Firm Size
Firm size refers to the measure of a company's magnitude, typically determined by factors such as the number of employees, revenue, or market share. It is a crucial determinant in assessing a company's competitiveness, market influence, and operational capabilities. Understanding firm size is essential for evaluating industry dynamics, market concentration, and the impact of businesses on the economy.
5 Key excerpts on "Firm Size"
eBook - ePub- David J. Storey(Author)
- 2016(Publication Date)
- Routledge(Publisher)
...The same table also makes it clear that a wide variety of different sources of information are used to identify individual small firms – a point to be emphasised in the next section. In summary, there is no uniformly satisfactory definition of a small firm. Nevertheless, the definitions employed by Bolton in 1971 can be seen to be no longer satisfactory, and have been effectively superseded by the EC definitions of a small and medium enterprise (SME), which has less than 500 employees. The value of the definition is that it uses only one criterion – employment – but can be subdivided into three categories – micro, small and medium-sized enterprises. Researchers, however, are likely to have to continue using their own definitions of small enterprises which are appropriate to their particular ‘target’ group. Ultimately, debates about definition turn out to be sterile unless size is shown to be a factor which influences the ‘performance’ of firms. If it were possible to demonstrate that firms below a certain size clearly had a different performance from those above that band, then the definition has real interest. In practice, however, such clear ‘breaks’ are rare, and size appears to be a ‘continuous’ rather than a ‘discrete’ variable. HOW MANY SMALL FIRMS ARE THERE IN THE UNITED KINGDOM? Given the problems identified above in defining a small firm, it is perhaps not surprising that, in the United Kingdom, there is no single definitive statement about the total number of firms in the economy, or the proportion of those which, however defined, could be regarded as small. Part of the reason is a lack of consensus about what constitutes ‘small’. Even more serious, however, is the absence of any single comprehensive data base covering all firms in the UK economy...
eBook - ePubLean Six Sigma for Small and Medium Sized Enterprises
A Practical Guide
- Jiju Antony, S. Vinodh, E. V. Gijo(Authors)
- 2017(Publication Date)
- CRC Press(Publisher)
...chapter one Introduction to small and medium sized enterprises (SMEs) 1.1 Introduction Small and medium-scale enterprises (SMEs) contribute significantly to the global economy. SMEs form the backbone of developing countries and represent the rapidly growing sector. SMEs’ key role is to promote entrepreneurial focus and innovation, thereby ensuring competitiveness. SMEs enable several larger companies and have a significant contribution to the world economy. This chapter reviews the definition of SMEs and their economic share, analysing the characteristics of small firms and their comparison with large businesses. 1.2 Definition of SMEs While formulating plans and policies for any organisation, it is of the utmost importance to know the nature and type of business you are dealing with. Businesses across the globe are categorised based upon their magnitudes with respect to their size, capacity, capital invested and workforce employed. On a broad scale, large companies are grouped as one type while all other businesses are grouped as another. Though all enterprises falling under the second group enjoy the same social status as per legal norms followed by most countries across the globe, their economic levels are substantially different. Based on the creation of better development plans for such organisations, they are further categorised based on their magnitudes as SMEs. Broad classification of enterprises has been further extended to include micro enterprises along with SMEs to form micro, small and medium enterprises (MSMEs), due to continuous research efforts in recent years into the nature and functioning of enterprises. Various regional authorities have classified SMEs based on vital criteria such as size of the plant, capacity, workforce size, investment and returns, which play a major role in deciding on the amenities and services to be provided and enjoyed by the firm...
eBook - ePubThe Economics and Management of Small Business
An International Perspective
- Graham Bannock(Author)
- 2004(Publication Date)
- Routledge(Publisher)
...3 Do small firms matter? 1 The large firm/small firm paradigm In a superficial sense, the answer to the question posed by the title of this chapter is obvious. As shown in the Appendix, SMEs account for about 60 per cent or more of employment and 20–30 per cent of GDP in the advanced countries, and perhaps for more in the developing world. Of course, small firms must matter. Yet SMEs are generally regarded as poor cousins to large firms: less productive – look at the disparity between their shares in employment and value added – less sophisticated, less powerful and, well, smaller. That is the static view; