................................................................... 39

4.4.4One Way ANOVA (Annual Turnover): ...................................................................................... 41

4.4.5 One Way ANOVA (Location): .................................................................................................. 43

4.5 Independent Sample T test: ............................................................................................................... 45

4.6 Regression: ........................................................................................................................................ 49

4.6.1 Model Summary:........................................................................................................................ 49

4.6.2 ANOVA: .................................................................................................................................... 50

Chapter No. 5 .............................................................................................................................................. 52

Conclusion Limitations and Implications ................................................................................................... 52

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5.1. Conclusion: ...................................................................................................................................... 52

5.2. Limitations: ...................................................................................................................................... 53

5.3 Future Implications: .......................................................................................................................... 53

References: .................................................................................................................................................. 54

Appendix ................................................................................................................................................. 64

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Chapter No. 1

Introduction

1.1Introduction:

The small and medium enterprises are becoming symbol of development in this

era for every country in the world, and the SME’s is contributing for improve better employment

rate, increase level of income and helps to decreasing the level of poverty in many countries of

the world. In Pakistan the SME’s was established in the decade of 90, it was too late due to lack

of interest in this segment of old governments. But in this era our governments are committed to

make strong and better SME’s sector than past eras in Pakistan. So the Pakistan government

established “SME’s Bank”, this bank provide loan and financial support to them (e-g ABD,

World Bank ILO, UNDP). This bank made by Pakistan government with the help of World

Bank. A big issue is in Pakistan the SME’s data not sufficient for making an authentic policies or

we can depend on this data and appoint limits and policies there, we have only one source or

means for collecting data “Census of establishment”(Government of Pakistan, 1988)& directory

of industrial establishment (Government of Punjab, 2002).For the SME’s the Punjab University

took a survey in the year 2003, “Gauge the health” for this segment, during this activity team

took the data from 651 different industries were executing in 10 districts of Pakistan, and the

small and medium enterprise’s share was 50% in the whole industry of Pakistan (Government of

Pakistan,1988). This research has different questions about the performance of the small and

medium enterprises consist of different elements of owner and industry. This activity recognized

the different variables those were impacted on the health of the SME’s (Khan and Rocha, 1982;

Ibrahim and Goodwin, 1986; O’ Regan et al, 2005). The purpose of this research activity was to

judge the relation among the entrepreneurial and the health and waste of the SME’s (Raja, 2004).

First of all keep it in your mind and understand without research any organization could not find

new advantages of edge or not able to earn sustain profit. Why this research is necessary the

answer is continually change in the taste of the customer than past eras, How a company can

attain competitive advantage the answer is the company sources and way of research about the

your target market and competitors, after that on the base of your resources and allocation of all

means within SME’s you able to take competitive advantage if you face competition in the

market (Makadok, 2001). In world the business of small and medium enterprises has long past

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about providing services locally people and this is a chance for them (Merrilees, 2007). The

SME’s has large contribution in the economy of every country in the world may it is developing

or developed. Pakistan is a developing country, So in Pakistan the SME’s can spread its roots in

the depth of industry sector effectively, and this sector is enough suitable because its budget not

in large amount than large industry required, the reason of this matter in Pakistan the average

class has high ratio than upper class(Gilmore et al., 2001). In Pakistan the environment enough

good and favorable for SME’s, but few hindrances also existing here like lack of advance

technology, new way but cheap method of production not avail as compared to the developed

countries(Dangayach and Deshmukh,2005). In Pakistan the SME’s executing under the SMEDA

it is monitor by ministry of industries and improved the segment of SME’s in Pakistan. The IT

system and its knowledge necessary for SME’s sector in Pakistan, Pakistan located in South Asia

the IT system much better roots here than other industries are existing(Pasha,2010). A good luck

for Pakistan is here people have good abilities in IT sector and they have expertise in this

segment. The IT sector gives lot of authentic solutions for many different types of industries

frequently like for banking sector, retailers, departmental store, medical transcription utilities and

insurance applications (PASHA, 2010). They are doing good job in Pakistan reducing poverty

rate, decreasing unemployment and bringing the economic stability (PASHA, 2010). If

developing countries focus and do something extra than past then it can be solved different

problems faced by the general public here, it can reduce poverty and decreasing the

unemployment rate (Randall, 2000; Salzer-Morling and Strannegard, 2004). The THINK

TANKS of Pakistan have positive think about this sector that it is useful for our economic, So

“SAARC” countries are making many policies seeing importance of the SME’s, on the base they

can enhance this segment over the South Asia and taking lot of benefits. Even Pakistan pay good

and sufficient attention on this sector then we can increase our export and increase GDP. But in

Pakistan the issue is the Government not pays proper attention on it, many issue can existing

there, but the major issue is well established industries are working in this country. In

October,2005 Pakistan have no any source of plan and no available any mean to established

infrastructure for the SME’s with strong and effective shape, and not able to make any useful

policies by government for this sector, and we have not tools for check and balance performance

of the SME’s(Abimbola and Kocak, 2007; Krake, 2005). It’s an understood thing the decision

making a vital part in every organization it may large and small industry, therefore all success

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depend upon on right decision making if you are not able to make good decision according to

situation then you will fail in future it will be not possible then your top management has not

ability to make authentic decision(Brodbeck et al, 2007).This issue seems like not a necessary

hindrance in those companies where director and higher management not qualified, but results

and outcome they will get in future(Perr et al., 2007). The support of the financial loan from the

different institutions is very useful for the small and medium enterprises; through to this help

they could grow and become useful segment in the sight of economy of a developing country

(GFPI 2011). McKenzie (2010) did a research and gives different indicators that the financial

loans have very important role in small and medium enterprises sectors. Gertler et al. (2011) give

an effective detailed information and infer completely that the impact of financial loan have

positive on the technology and way of producing goods like other large and rich industries doing

in the world . Bauchet et al. (2011) said that the informal financial support and loan to poor

SME’s owners a good step for them and for the economy of the developing countries provide an

excellent. Winters, Salazar, and Maffioli (2010) gives different arguments the effect of small

loan and support to small and medium enterprises owners in the field of agriculture enough

useful. The latest search tells to us that in this era women too much taking interest in

entrepreneurship and become partner as manager in many enterprises [GCU, 2004]. The SME’s

now making engines of petrol and diesel, instruments of machinery, the human operating

instruments, fans and other small good, this industry was executing at the time of separation of

Pakistan and India [Kibria, 1998]. But this industry lose its performance day by day in Pakistan

small and medium industries, therefore only the lack of skilled full management and not have

good experienced for run this segments in this region (Aftab and Rahim, 1986). Few methods of

production in an effective can impact strongly and giving a bright future as a survivor for

developing of the SME’s in Pakistan sector [Aftab and Rahim, 1986]. Many different enterprises

has lot of different links internally and externally on the base of these links they could not get

success and stability for long term in every industry, but the government policy and support can

established in a proper way[Staley and Morse, 1965]. They should have and careful about the

license for import for the latest technology, raw materials, and ability to purchase low price

machinery, and the power of purchasing raw material all of these good for the health of the small

and medium enterprises also directly favored to large industry too [Ahmed, and Amjad

1984].The best examples of ITTEFAQ steel industry of LAHORE this firm putting capital

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intended to investment in small and medium enterprises beyond the future and focus on combine

economic benefits for the best for business[Aftab, 1985]. If we say that the small and medium

enterprises contributing for the development of the economy of any country in this era and give

more opportunities for the jobs to the people and reducing the unemployment, and improving

overall economy not a single sector [Aftab and Rahim (1986), Berry, et al, (1991)].The WTO

give relaxation to the Pakistani small and medium enterprises especially and decreased the

exports duty and tariffs, these are bigger challenge for the Pakistan SME’s sector[Berry, 1999].

The SME;s sector in Pakistan adopting the latest technology and going on the peak particularly

in the field of engineering, and appointing new and latest innovative technology [Aftab and

Rahim, 1986 ].There a need of significant policy it is create a equally balance in the middle of

small and medium enterprises, and both of industries could get useful benefits from this policy

[Fransman, (1984), Rosenberg, (1982)]. The approach of finance it is lead only limited group,

this is not good for the health of small and medium enterprises (TAF, 2001).

1.2Objectives:

How government policies play an important and useful role in small and medium

enterprises in Pakistan.

How government can reduce the risk of loss, if entrepreneurial shows willingness to

investment money in the small and medium enterprises.

How government can interact to stake holders that the small and medium enterprise is a

profit able sector for them-selves.

How entrepreneurial feel happy if they agree to take interest in small and medium

enterprises, and also start invest the money that they will be run this business without risk

and fare.

How marketing activities can play a vital role that local customer get necessary

information about the small and medium enterprises in Pakistan.

How skillful management have a key role in this segment and able to push the small and

medium enterprises on equal level for contributing in economy of Pakistan.

How skillful management improves the performance of the small and medium enterprises

that our product can compete international market.

How technology improves our SME’S information and production system.

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1.3Conditions to be the SME:

(a) In the case of the enterprises engaged in the manufacture or production of goods pertaining to

any industry specified in the First Schedule to the Industries (Development and Regulation) Act,

1951, as—

(i) a micro enterprise, where the investment in plant and machinery does not exceed twenty-five

lakh rupees;

(ii) a small enterprise, where the investment in plant and machinery is more than twenty-five

lakh rupees but does not exceed five crore rupees; or

(iii) a medium enterprise, where the investment in plant and machinery is more than five crore

rupees but does not exceed ten crore rupees;

(b) in the case of the enterprises engaged in providing or rendering of services, as—

(i) a micro enterprise, where the investment in equipment does not exceed ten lakh rupees;

(ii) a small enterprise, where the investment in equipment is more than ten lakh rupees but does

not exceed two crore rupees; or

(iii) a medium enterprise, where the investment in equipment is more than two crore rupees but

does not exceed five crore rupees.

1.4 Significance of the Study:

The significance of the study means the uniqueness of the research

in this study we carefully find-out the relationship of the different variables like the marketing

activities, technological innovation, learning activities, financial factors and the entrepreneurial

skills with the performance of the SME’s in the Southern Punjab and also check the most

important for the growth of the SME’s in Pakistan.

1.5 Organization:

The remaining thesis is completed in the following manner:

The Chapter 2 provides the comprehensive and detailed literature review of the different

variables While the Chapter 3 provides the methodology used to analyze the whole research. The

Chapter 4 provides the detailed analysis of the research which includes the reliability and validity

analysis, descriptive analysis, correlation, independent t-test, one way ANOVA and the

regression to analyze the whole research. The Chapter 5 includes the conclusion, limitation,

future implications and the managerial implications of the whole study.

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Chapter No.2

Literature Review

2.1 The SME’S Performance in Pakistan:

In the world good and wise countries have

knowledge about the importance of the SME’s, and they are performing many activities for

stable this sector in their region. So Pakistani government took initiated in the 1998 and created

infrastructure under shadow the “SMEDA”, further tool step and made a bank with the help of

“WORLD BANK”. Now the united nation in the world are making policies and developing this

segment and took step by International Labor organization realized the popularity and increased

its contribution in the economy from last half decade (Bhutta et al; 2007).Few reports avail about

the structure of the management in Pakistan’s small and medium enterprises that here the owner

way of thinking rather different the manager of SME’s (Kureshi et al; 2009). A study pay

attention and can influenced to rebuilding SME’s sector (Saunder et al; 2008). Lot of things are

becoming impedes for improving the SME’s sector, the most important thing we can’t denied

from it that is lack of availability scientific data(Bhutta et al). In the year of 2006 and 2007 these

couples of years the SME’s provided low quantity scientific data (Bhutta et al; 2009). Any type

of product the customer require and quality, accuracy, durability and need outstanding

performance from its single product, customer purchase a product from the store and showroom,

and attached some expectations with this product before purchased (Allen;2006). There a good

sign that we are using TQM 22, 3318 it’s a world class and standardized level of quality in

production business in this region, but here the level of quality decreasing day by day and low

quality of products producing in this segment, this is liability of department of “SMEDA”. Some

experts said about the future of SME’s in Pakistan that segment has bright future here in coming

days Brodie et al. (2008). You can check SME’s performance in Pakistan through its ratio of

export it is near about 5% only. Many problems and hurdles faced by SME’s in Pakistan, but an

important hurdle is the poor quality of raw material for production goods (Coviello et al., 2001,

2002). An economic survey conducted by experts in 2005 about SME’s that in Pakistan the

environment suitable for this sector when outcomes of this research tell to us the SME’s sector

can easily put its roots here and become a well established department or sector, if Pakistan

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improves all of these weakness then the performance of this sector surly better than its past

performance.

2.2 Organizational Learning:

In the world many countries has awareness about the

importance of the SME’S, it is can make better and strong economy of every country

(Tambunan, 2009). They have knowledge if they established this segment and made useful

policies then they can take lot of benefits regarding to development of their economy. So

Pakistan same like other countries surviving in this segment since from last 2 decade and the

year was 1998, When Pakistan took initiative for this segment that was year Pakistan made a

bank with the help of ”World bank”. For encourage SME’S segment in those countries where

this segment are growing slowly especially in developing countries and these countries owner of

suitable environment for SME’S, these countries taking support from many worldwide

organizations Asian Development Bank, International labor organization and other many

organizations executing role for enhancing this segment in the world (Brodie et al., 2008;

Coviello et al., 1997, 2001). The purpose of all these efforts for making SME’S healthy and

sharp (Bhutter et al; 2007). Experts said and also giving suggestions for improving this segment

that how u can improve your SME’S in your country, They mention 3 useful tricks and points if

different Government of the world apply all of 3 tricks in own country, then it can get wonderful

results by Pakistani Government. 1)The Government providing support to entrepreneurial and

managers of SME’S how they can improve their SME’S and execute to them effectively, and

provide help to them directly who have no experience for executing SME’S in accurate

way(Carson and Cromie, 1990; Gilmore et al., 2001; Hogarth-Scott et al., 1996). Redesign their

old process they are using in SME’S (Manning, 1998; Oey, 1998). The Government should

encourage those entrepreneurial who are taking interest in exports, The Government should give

relief to them and providing significant awareness regarding to international market, give to them

new policies through to this they able to face foreigner competition with own production. 2)

The Government should provide all those services that are requiring in Pakistan, same other

developed countries providing to their entrepreneurial (SME’S sector). But seeing the Pakistani

environment it is easily adjusting there. 3) The main and important issue is we have no an

authentic way to understand ups and downs of International market sand what is right and wrong

for us if we want to go in this market, Pakistani Government should provide assessment to their

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Entrepreneurial for International market’s related knowledge and news through establishing

institute those provide every information and training about the International Market atmosphere.

4) The Pakistani Government should focus on SME’S policies made by other developed

countries like U.K and U.S.A. There we have been gotten some useful results of different

research (Crik, 1992), in the world several governments focused on services segments forcefully

rather than production, even service segment have no need for export into next country. This

segment cannot take place of exporting products, doing by few developed countries like U.K and

U.S.A (Crick and Cninkota, 1995).Both countries made policies for SME’S in 1995 at the time

they took decision that providing support to the SME’S in their sector particularly that segment

of the SME’S it was consist of exporting. There researchers founded that some elements are

belong to impact of adopting help about the exports segment in the SME’S and have knows

importance of government made policies for service and also progress of export segment(de

Chernatony, 2001; Kessler, 2007; Opoku et al., 2007). Another study found about England

region it was conducted from the North and called Northeast, There policies for SME’S made by

Government but all of these consider not enough for SME’S, and help for the entrepreneurial not

enough or not able to motivates themselves for SME’S, this is impede in the way of developing

of SME’S. And not supported to entrepreneurial that they take interest and play vital role in this

segment and make healthy and stable the SME’S in this region of England (Atherton and Sea

1997).But in Pakistan the Government not executing useful policies those enough for stability of

SME’S, if the Pakistani government sincere with this segment then our SME’S will give good

result and we can contribute on large scale in this segment. Our SME’S sector can compete with

U.K and U.S.A’s products (Gilmore et al., 2001; Hogarth-Scott et al., 1996). Our government

should learn and copy policies from the upward both countries and make policies who matched

with international standard. Again I show you previous example where the export rate of SME’S

rather better regarding to support of government, in Northeast through the support of government

the export rate 5 to 3%.This percentage of export the result of England government policies

Carson and Gilmore (2000). There in Pakistan the people have not sufficient awareness for

SME’S, and they have no lot of money on the base they can take risk and can invested money in

SME’S (Datta et al., 2005, p. 69). This is occurred only lack of guidelines and lack of

information and government unsuccessful for attract and safe to the entrepreneurial money, this

is only lack of good policies, lack of government support and lack of encouragement this

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government should give to them, because our country is a developing country(Abimbola and

Vallaster, 2007; Merrilees, 2007; Ojasalo et al., 2008) . We can say in short in Pakistan not exist

an authentic infrastructure for SME’S (Krake, 2005). The main issue with our government is lack

of resources. So the government should change the policies and can allocate our resources with

effectiveness by Pakistani govt. The government should make new and particular plans seeing

situation SME’S, these consist of purely for export segment. While the SME’S not about of any

single industry it is included in many different industries (Teaser, 1977). The new program and

policies may be more effective and beneficial for us and our SME’S sector can get more

stability. The government should deeply evaluation and can take deeply overview what are

hurdles faced by SME’S. After that the government able to recognizing what is requirements

need for making a healthy SME’S for exporting front of foreigner competitors (Crick; 1997;

Moini; 1998).At the end of many researches the result of research was the government should

pay attention on latest and new policies for developing SME’S sector particularly consist of

export related SME’S(Kabanoff, 1991). Our government should focus especially on those

regions and provide support where we can become more stable and can compete to any country,

Where resources avail on high quantity on cheap rate i.e. in Pakistan the clean water have lot of

quantity, if we try and produce fishes without sea water, then no doubt we can contribute in our

economy through to this segment easily Mohr and Spekman (1994). Many developed countries

take initiate in SME’S from the export product industry, but these countries made their SME’S

industry on those regions where from they easily send their products ahead like they build

SME’S near the port or airport (Moini; 1998).The SME’S can improve by our government

through using different tools like redesign structure and compare with developed countries

SME’S policies for SME’S. So Pakistani government should support with big heart and

encourage to all entrepreneurial for SME’S and should make short time policies (Das and Teng,

2000). First the governments deeply observed what needs of SME’S in this country are? And

then provide all things require for this sector in this region (Tambunan, 2009). The government

should appoint high qualified experts for this sector who have lot of information for SME’S. And

polices will be made by economic experts and they guide to SME’S experts at the time of

making policies (MacNeil, 1985). After all this process we can get accurate and positive results

from it (Miles et al., 1992. Many research’s results I conduct in this LITERATURE REVIEW, if

the government want to enhance this segment successfully then it should be focus on making

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useful policies and secondly pay attention on export segment in this sector. There many debates

and researches available done by developed countries like U.S.A and U.K, The system if we

convert into internationalization without good policies then the consequences not good and we

will be fail in future, for this purpose we have to make policies and execute locally, if these

policies getting good results then we putt step forward in export in the SME’S sector. But in

Pakistan we have don’t enough good the level of SME’S and how we can convert SME’S into

internationalization. So we have to take sharp and useful decision for improving SME’S on local

level. If we focus on export segment then you will put extra attention and efforts in SME’S

sector(Bilkey;1978;Cavusgil;1983;Crick;1992;Ginkota;1982;Moini 1998;Naida and Roa;1993).

Further more in the world many developed countries set some targets seeing government polices

and they attempted to achieve them, after government agree to provide all support and give help

for next they can enhance SME’S in future (Canon; Wills ). In Pakistan the government should

conduct a research and putt different questions in it about the different policies made by our

government for SME’S and also taking response from the entrepreneurial and managers through

to these questioner before the implement of these policies in our region for SME’S. When this

search will be complete then seeing its result and all policies will be making seeing all policies

not exceeds to them (Gankem et al; 2000).Few impedes can stop the development of SME’S like

the lack of sources and what time is require for any process in the SME’S. There we show some

maturity and should use our experience that how we can handle all of these problems with good

wise. How we can manage if a demand suddenly increase for an item in the market it is relevant

to the SME’S, in this case the time is a big issue what type of policy and logic we should to make

there(Badrinath;1994;)JSBED 14,166. We should make a department that control the export

segment in the SME’S effectively, and this department reshape the export department and

appoint and set standards those are acceptable in this sector. If we get success and established

this type of department in Pakistan for SME’S then we can compete with foreigner small and

medium companies (Kinyanjui & McCormick, 2009; McCormick et al., 2007). This department

does focus only on export segment in SME’S then performance of the SME’S will improved day

by day. The government should introduce a fast mean of convey the message and policies for the

target audience it may consist of direct or indirect, and this message full of information and in

simple process and every one can understand easily, then the result of this campaign can be

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good, and government should make a department that funding to different small and medium

enterprises (Kettenger; 1994).

2.3 Technological Innovation:

We can check here many proofs about the use of technology in

SME’s sector for creating innovation and novelty, and these innovations are symbol of success in

this segment and key of sure achieved accomplished goal set by SME’s (Hoffman et al, 1998).

Even this ability of innovation push to SME’s on top and feasibility of success must be come,

SME’s rely on this segment ,sources, pay attention on it, physical worth last one the atmosphere

in the business is executing(Burrone and Jaiya 2005). Especially in this segment the production

process is much difficult under in various determinants (Becheikh et al. 2006). Many studied tell

to us the electronic data interchange system only used in large industry, and this god and suitable

for only big industry not for SME’S. But now if we use EDI in SME’S then we can take good

results and may improve SME’S sector effectively. So we need to understand how we should

introduce this method EDI in the SME’S and can get benefits, what is process should be use for

introducing the EDI in SME’S, then if we putt efforts in SME’S in result we can get only

positive outputs(Blattberg and Deighton, 1991; Kessler, 2007). In SME’S the first barrier is weak

infra structure of the information system, if your communication source not good and fast then

your performance will be impacted. Many issues for adopting EDI we are facing lack of interest

of employees they are not ready to leave old methods and manual system, if we conduct training

and providing learning opportunity then may they can reduced their hesitation about EDI(Cragg ;

Zinatelli 1995).

Even in SME’S sector in accounting department the computer is using frequently and for this

department has no objection by any one in SME’S this is also advanced thing not old means of

managing accounting record (Heikkila et al.1991).But old way of using now has been replaced

with new methods of technology before last several years in SME’S sector. This is understood

thing that the SME’S sector has improved after the implementation of new

technology(Dall’Olmo Riley and Lacroix, 2003) .The EDI is already using in accounting

department it is proof the SME’S sector have little bit confidence on EDI, this will be enhance in

future and if it is possible then the results also increase, but the way of using of EDI on low scale

in developing countries like Pakistan than developed countries where this technology a basic and

common thing for success of small and medium enterprises, the first reason of this difference is

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lack of awareness in developing countries about EDI, the second reason is SME’S have limited

budget so they cannot afford new technology due to its high cost for appointing in this sector, the

third reason is the SME’S owner and manager think if we appoint EDI and spent money on this

system may be its not work properly due to uncertain reasons and it become reason of waste of

money and time, this type of risk exist in the mind of them that’s way they avoid EDI in their

business for executing(Cheung; Lam; 1995). Further the SME’S have no any big customer like a

large industry retains. So before adopting the EDI in SME’S we should take complete view of

different regions of SME’S in which EDI is execute and measure its performance, after we have

to make an authentic infra structure for our SME’S sector(Ind and Riondino, 2001). If we adopt

EDI without observing other regions then we can face harsh situations. The EDI is working

totally different in large industry and in SME’S according to its size and nature of work (Hung

and Li, 2007). For adopting EDI in SME’S we should compare all segments with large industries

customer wise, cost wise, nature of business and Location wise then seeing the results of this

comparison and make decision on the base of this comparison Opoku et al. (2007).

The EDI’s influence on large industry since from last decade with force on demand from the

large industry management not in small and medium enterprises (Premkumar; Rammurthy ;1997

and Massetti; Zmud; 1996).But some experts conducted different researches and observed how

many SME’S industries has been adopted new technology, hats is its ratio (Lacovou;1995).The

purpose of both researches are judging the impact of EDI in small and medium enterprises and in

large industry, for this purpose they took response to both industries employees through different

method and conducted surveys and through questioner what they thinking about the

EDI(Grandori and Soda, 1995). After this few researches conducted by different experts

performance of different industries but one by one and see difference among those industries

those adopted EDI and IS, and also took view of those were not adopted EDI and IS system (Das

and Teng, 1998; Grandori and Soda, 1995). But one thing is there may be the use of EDI in this

sector due to rich owner or May he has lot of information about EDI, may he residence of

developed country than developing(Das and Teng, 1998). So conducted any research we have

must overview of all situation and environment of selected industry (Woolthuis et al., 2005).

Even these results not enough for making any conclusion about EDI ,we need a proper

infrastructure and that give us authentic results and way of action for making useful policy that

how we can appoint in SME’S and can bring a revolution in this sector like we brought in large

16 | P a g e

industry in past(Dhanaraj and Parkhe, 2006). The big problem we can’t get separate research it

was consist of only SME’S not on both small and medium industry or large industry, because

from the mixed research we could not exact data and not observed how EDI can be good for

SME’S(Hoffmann and Schlosser, 2001). In 1990 the different researches took a start through

asking questions in questionnaire, and after measure the response of respondents, then they able

to providing sufficient help to the SME’S for putt foot ahead in EDI Ngugi et al. (2010). This is

reality for introducing new technology in SME’S rather difficulties that was time, because many

problems existed in the way of adopted EDI (De Jong and Vermeulen, 2006). First of all we

searched problems those stopped the way of EDI in SME’S ,if it was find out successfully then

we could appointed EDI in SME’S sector without any impede faced by SME’S and made

policies those providing help to SME’S sector for introducing EDI(Batterink et al., 2010). This

research was incomplete for adopting new technology in SME’S sector not good sign for

researchers, those were spending efforts for this (Lacovou; 1995).The main three elements

focused by any organization for adopting any new thing in its industry;

Organization readiness

External pressure

Perceived benefits

The size of target market should be not enough small for SME’s, they should included 7 different

SME’S in this research Rubin (1990). Through to this act if they increased sample before

conducted the research then result will be accurate and exact (Pfeffer and Salancik, 1978), after it

should be used accurate and authentic method for collected data from two hundred sixty eight

small and medium enterprises Mohr and Spekman (1994).

If researchers get good and useful result then they able to influenced to entrepreneurial that they

take this system and should apply in your industry after this your results of SME’S output will be

increased (Chouelos; Lacovou 2001).The willing companies more excited after adopted this

system in their sectors about SME’S (Dahl, 1957). The EDI system rather beneficial in many

developed countries, they are taking lot of benefits from this technology in their business (Blau,

1964). In Hong Kong the SME’S sector directly using this system in many different segment.

The numbers of these segments are 575, this is a huge ration and this segment rather developed

than those are not using EDI in their business (Provan et al., 1980). The world in converting into

global village and every field of life is adopting new and latest technology, So the SME’S sector

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knows the importance of the new technology seeing competition and want to better and strong

place in SME’S sector in different segments (Raymond and St-Pierre, 2004). The government

should support to them in this system and give complete help for adopting EDI in this sector

(Oliver, 1990).. Now Hong Kong adopted new technology in SME’S sector increased from 575

to 644,there they see only future benefits with expected cost, they careful about their business

what need of its business they will served and execute with easily, and get benefits and they also

made relation with government at the time of need they demand help from government. For

developing countries like in Pakistan they should this technology in small portion of the SME’S

sector and evaluate performance of this system if u getting success and performance better than

old method then you should apply this system on your whole business (Pfeffer and Salancik,

1978).

Different researchers tell to us what are elements we should take on the base we increased

pressure on the SME’S that they show their willing to adopt EDI there (Sutcliffe and Zaheer,

1998). All of these studies about the EDI this was depended on case study techniques; this is a

better and useful way but hypothesis more accurate than. There few problem exist and we can

interpreted to them clearly the reason is the big size of population (Dhanaraj and Parkhe, 2006).

So we should arranged more researches with carefully and practically then we able to generate

valid and accurate statically data. The error was in last researches conducted by different

researches focus globally not only on Asian countries (Park et al., 2002). If the SME’S adopt

ISO in their segments then first priority is future benefits and development of SME’S like the

large industry captured now in the every region of the world, it is possible then when SME’S

have believe in EDI and IS for their businesses, current era if we say this is consist of latest

technology then we can say absolutely right (Gulati and Singh, 1999). If we focus on benefits

and our consideration after adopting the EDI those we can take in future, then the SME’S sector

ready to adopt this technology without any hesitation in their segments(Chwelos;2001).The

benefits of appointing the new technology in SME’S, that you can improved your working

capacity of employees and results of your input will be accurate and exact your cost must be

decreased, and the other hand you can get benefits indirect that your employees communication

rather fast with your customer than in past they have. Many researches done different studies

with the help of variables those relevant to the latest technology and it was improving with the

passage of time (Premkumar; Ramamurthy; 1997).Furthermore two experts done a research

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about the latest technology that different values and advantages are attached with adopting EDI

in SME’ sector, So they can insist to entrepreneurial that they take interest in new and latest

technology (Moove; Benbasat; 1996).

A expert build a structure for adopting new technology about information and data collecting in

SME’S, in which he focused only on expecting benefits after adopt this system any SME can get

from the system it is consist of latest technology, So the SME’S owners and managers want to

improve this sector they should introduce in every department IS ,due to this all departments

works better than old methods they can share information and discuss every matter when they

want to do share or having need for it. Therefore, the entrepreneurial thinking about it in Asian

country seeing its expecting advantages and benefits those are linked with every new

technology(Chwelos ;2001).If you will accept this system in your small and medium enterprises

then you’re working process will be enhance by functionally and cost will decreases. If goals

multiple in any SME’S then you have to work on multiple direction for completed and achieve to

them, So for multiple direction the company should adopted innovation or new technology. The

multiple goals force to them that they hire different people in their SME’S, So for handle

different goals in every department they need latest technology for completed every single task

accomplished .If in chain of departments single department not use latest technology, then it can

impacted badly on overall performance of that act we organized for achieving goals. The

selection of IT must be moveable and ease to use for employees(Gani; 1992).Because the new

technology will be more feasible and ease to adopted, if the SME’S performing multiple goals,

and every goal need different tool for completing its function. An expert deeply done a research

about the multiple goals set by SME’S till to end (Harris; 1999), we have concern about the

different aspects of advantages in future we can get in SME’S.

2.4 Entrepreneurship skills:

The different researches say ,in SME’S an unavoidable able

error is lack of managements expertise skills for managing many significant process there, due to

insufficient skills for managing different functions executing in this sector(APEC, 1999). If the

department in SME’S not running by experts people, those can’t see beyond the future and not

able to diagnostic harsh problem for the health of SME’S in Pakistan, then how this segment can

developing there with healthy environment. For running every department we need experienced

and expertise people .In Pakistan the recruitment system of many large and SME’S not like

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developed countries (Tambunan, 2009), where every employee do the job according to its

qualification not other differ department, but there we see opposite situation a financial qualified

person doing the job in HR department and a marketing specialized person is doing in finance

department, then how this firm can work properly. So removing these wrong recruitments

stopped by an expert manager and entrepreneurial in SME’S not that person who not knows

about it (Syahrir, 1986; Rusdillah, 1987).

The entrepreneurial involvement in management decision a reason mismanagement in SME’S

,because mostly the owners of SME’S has no internal knowledge but they interrupt and shows

their ownership and authority, then the balance of this sector going to loss. The entrepreneurial

have must information and knowledge about the SME’S, how they can executing to this in

effective way, if they have knowledge for SME’S then make useful and exact plans for this

sector and can implement very well(Manning, 1998; Oey, 1998). So after this the run plans and

set direction for achieving all task and goals they made in the start, the key of success in now

days in SME’S sector that is every owner and quiet his down another person his involvement not

limited in this sector griped sufficient skills for controlling management in good way

here(Temtime;2001).A expert manager has ability to collect data about target market or any plan

,after it he evaluate deeply to this, and will take analysis with critical sight then he organized any

plan and policy after this process, so chances of failure of this plan enough low (TAF, 2001). If

we take view of different research then we can observed the entrepreneurial have not significant

knowledge related to management in SME’S they only invested money into it. They use and

appoint immediate policies and plan, they not made any contingency plan for achieving

goals(Temtime;2002),so results not regarding to expectation, the lack of expertise and

experienced .Some suggestions given by experts to the entrepreneurial those plan’s ratio is

252,in which they were giving counsels to entrepreneurial that you should make different

policies for internal stockholder like employees, and second policies you separately prepare for

external stakeholder only, Therefore different policies for internal and external then you can

easily executing your plans that you made for achieving goals for maximizing your

profits(Loecher, 2000).

The lack of expertise skills in this sector’s head of department, so they take much time to solve

these problems those are not enough complex problems regarding to time taking by the heads

(Krake, 2005; Storey, 1997; Wynarcyk et al., 1993). Such owners or manager not execute and

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runs their small and medium enterprises in smooth way like a qualified and experienced manager

can handle problems in this sector with good way (Carson and Cromie, 1990). Different

techniques and tools can handle and reduced the chances of failure in the small and medium

enterprises, the manager should to knows these techniques then the government providing to him

opportunity for learning these skills, and established institute where from they learn new and

latest knowledge about runs the small and medium enterprises with confidence in this sector. A

entrepreneurial and manager of the SME’S can make its firm more developed and good through

making good relation with internal and external stakeholder for long term. In Pakistan the small

and medium enterprises are facing many issues like the HR and second one is poor infrastructure

of SME’S, if HR department is sharp and qualified then all recruitment will on the merit and then

every employee do the job on right time on right place Mason (1996, p. 91).

In Pakistan we have need of such people who hard working, risk taker, immediate decision

maker and ability to lead the people with good confidence this is issue for entrepreneurial and for

manager hiring the new personnel in small and medium enterprises(Aldrich; Langton;1997).This

is understood thing if the entrepreneurial and managers are skilled then they monitor to all

employees and also say to head of departments, that they evaluate performance of their

coordinates and report to him about all activities of personals(Patton, 2002; Robson, 2002). The

entrepreneurial can take lot of benefits if they participate in different training relevant to the

small and medium enterprises and can handle their employees in good way (Boyatzis, 1998;

Strauss and Corbin, 1998). A skilled full entrepreneurial can recruit employees effectively and

do the job as an institution for them, so if employees will be qualified and skilled full then take

interest in innovation and hardworking toward the attaining the goals set by its owners and

managers (Miles and Huberman, 2002). They follow the policies made by expert management

and focus on their jobs with good passion, if all process of production works in right direction

then the results of outputs positive and profits will be increases and cost going to reduced, when

cost is reduce then you have an opportunity for conducting training for your employees through

to this performance of themselves will be improved for future (Carney, 1990). The expert

entrepreneurial try to see target market with deeply and checkout its environment, then they

makes policies for attaining goals (Bazeley and Richards, 2000; Flick, 2006; Gibbs, 2002).

Recently, interest in supporting women’s entrepreneurship has increased among policy makers,

academics, and practitioners in Indonesia (Boyatzis, 1998). This interest comes from the

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recognition that women’s entrepreneurship, especially in rural areas, will contribute to the

creation of new rural enterprises that will increase local capabilities to generate economic growth

(Tambunan, 2009).

Statistics from the National Agency for Statistics for various years indicate that women

entrepreneurs in Indonesia, especially in SMEs, have increased since the 1980s, when the

country achieved rapid economic growth leading to a rapid increase in per capita income. One

contributing factor is the increase of women’s education and the economic pressure women

faced in their households, i.e. they are “pushed” to work to earn extra income (Manning, 1998;

Oey, 1998). This filed critical decision for women because they could not leave home for long

time (Tambunan, 2009). Therefore without her who perform the house activities like make the

food and dusting and main issue who look after the Childs (Tambunan, 2009).The lack of

purchasing power of their husband compelled to them they participate in economic activities and

do the job may they have job enough far away their home (Syahrir, 1986; Rusdillah, 1987).

2.5 Marketing activities in SME’S:

An understood thing is the SME’s have different types in

marketing activities than a sequence of activities executing in many large companies (e.g.

Carson, 1990). All of these activities explained the different attitude and way of thinking

personally by the manager and owner of the SME’s (Brodie et al., 2008; Day, 1998; Kotler,

1991). May be this is showing quite personal & enhance the physically and level of the company

that have been promoted (Sears, 1990).These types of boundaries we can explain like: Lack of

sources like the shortage of time, shortage of finance, low level of skill in specialization in

specific field, the focus of manager and owner in generalists rather than in specific segment, and

use are specific sources of marketing in small place and insufficient awareness about marketing

(Axelsson and Easton, 1992; Berry, 1995; Coviello et al., 2001; Gro¨nroos, 1996; Hakansson,

1982). Further the way of marketing in SME’s can take turn according to situation and position

than a formal way of decision making, the reason of this turn the method of decision making of

entrepreneurial personally and in depended like a partnership business do (Piercy and Cravens,

1995), this is quiet personally and seeing first preferences then any decision made by owner of

the business (Scase and Goffee, 1980).

The SME’s is not adopting theoretical guideline for executing marketing activities in their

business. In SME’s the use of network shows different type of “network” are using in this

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segment (Carson, 1990; Loecher, 2000). The personal interest existing in this “network” then the

limits of network consist on personal relationship (Knoke and Kuklinski, 1982), social networks,

business networks, industry (Andersson and Soderlund, 1988) and marketing networks. But an

important issue is the manager of SME’s how managed these networks and increased outputs

(Curran and Blackburn, 1994). The main purpose of network in every type of business is

achieved to a same goal in future, share information putting efforts together and exchange

technology (Dean et al., 1997). The SME’s mangers some time include the potential customer

and consumers in their networks(Donckels and Lambrecht, 1997), the purpose of this activity

they want to take their opinion for the best business according to customer needs and wants and

expectation for your product in SME’s (Hagel, 1999).

2.6 The Financial resources:

The financial institute focuses on the weak SME’s owner and

those have lack of money for run their small and medium enterprises but they are committed to

pay return money at the right time (Zeller and Sharma, 1998). Few researches (Holcombe, 1995,

Otero and Rhyne, 1994) tell that the way of giving loan on small scale has good effect on the

small and medium enterprises. This interest rates need to be much higher so that the financial

institution’s revenue can cover the total expenditure (Carson and Cromie, 1990; Gilmore et al.,

2001; Mount et al., 1993; Schollhammer and Kuriloff, 1979). The payback money by clients and

charged expense by institutions against the using money enough sufficient through to this they

able to overcome on their expenses they have been beard at the time of giving the loan (Hulme

and Mosley, 1996).Through the charged in the shape of interest a financial help (Robinson,

2003). Advantages are getting from the community the customer’s replaced with large expenses

paid by them instead of interest (Rosenberg, 1996). So the customer should be enough trained

having good expertise for making products in an effective way and can control their activities

toward the target markets, and used the means of finance they got from financial institution in a

beneficial way (Bennett, 1994). Through providing finance support and loan to poor

entrepreneurs they can corrections the system of small and medium enterprises with the help of

payment they took from financial institutions and bring change in IT system and especially they

could used for bringing new technology in agriculture segments (Hiedhues, 1995).

Main purpose of the financial support is modify and increased the way of producing in positive

way, and give help to the small and medium enterprise’s owners before to this the large financial

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institution not giving to them this type of credit Navajas et al, (2000) . Buckley (1997) said and

gives advice, if you want to get more improvements in SME’s then you should have consistency

in this program and enhancing the loan for them. Zeller and Sharma (1998) both said that the

small and informal loan could make better and strong this segment, and could decreased the

poverty, infer to them this facility make their future bright and safe in the reasonable perspective.

Berger (1989) identifies the informal and small loan bring stability in their business activities

instead of enhancing the living hood of them, and give large opportunities for the jobs.

To give authority and rewards also help to become successful of an innovative firm (Chandler et

al., 2000).Competitive structure and strategic orientation are help to find the performance of a

firm that uses innovation and the firms which use risky strategies (Salavou et al., 2004). The

activities such as; market analysis, vision improvement, risk taking, strategic orientation,

acquisition of knowledge, networking, financial commitment, research & development and uses

of new technology which are adopted by innovative SMEs, included in innovative activities.

Pakistan is full of natural resources but mismanagement of government and non-government

authorities, lack of new technology adoption, negligence to pay attention in natural resources and

political instability are the reasons of poor performance of SMEs in Pakistan (Salavou et al.,

2004).

Innovation firms use product, process, marketing and organizational innovation but mostly focus

on process innovation. These types of SMEs give high priority to process innovation and give

low priority to product innovation (Chandler et al., 2000). Due to complexity and innovation

process the measure of performance to compute the innovation is too much difficult (Parker et

al., 2010). To eliminate this complexity OSLO-Mannual (2005) define innovative SMEs are, the

firms and its processes improve under a specific period of time, which take review by adopting

new technology. According to OSLO-Mannual (2005) the technological, organizational,

financial, commercial and scientific activities which we done for innovation, called the

innovative activities. Networking and benchmarking also include in this type of activities

(Terziovski, 2003; Massa and Testa, 2004).

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Chapter No. 3

Methodology

3.1 Introduction:

This chapter covers all the steps involved in the completion of the research

from research design to the final report of the research, including data collection, Sample size

and area, setting of the questionnaire, setting of the hypothesis. First of all, this chapter will

identify the research nature. Then, conceptual framework will be presented. Thirdly, set up of the

research hypothesis will be displayed. Fourthly, designing of the questionnaire will be presented,

then, data collection process will be explained.

3.2 Research Design:

Research design involves the nature of the research, type of investigation

etc. This research used both descriptive research and quantitative research.

3.2.1 Nature of the Research:

This research is conducted with a combination of Descriptive and

quantitative research to measure the performance of the SME’s in the Southern Punjab.

Descriptive research is used to gain preliminary knowledge and literature about the study and for

better understanding of the research topic. Quantitative research is used to determine the

response of the respondent towards the variables of this study.

3.2.2 Descriptive Research:

In the descriptive research, it attempts to measure the performance

of the SME”s In the Southern Punjab. For the research, the preliminary literature about the

research topic is collected through different articles, academic journals, books, etc. to define the

research topic better and to develop an approach to research topic and interpreting the primary

data better. It will help to provide the necessary knowledge and secondary data to the research.

3.2.3 Quantitative Research:

Quantitative research is also used in the research. This was

necessary to collect response in measureable units. Questionnaires are used for the collection of

quantitative data of consumer to check the impact of independent variables on the dependent

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variable in Punjab, Pakistan. This will help to provide facts and estimation that will help to

accurately predict the relationship of independent and dependent variables. Details about the

setting and design of the Questionnaire will be discussed in this chapter later.

3.2.4 Type of the Investigation:

This research is a Causal Research as this research attempt to

examine the influence of the independent variables on the dependent variable the performance of the

SME”s in Pakistan.

3.3 Theoretical Frame-Work:

Organizational

Learning

Marketing

Activities

Technological

Innovation

Financial

Factors

Performance

of the

SME’s

Entrepreneurial

Skills

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3.4 Generating the Hypothesis:

H1: The organizational innovation has positive relation with the performance of the SME’s.

H2: The skilled management and entrepreneurial has positive relation with the SME’s

performance.

H3: The technological innovation has positive and useful relation with the performance of the

SME’s.

H4: The marketing activities have positive relation in the perspective to enhance the awareness

of customer about the SME’s segment.

H5: The financial factors have positive relation with the SME’s performance.

H6: There is the positive relationship between the technological innovation and the marketing

activities.

H7: There is the positive relationship between the marketing activities and the learning

organization.

3.5 Questionnaire Survey:

A questionnaire is a set of different questions that can achieve the

needed information and evidences from the respondent for the research purpose. The

requirements and needs of the research are translated into a set of particular questions. These

questions should be easy to read and understand and respondent should will to answer it.

3.5.1 Questionnaire Design:

For this research, structured questions with Scale were used for

data collection. This was necessary to get a specific type of response format that will easy for

analysis. Before distribution of the questionnaire to respondents, a pilot test having sample of 30

respondents was held to check the accuracy and reliability of the questionnaire.

3.5.2 Questionnaire Details:

The formation of the questionnaire is divided into 6 different parts

to achieve needed information form the respondent. This information includes such type of

responses from respondents which will help in measuring the effectiveness of social media

marketing. This information will also explore the difference of demographic information towards

the variable such as gender response difference towards variable or other demographic

information such as age and education level toward the variables.

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3.5.2.1 Part First (Marketing Innovation):

The questions of the marketing innovation are taken

from the article “Effects of Innovation Types on Firm Performance: an Empirical Study on

Pakistan’s Manufacturing Sector” by the Naidoo (2010) for measuring the results of the study.

3.5.2.2 Part Second (Organizational Learning):

The questions of the marketing innovation

are taken from the article “Effects of Innovation Types on Firm Performance: an Empirical

Study on Pakistan’s Manufacturing Sector” by the Calantone et al. (2002) for measuring the

results.

3.5.2.3 Part Third (Technological Innovation):

The questions of the technological

innovation are taken from the article “Effects of Innovation Types on Firm Performance: an

Empirical Study on Pakistan’s Manufacturing Sector” by the Huang & Liu (2005) for

measurement of the results.

3.5.2.4 Fourth Part (Financial Factors):

The questions of the financial factors are taken from

the article “Impact of the organizational learning and the innovation of performance” by the

Camisón & Villar-López (2012) for the measurement of the results.

3.5.2.5 Fifth Part (Entrepreneurial Skills):

The questions of the entrepreneurial skills are taken

from the article “Impact of the organizational learning and the innovation of performance”

by the Sok & O’ Cass (2011) for the measurement of the results.

3.5.2.6 Sixth Part (Performance of the SME’s):

The questions of the performance of the

SME’s are taken from the article “Impact of the organizational learning and the innovation

of performance” by the Baer & Frese (2003) for the measurement of the results.

3.5.3 Measurement and Scaling:

The 5 points Liker scale is used for the questionnaire as

shown in table 3.2. The respondents were told to select the extent of how much they agree or

disagree with the statements for the similar variable that was made in the questionnaire.

Strongly Disagree 1 Disagree 2 Neutral 3 Agree 4 Strongly Agree 5

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3.6 Population and Sampling:

3.6.1 Population:

The population for this study the SME’s of the Southern area of the Punjab

which is in the total number. This is the size of the total population from which we target the 20

SME’s from the different cities.

3.6.2 Sampling:

Sample Size:

We take the sample of the 250.

Sampling Technique:

We follow the probability sampling design by using simple

random sampling. Simple random sampling is also known as unrestricted probability sampling

design. In this sampling every element in the population has a known and equal chance of being

selected as a subject.

3.6.3 Unit of the Analysis:

The respondents who fill-out the questionnaire are the unit of the

analysis in this study the unit of the analysis are the employees of the SME’s who have different

kind of the age level and have the different experience in SME’s.

3.6.4 Study Setting:

This research is field investigation because we are working in a natural

environment. This is not a 100 percent controlled study because there are many factors that may

affect our study commonly known as “Nuisance Variable”.

3.7 Data Entry and analysis techniques:

Data is collected within 7 days from May 29, 2015

to 4 May, 2015. The data is collected with the help of friends. After data collection, Data is

entered into the IBM Statistical Package of Social Science (SPSS) for Windows V 20.0.0. Many

techniques are used for analysis, such as Reliability statistics, Descriptive statistics, Pearson

Correlation, Independent Sample t test, One Way ANOVA and Regression Analysis technique.

All these techniques are helpful to reach the objectives of the research which are helpful to

understand effect of the different factors on the performance of the SME’s.

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Chapter No. 4

Results and Analysis

4.1 Reliability Analysis:

Cronbach alpha is used to find out the internal consistency of

variables. A generally accepted rule is that α ≥ 0.9 refers to Excellent (High stakes testing), 0.8 ≤

α ≤ 0.9 refers to Good (Low Stakes testing), 0.7 ≤ α ≤ 0.8 refers to Acceptable (Surveys), 0.6 ≤ α

≤ 0.7 refers to Questionable, 0.5 ≤ α ≤ 0.6 refers to poor while α ≤ 0.5 is unacceptable.

Table 1.0

Variable Name Croanch Alpha No. of items

Organizational Learning 0.976 6

Marketing Activities 0.957 4

Technological Innovation 0.957 4

Financial factors 0.943 4

Entrepreneurial Skills 0.975 7

SME’s performance 0.976 7

Total 0.994 32

Explanation:

Organization Learning:

The above table 1.0 shows that the value of the Croanch Alpha for the

variable is (0.976) which means the reliability and validity of the questions related to the variable

organizational learning is high and these questions can be used for the future purpose.

Marketing Activities:


variable marketing is (0.957) and it means the questions related to the marketing activities is

reliable and valid because the value of the Alpha lies in the acceptable range.

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Technological Innovation:

The above table 1.0 shows that the value of the Croanch Alpha for

the variable marketing is (0.957) and it means the questions related to the technological

innovation is reliable and valid because the value of the Alpha lies in the acceptable range.

Financial Factors:


variable financial factors is (0.943) and it means the questions related to the financial factors are

reliable and valid because the value of the Alpha lies in the acceptable range.

Entrepreneurial Skills:


variable entrepreneurial skills are (0.975) and it means the questions related to the

entrepreneurial skills are reliable and valid because the value of the Alpha lies in the acceptable

range.

SME’s Performance:


variable SME’s performance is (0.976) and it means the questions related to the SME’s

performance are reliable and valid because the value of the Alpha lies in the acceptable range.

4.2 Descriptive Statistics:

The descriptive statistics tell you that where the respondent lays

your research and this analysis also tells you that the reliability of the whole data. This analysis

also tells you both the data lies in the acceptable region normally we set a standard of the

questions, answers and this is also known as the “Allowable Error”. The first is the mean value

which shows that the response of the respondents the value more closer to the 4 means that the

respondents are agree with the questions and the value closer to the 2 which means that the

respondents are disagree with the questions and the next is the standard error and the value

exceeds from the (0.05) or the 5% means that the theirs is error among the questions and the last

is the standard deviation the more value closer to the 1 means respondents have the different

kinds of the responses towards the variable and that means that the respondents gave the

different kinds of the responses towards the different variables.

31 | P a g e

Table 1.1

Descriptive Statistics

N Mean Std. Deviation

Statistic Statistic Std. Error Statistic

Org_L 250 4.7773 .02358 .37279

Mrk_A 250 4.7787 .01928 .30486

Tch_I 250 4.7413 .02083 .32935

Financial_F 250 4.5800 .03157 .49910

E_skills 250 4.7486 .01788 .28277

Performance 250 4.7520 .01808 .28580

Valid N (listwise) 250

Explanation:

Organizational Learning:

The above table 1.1 shows that the value of the mean which is 4.77

it means that the respondents are on the agree side and next value of the standard error which is

the (0.023) it means that the questions related to the organizational learning is reliable and valid

and the next is the standard error whose value is the (0.37) it means that the variation among the

response of the respondents is less.


The above table 1.1 shows that the value of the mean which is 4.77 it

means that the respondents are on the agree side and next value of the standard error which is the

(0.019) it means that the questions related to the marketing activities is reliable and valid and the

next is the standard error whose value is the (0.30) it means that the variation among the



The above table 1.1 shows that the value of the mean which is 4.71

it means that the respondents are on the agree side and next value of the standard error which is

the (0.020) it means that the questions related to the marketing activities is reliable and valid and

the next is the standard error whose value is the (0.32) it means that the variation among the


Financial Factors:



32 | P a g e

(0.031) it means that the questions related to the financial factors is reliable and valid and the



Entrepreneurial skills:



(0.017) it means that the questions related to the entrepreneurial skills is reliable and valid and

the next is the standard error whose value is the (0.28) it means that the variation among the


SME”s Performance:



(0.018) it means that the questions related to the SME’s performance is reliable and valid and the


response of the respondents is less. It means that the questions which we asked from the different

respondents are reliable and valid and these questions can be used for the future purpose.

4.3 Correlation:

The correlational analysis tells the relationship of the different variables

which we include in the research and this also tells us the extent of the relationship either the

relationship is positive, strong positive, negative, strong negative and the no relationship among

the variables. The analysis of the different helps us to reach the desired objectives of the research

and also helps us to prove the hypothesis accepted or rejected.

The below table 1.2 shows the complete details of the correlation which shows that what is the

relationship of the different independent variables with each other. The person correlation value

lies between 0 to +1 and from 0 to -1 the value between the 0 to 0.5 has a moderate positive

relationship with the other variable while the value lies between the 0.5 and +1 has a strong

positive relationship with the other variable and the value lies between the 0 to -0.5 have the

moderate negative relationship and the value lies between the -0.5 to -1 have the strong negative

relationship with the other variables.

33 | P a g e

Table 1.2

Correlations

Org_L Mrk_A Tch_I Financial_F E_skills Performance

Org_L

Pearson Correlation 1 .615** .649

** .236

** .576

** .583

**

Sig. (2-tailed) .000 .000 .000 .000 .000

N 250 250 250 250 250 250

Mrk_A

Pearson Correlation .615** 1 .630

** .339

** .737

** .728

**

Sig. (2-tailed) .000 .000 .000 .000 .000

N 250 250 250 250 250 250

Tch_I

Pearson Correlation .649** .630

** 1 .359

** .612

** .625

**

Sig. (2-tailed) .000 .000 .000 .000 .000

N 250 250 250 250 250 250

Financial_F


** .359

** 1 .424

** .402

**

Sig. (2-tailed) .000 .000 .000 .000 .000

N 250 250 250 250 250 250

E_skills


** .612

** .424

** 1 .744

**

Sig. (2-tailed) .000 .000 .000 .000 .000

N 250 250 250 250 250 250

Performance


** .625

** .402

** .744

** 1

Sig. (2-tailed) .000 .000 .000 .000 .000

N 250 250 250 250 250 250

**. Correlation is significant at the 0.01 level (2-tailed).


The above table 1.2 shows that the organizational learning has the

strong positive relationship with the marketing activities and the relationship value is the (0.615)

at the level of the significance 95%. The second variable is the technological innovation which

also has the strong positive relationship with the organizational learning and the relationship

value is the (0.649) at the level of the significance 95%. The third variable is the financial factors

which have the moderate positive relationship with the organizational learning and the

relationship value is the (0.236) at the level of the significance 95%. The fourth variable is the

entrepreneurial skills which have the strong positive relationship with the organizational learning

and the relationship value between these two variables is the (0.576) at the level of the

significance 95%. The last variable is the SME’ performance which has the strong positive

relationship with the organizational learning and the relationship value is the (0.583) at the level

of the significance 95%.

34 | P a g e


The above table 1.2 shows the relationship of the marketing activities and

technological innovation and the relationship between these two variables is strong positive and

the relationship value between these variables is the (0.630) at the level of the significance 95%.

The second is the relationship between marketing activities and the financial factors are

moderate positive and the relationship value is the (0.339) at the level of the significance 95%.

The third is the relationship of the marketing activities and the entrepreneurial skills and the

above table shows that the strong positive relationship is present between these two variables and

the relationship value between these two variables is the (0.737) at the level of the significance

95%. The last is the relationship of the marketing activities and the SME’s performance and the

above table shows that the strong positive relationship present between these two variables and

the relationship value is the (0.728) at the level of the significance 95%.


The above table 1.2 shows the relationship between the

technological innovation and the financial factors and the above the above table shows that the

moderate positive relationship between these two variables and the relationship value is the

(0.359) at the level of the significance 95%. The second is the relationship between the

technological innovation and the entrepreneurial skills and the according to the above table the

strong positive relationship is present between these two variables and the relationship value is

the relationship value is the (0.612) at the level of the significance 95%. The third is the

relationship between the technological innovation and the SME”s performance and the above

table shows that the strong positive relationship present between these two variables and the

relationship value is the (0.625) at the level of the significance 95%.

Financial Factors:

The above table 1.2 shows the financial factors with the different variables

first is the relationship of the financial factors and the entrepreneurial skills and the above table

shows the moderate positive relationship is present between these two variables and the

relationship value is the (0.424) at the level of the significance 95%. The last is the relationship

of the financial factors and the SME”s performance and the according to the above table the

relationship between these two variables are moderate positive and the relationship value is the

(0.402) at the level of the significance 95%.

35 | P a g e


The last is the relationship between the entrepreneurial skills and the

SME’s performance and the above table shows that the strong positive relationship is present

between these two variables and the relationship value is the (0.744) at the level of the

significance 95%.

4.4 One Way ANOVA:

The one way ANOVA is used when we have the groups more than

2 and the explanation of the ANOVA as the independent t-test this one way ANOVA can be

interpreted by seeing the significance value and the this value tells us that either the different

groups have the same responses towards the particular level or not.

4.4.1 One Way ANOVA (Age Group):

The one way ANOVA for the age group is available in

the table 2.1 which has the different values and all these values explains the either the difference

lies among the group or not and the confidence interval is 95%. The categories as follows:

18-25 years

25-32 years

32-40 years

Above than 40 years

These are the different age groups of the different respondents we need to analyze the response

of these respondents. The standard values of significance (0.05) if the value above than the

significance than the same response is present otherwise the difference in the response.

Organizational learning:

The below table 1.3 shows that the respondents from the different age

groups have the same kind of the response above the organizational learning because the value of

the significance (0.955) is above than the (0.05) at the level of the significance 95% which means

that the same kind of the response is present between the different age groups.


The below table 1.3 shows that the respondents from the different age

groups have the same kind of the response above the marketing activities because the value of

36 | P a g e



Table 1.3

ANOVA (age)

Sum of Squares df Mean Square F Sig.

Org_L

Between Groups .013 2 .006 .046 .955

Within Groups 34.592 247 .140

Total 34.605 249

Mrk_A

Between Groups .047 2 .024 .253 .777


Total 23.142 249

Tch_I

Between Groups .120 2 .060 .551 .577


Total 27.009 249

Financial_F

Between Groups .194 2 .097 .387 .679


Total 62.025 249

E_skills

Between Groups .049 2 .025 .307 .736


Total 19.910 249

Performance

Between Groups .027 2 .013 .162 .851


Total 20.338 249


The above table 1.3 shows that the respondents from the different

age groups have the same kind of the response above the technological innovation because the

value of the significance (0.557) is above than the (0.05) at the level of the significance 95%

which means that the same kind of the response is present between the different age groups.

Financial Factors:

The above table 1.3 shows that the respondents from the different age

groups have the same kind of the response above the financial factors because the value of the

significance (0.679) is above than the (0.05) at the level of the significance 95% which means


37 | P a g e



groups have the same kind of the response above the entrepreneurial skills because the value of





groups have the same kind of the response above the SME’s performance because the value of



4.4.2 One Way ANOVA (Industry Wise):

The next One Way ANOVA is to check the response

of the industry wise that either employee of the different SME’s have the same response or not

about the different variables. We consider the four groups for this purpose:

Rice Mills

Flour Mills

Cotton Mills

Ice Mills

These are the employees belongs to different industry groups of the different respondents we

need to analyze the response of these respondents. The standard values of significance (0.05) if

the value above than the significance than the same response is present otherwise the difference

in the response.


The above table 1.4 shows that the employees from the different

industries have the same kind of the response because the value of the significance (0.001) less

than the (0.05) at the level of the significance 95% is means that the different kind of the

response is present between the groups. Through the use of the standard value the response of the

different respondents is analyzed and through this the different research objectives which made

earlier is achieved.

38 | P a g e

Table 1.4

ANOVA(Industry)

Sum of Squares Df Mean Square F Sig.

Org_L

Between Groups 2.151 3 .717 5.434 .001


Total 34.605 249

Mrk_A

Between Groups 1.378 3 .459 5.191 .002


Total 23.142 249

Tch_I

Between Groups 2.084 3 .695 6.855 .000


Total 27.009 249

Financial_F

Between Groups 5.044 3 1.681 7.258 .000


Total 62.025 249

E_skills

Between Groups 1.023 3 .341 4.439 .005


Total 19.910 249

Performance

Between Groups 1.555 3 .518 6.789 .000


Total 20.338 249


The above table 1.4 shows that the employees from the different industries

have the same kind of the response because the value of the significance (0.002) less than the

(0.05) at the level of the significance 95% is means that the different kind of the response is

present between the groups.


The above table 1.4 shows that the employees from the different

industries have the same kind of the response because the value of the significance (0.000) less

than the (0.05) at the level of the significance 95% is means that the different kind of the

response is present between the groups.

Financial Factors:



39 | P a g e













4.4.3 One Way ANOVA (Education Wise):

This One Way ANOVA is used to know the

response of the respondents who have the different level of the education. The different

education level of the respondents is as follows:

Metric

Intermediate

Graduate

Masters

These are the employees belongs to different level of the education of the different we need to

analyze the response of these respondents. The standard values of significance (0.05) if the value

above than the significance than the same response is present otherwise the difference in the

response.



level of the education have the different kind of response towards the organizational learning and

this is because of the fact that the value of the significance is (0.000) is less than the (0.05) at the

level of the significance 95% that’s why the different is response of the respondents is present

between these groups.

40 | P a g e

Table 1.5

ANOVA (Education Level)


Org_L

Between Groups 3.289 2 1.644 12.970 .000


Total 34.605 249

Mrk_A

Between Groups 1.653 2 .827 9.502 .000


Total 23.142 249

Tch_I

Between Groups 2.296 2 1.148 11.473 .000


Total 27.009 249

Financial_F

Between Groups .142 2 .071 .283 .754


Total 62.025 249

E_skills

Between Groups .963 2 .482 6.278 .002


Total 19.910 249

Performance

Between Groups 1.433 2 .716 9.359 .000


Total 20.338 249


The above table 1.5 shows that the respondents from the different level of

the education have the different kind of response towards the marketing activities and this is

because of the fact that the value of the significance is (0.000) is less than the (0.05) at the level

of the significance 95% that’s why the different is response of the respondents is present between

these groups.



level of the education have the different kind of response towards the technological innovation

and this is because of the fact that the value of the significance is (0.000) is less than the (0.05) at

the level of the significance 95% that’s why the different is response of the respondents is

present between these groups.

41 | P a g e

Financial Factors:


the education have the same kind of response towards the financial factors and this is because of

the fact that the value of the significance is (0.754) is greater than the (0.05) at the level of the

significance 95% that’s why the different is response of the respondents is present between these

groups.



the education have the different kind of response towards the entrepreneurial skills and this is



these groups.



the education have the different kind of response towards the SME’s performance and this is



these groups.

4.4.4One Way ANOVA (Annual Turnover):

The next One Way ANOVA is used to analyze the

response of the different employees which are working in different annual turnover. The groups

of the different annual turnover are as follows:

1-1.5 Million

1.5-2 Million

2-2.5 Million

Above than 2.5 Million

These are the employees belongs to different industry which has different annual turnover of the

different respondents we need to analyze the response of these respondents. The standard values

of significance (0.05) if the value above than the significance than the same response is present

otherwise the difference in the response.

42 | P a g e

Table 1.6

ANOVA (Annual Turnover)


Org_L

Between Groups 6.862 3 2.287 20.282 .000


Total 34.605 249

Mrk_A

Between Groups 4.837 3 1.612 21.666 .000


Total 23.142 249

Tch_I

Between Groups 6.035 3 2.012 23.596 .000


Total 27.009 249

Financial_F

Between Groups 8.074 3 2.691 12.271 .000


Total 62.025 249

E_skills

Between Groups 3.761 3 1.254 19.095 .000


Total 19.910 249

Performance

Between Groups 5.802 3 1.934 32.727 .000


Total 20.338 249


The above table 1.6 shows that the employees of the different

annual turnover SME’s have the different kind of the response about the organizational learning

because the value of the significance is (0.000) which is less than the (0.05) at the level of the

significance 95%. It means that the different kind of the response is present among the

employees of the different annual turnover SME”s.


The above table 1.6 shows that the employees of the different annual

turnover SME’s have the different kind of the response about the marketing activities because

the value of the significance is (0.000) which is less than the (0.05) at the level of the



43 | P a g e


The above table 1.6 shows that the employees of the different

annual turnover SME’s have the different kind of the response about the technological

innovation because the value of the significance is (0.000) which is less than the (0.05) at the

level of the significance 95%. It means that the different kind of the response is present among

the employees of the different annual turnover SME”s.

Financial Factors:


turnover SME’s have the different kind of the response about the financial factors because the

value of the significance is (0.000) which is less than the (0.05) at the level of the significance

95%. It means that the different kind of the response is present among the employees of the

different annual turnover SME”s.



turnover SME’s have the different kind of the response about the entrepreneurial skills because






turnover SME’s have the different kind of the response about the SME’s performance because




4.4.5 One Way ANOVA (Location):

The last One Way ANOVA is used to know the response of

the different respondents who belongs to the different locations. In this study only four different

locations is targeted and employees of that cities fill-out the questionnaire and we need to

analyze the response of the different respondents. The four different cities which are the part of

the research are as follows:

44 | P a g e

Bahawalnagar

Michanabad

Chistian

Faisalabad

Table 1.7

ANOVA (Location)

Sum of Squares df Mean Square F Sig.

Org_L

Between Groups 7.040 3 2.347 20.943 .000


Total 34.605 249

Mrk_A

Between Groups 5.055 3 1.685 22.916 .000


Total 23.142 249

Tch_I

Between Groups 5.947 3 1.982 23.153 .000


Total 27.009 249

Financial_F

Between Groups 17.247 3 5.749 31.584 .000


Total 62.025 249

E_skills

Between Groups 4.502 3 1.501 23.960 .000


Total 19.910 249

Performance

Between Groups 5.255 3 1.752 28.571 .000


Total 20.338 249


The above table 1.7 shows that value of the significance for the

variable organizational learning is (0.000) which is less than the (0.05) at the level of the

significance 95%. It means the respondents from the different cities have the different kind of the

organizational learning.



variable marketing activities are (0.000) which is less than the (0.05) at the level of the


marketing activities.

45 | P a g e



variable technological innovation is (0.000) which is less than the (0.05) at the level of the


technological innovation.

Financial Factors:

The above table 1.7 shows that value of the significance for the variable

financial factors is (0.000) which is less than the (0.05) at the level of the significance 95%. It

means the respondents from the different cities have the different kind of the financial factors.



entrepreneurial skills is (0.000) which is less than the (0.05) at the level of the significance 95%.

It means the respondents from the different cities have the different kind of the entrepreneurial

skills.



SME’s performance is (0.000) which is less than the (0.05) at the level of the significance 95%.

It means the respondents from the different cities have the different kind of the SME’s

performance.

4.5 Independent Sample T test:

The independent t test is used to know the response of the

respondents which are classify the two groups like male and female. The value of the

significance is standard to analyze the response of the different respondents like if the value of

the significance is less than standard which is the (0.05) than the male and female have the

different kind of the about the different variables similarly if the value of the significance is

greater than the standard (0.05) than the male and female have the same kind of the response

about the different variables. The below is the tables one table shows the response of the male

and female about the different variables that either they are on the agree stage and the standard

error and the standard deviation which shows that the reliability and validity of the questionnaire

that the questionnaire can be used for the future purpose or not.

46 | P a g e

Table 1.8

Group Statistics

The gender of the

respondents.

N Mean Std. Deviation Std. Error Mean

Org_L Male 163 4.8691 .24827 .01945

Female 87 4.6054 .49029 .05256

Mrk_A Male 163 4.8569 .21347 .01672

Female 87 4.6322 .38725 .04152

Tch_I Male 163 4.8303 .25908 .02029

Female 87 4.5747 .38019 .04076

Financial_F Male 163 4.6135 .45997 .03603

Female 87 4.5172 .56264 .06032

E_skills Male 163 4.8142 .21066 .01650

Female 87 4.6256 .35279 .03782

Performance Male 163 4.8221 .19251 .01508

Female 87 4.6207 .37407 .04010


The above table 1.8 shows that the male and female both are on the

agree side about the organizational learning variable and the values of the standard deviation and

standard error also lies in the acceptable region which means that the questionnaire is reliable

and valid.


The above table 1.8 shows that the male and female are on the agree side

about the marketing activities variable and the values of the standard error and the standard

deviation lies in the acceptable region which means that the questionnaire is reliable and valid .


The above table 1.8 shows that male and female on the agree side

about the variable technological innovation and the value of standard error and standard

deviation also lies in the acceptable region which means that the questionnaire is reliable and

valid.

Financial Factors:

The above table 1.8 shows that male and female on the agree side about

the variable financial factors and the value of standard error and standard deviation also lies in

the acceptable region which means that the questionnaire is reliable and valid.

47 | P a g e

Entrepreneurial skills:


the variable entrepreneurial skills and the value of standard error and standard deviation also lies

in the acceptable region which means that the questionnaire is reliable and valid.



the variable SME’s performance and the value of standard error and standard deviation also lies

in the acceptable region which means that the questionnaire is reliable and valid.

Independent t test:

The second table shows the response of the male and female about the

different variables like the organizational learning, marketing activities, technological

innovation, financial factors, entrepreneurial skills and the SME’s performance the standard to

know the difference in response of the male and female is the significance value if the value of

the significance is greater than the (0.05) then the same perception of male and female about the

variables and the if the value of the significance is less than (0.05) than the difference in response

is exists among the male and female about the different variables.


The below table 1.9 shows the response of the male and female

about the variables organizational learning according to the above table the male and female

have the different kind of the response about the organizational learning because the value of the

significance is (0.00) is less than the (0.05) at the level of the significance 95%.


The below table 1.9 shows the response of the male and female about the

variables marketing activities according to the above table the male and female have the different

kind of the response about the marketing activities learning because the value of the significance

is (0.00) is less than the (0.05) at the level of the significance 95%.


The below table 1.9 shows the response of the male and female about the

variables technological innovation according to the above table the male and female have the

different kind of the response about the technological innovation because the value of the


48 | P a g e

Table 1.9

Independent Samples Test

Levene's Test

for Equality of

Variances

t-test for Equality of Means

F Sig. t df Sig.

(2-

tailed)

Mean

Difference

Std. Error

Difference

95% Confidence

Interval of the

Difference

Lower Upper

Org_L Equal variances assumed 29.653 .000 5.650 248 .000 .26376 .04668 .17181 .35570

Equal variances not assumed 4.706 110.057 .000 .26376 .05605 .15269 .37483

Mrk_A Equal variances assumed 40.748 .000 5.917 248 .000 .22467 .03797 .14989 .29945


Tch_I Equal variances assumed 18.445 .000 6.279 248 .000 .25555 .04070 .17539 .33572


Financial_F Equal variances assumed 5.434 .021 1.456 248 .147 .09626 .06612 -.03397 .22648

Equal variances not assumed 1.370 148.285 .173 .09626 .07026 -.04259 .23510

E_skills Equal variances assumed 19.769 .000 5.288 248 .000 .18858 .03566 .11834 .25883


Performance Equal variances assumed 26.869 .000 5.624 248 .000 .20140 .03581 .13087 .27192


Financial Factors:

The above table 1.9 shows the response of the male and female about the

variables financial factors according to the above table the male and female have the same kind

of the response about the organizational learning because the value of the significance is (0.173)

is greater than the (0.05) at the level of the significance 95%.



variables entrepreneurial skills according to the above table the male and female have the

different kind of the response about the entrepreneurial skills because the value of the


SME”s Performance:


variables SME’s performance according to the above table the male and female have the

49 | P a g e

different kind of the response about the SME’s performance because the value of the significance

is (0.00) is less than the (0.05) at the level of the significance 95%.

4.6 Regression:

The regression analysis is used to know the relationship between the dependent

and independent variables. Through the use of that analysis we know the most variable which

affect the dependent variables a lot and we can concentrate on that variable and paid the less

attention towards the other variable. The below is the table of the regression which shows the

complete detail about the results.

4.6.1 Model Summary:

The model summary is used to know the importance of the different

variables and also know that how much the dependent variable is affected through the use of the

independent variables. The value of the Durbin Watson shows that the relationship of the

different independent variables and the value of the R square shows the change in the dependent

variables due to the independent variables the higher the value of the R square means that the

variables have so much impact on the dependent variable.

Table 2.0

Model Summaryb

Model R R Square Adjusted R Square Std. Error of the

Estimate

Durbin-Watson

1 .806a .650 .643 .17076 1.632

a. Predictors: (Constant), E_skills, Financial_F, Org_L, Tch_I, Mrk_A

b. Dependent Variable: Performance

Explanation:

The above table 2.0 shows that the value of the Durbin Watson is (1.632) which

means that there is non-auto colinerity among the different variables which mean that the

different doesn’t affect each other. It means that if we increase or decrease the one variable the

other variable is not affected. The value of the R square means that the dependent variable is

65% change due to the independent variables.

50 | P a g e

4.6.2 ANOVA:

The next analysis is used to know that either the model fits statically or not. The

value of the significance if closer to (0.000) then it means that the model which we establish is

statically fits.

Table 2.1

ANOVAa

Model Sum of Squares Df Mean Square F Sig.

1

Regression 13.224 5 2.645 90.704 .000b

Residual 7.115 244 .029

Total 20.338 249

a. Dependent Variable: Performance

b. Predictors: (Constant), E_skills, Financial_F, Org_L, Tch_I, Mrk_A

Explanation:

The above table 2.1 shows that the value of the significance is (0.000) it means

that the model fits statically and the theoretical frame which we established in the Chapter 3

actually exists. So we can further expand the research and include more variables which are not

the part of that research but they can be used in future research. These variables may be the HR

practices and top management involvement in the firms decision making so these different also

affect the performance of the SME’s in Pakistan.

Table 2.2

Coefficientsa

Model Unstandardized Coefficients Standardized

Coefficients

T Sig.

B Std. Error Beta

1

(Constant) .618 .195 3.169 .002

Org_L .067 .041 .087 1.621 .106

Mrk_A .283 .057 .302 4.938 .000

Tch_I .114 .048 .132 2.359 .019

Financial_F .047 .024 .081 1.917 .056

E_skills .360 .061 .356 5.870 .000

a. Dependent Variable: Performance

51 | P a g e


The above table 2.2 shows that the value of the significance for the

variable organizational learning is the (0.106) which is greater than the (0.05) it means that this

variable doesn’t have too much impact on the dependent variable that’s why the value of the beta

is also low which is the (0.087).

Marketing activities:

The above table 2.2 shows that the value of the significance is (0.000) it

means that this variable have so much impact on the dependent variable which is the SME’s

performance and the value of the Beta which is the (0.302) it means that the dependent variable

is so much affected by this variable. So if we want to increase the performance of the SME’s in

Pakistan than we must focus on the marketing activities. It also means that the marketing

activities is important variable to increase the performance of SME’s.


The above table 2.2 shows that the value of the significance is

(0.019) which is less than the (0.05) it means that this variable also has the impact on the

dependent variable which is the SME”s performance and the Beta value for the variable is

(0.132) it means that only 13% change is due to the technological innovation. So this variable is

important to increase the performance of the SME’s.


The value of the significance for the variable is the (0.000) which is less

than the (0.05) it means that the entrepreneurial skills has the impact on the dependent variable

which is the SME’s performance and the value of the Beta for this variable is (0.356) it means

that the 35% change is occurs due to the entrepreneurial skills of the employees. It means that the

entrepreneurial skill is most factors to increase the performance of SME’s in Pakistan.

Financial Factors:

The above table 2.2 shows that the financial factors are also the important

variable to increase the performance of the SME’s. The value of the significance for the variable

financial factors is (0.056) which this variable has some sort of the impact on the SME’s

performance and the Beta value is (0.081) which shows that the 8% change occur through

financial factors.

52 | P a g e

Chapter No. 5

Conclusion Limitations and Implications

5.1. Conclusion:

The research is conducted to know the response of those factors that affect

the SME’s performance is Pakistan. According to above analysis it is proved that the different

variables which are the part of the research like the organizational learning, marketing activities,

technological innovation, financial factors and the entrepreneurial skills all these factors affect

the performance of the SME’s in Pakistan. The regression analysis is also tells us that the most

important variable in the research is the entrepreneurial skills which clearly means that those

SME’s which adopt new and methods of innovation and which take the risky decision they

automatically increase their performance in competition. The next important variable of the

research is the marketing activities which affect the performance of the SME’s in Pakistan. It

means if we want to increase the performance of SME’s and we don’t afford to take the risky

decisions then we must go with the marketing activities and make the marketers efficient and

delegated towards their jobs. The research main objective knows those factors which affect the

SME’s performance in Pakistan and this objective is achieved through the above analysis.

The next important part of the research is that the SME’s shows a great contribution in the

growth of the country the more the SME’s performance high the more the chances that the

country grows in the respect of economically. The study shows that because of the different

factors we can easily increase the performance of the SME’s in Pakistan. The other main

objective of the research is to know the relationship of the different independent variables and

the research proves that the different independent variables have the strong or moderate positive

relationship with each other. It means that the different variables which are the part of that

research cannot be ignored in the future because these variables are the important part of the

research but only the one variable which is organizational learning become the part of the

research because the regression analysis shows that this variable is not have much impact of the

dependent variable which is the SME’s performance is Pakistan. We also carefully understand

the impact of the other variables on the dependent variable which is the SME’s performance in

Pakistan and through the use of the regression analysis we also know the importance of that

variable in performance of SME’s.

53 | P a g e

5.2. Limitations:

Due to some reasons some limitations exist in the research. These

limitations are as follow:

According to the economies of Pakistan (2005) total (0.16) million SMEs are working in whole

Pakistan. Major portion are exist at Punjab. But I collect data only from the (90) respondents of

thirty SMEs.

Simply prepared the questionnaire and collect the data from SMEs and by using the SPSS

analyze the whole data. I can’t see or take data actually from the financial statements of the

respondents SMEs.

Under a specific period of time I conduct this research and I can’t take the data from the SMEs in

whole Punjab. I get data only from some districts of Punjab.

Due to scarcity of resource the SMEs can’t hire the educated and skills employees. Therefor

most of persons whose from I get the data not are higher educated persons.

The people of SMEs feel fear when an unknown person asks the question about the progress of

their SMEs. They feel hesitation to give true answer about their current progress and about the

new installments if any exist.

5.3 Future Implications:

The future implications which means that in future this research

continues in some respective are as follows:

The dependent variable is only changes to the 67% due to the effect of the different independent

factors involved in this research so if include other variables like HR activities, and top

management collaboration than the performance of the SME’s in Pakistan.

The targeted cities for the purpose of the data collection belongs to the lower level cities which

doesn’t gave the accurate results about the research because in the lower cities less educated

persons is in good position in the SME so they cannot gave the accurate response towards the

study.

If anyone wants to carry the same topic in the future than they can choose the top management

response only because they are more educated and they can give the right response about the

SME.

The last implication is that the study only follows the primary methods for the analysis and if we

include the secondary data in the research then the response may be changed.

54 | P a g e

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Appendix

Dear respondents, I am the student of the BBA (The Islamia University of Bahawalpur, Bahawalnagar Campus). My research topic is “The Determinants of SME’s performance in Southern Punjab (Pakistan)”. I will get information to you through to this questionnaire and this data will be used only for the research purpose. Abbreviations:

S.A = Strongly Agree 5 A = Agree 4 N = Neutral 3 D = Disagree 2 S.D = Strongly Disagree 1

Sr.# Particular S.A A N D S.D

Organizational Learning

1 Higher the learning innovation, higher the firm performance.

5 4 3 2 1

2 Organizational learning positively relates with the firm innovation.

5 4 3 2 1

3 Organizational innovation positive relationship with the firm performance.

5 4 3 2 1

4 External sources (reports, consultants, newsletters, etc.) are extremely important for the operations of our organization.

5 4 3 2 1

5 Our organization has employees whose job is related to searching for external information.

5 4 3 2 1

6 Our competitors are an extremely important source for learning new methods and services.

5 4 3 2 1

Marketing Activities

7 We manage to cope with market demands and develop new products quickly.

5 4 3 2 1

8 We continuously modify design of our products and rapidly enter new emerging markets.

5 4 3 2 1

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9 Most of our marketing decisions are based on exchanging information with those in our personal and professional network.

5 4 3 2 1

10 Evaluating the critical determinants for adopting e-market in Pakistan small-and-medium sized enterprises.

5 4 3 2 1

Technological Innovation

11 Technological changes provide big opportunities in our industry.

5 4 3 2 1

12 A large number of new product ideas have been made possible through technological Breakthroughs in our industry.

5 4 3 2 1

13 The interaction between innovation capital and IT capital has a positive effect on firm performance.

5 4 3 2 1

14 Innovation is perceived as too risky and is resisted.

5 4 3 2 1

Financial Factors

15 This firm has committed resources that can quickly be used to fund new initiatives.

5 4 3 2 1

16

We strongly involve our suppliers in our research and development processes.

5 4 3 2 1

17 We are able to obtain resources at short notice to support new strategic initiatives.

5 4 3 2 1

18 This firm has committed resources that can quickly be used to fund new initiatives.

5 4 3 2 1

Entrepreneurial Skills 19 Innovation proposals are welcome in

the organization. 5 4 3 2 1

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20 Management actively seeks innovative ideas.

5 4 3 2 1

21 Program/Project managers promote and support innovative ideas, experimentation and creative processes.

5 4 3 2 1

22 We deal with customers’ suggestions or complaints urgently and with most care.

5 4 3 2 1

23 In marketing innovations (entering new markets, new pricing methods, new distribution methods, etc.) our company is better than competitors.

5 4 3 2 1

24 Development of new channels for products and services offered by our corporation is an on-going process.

5 4 3 2 1

25 We constantly emphasize and introduce managerial innovations (e.g. computer-based administrative innovations, new employee reward/training schemes, new departments or project teams, etc.).

5 4 3 2 1

SME’s Performance

26 Work organization is efficient. 5 4 3 2 1

27 The number of customer complaints within the last period has decreased strongly.

5 4 3 2 1

28 We deal with customer complaints faster than our competition.

5 4 3 2 1

29 Risk-taking within the company is better than it is by our competitors.

5 4 3 2 1

30 Absenteeism is in our company (relative to competition) very low.

5 4 3 2 1

31 Value added per employee in our company is well above the industry average.

5 4 3 2 1

32 Return on assets (ROA, %) in our company is well below the industry average.

5 4 3 2 1

67 | P a g e

Gender: Male Female Industry: Rice mill Flour mill Cotton mill Ice mill Age: 18-25 25-32 32-40 40 + Education: Metric Intermediate Graduate Master Organizational annual Income: 1-1.5 million 1.5-2 million 2-2.5 million

3 million+ Location (City): _________________________________ Thanks for your cooperation and concentration.

Acknowledgement I Dedication

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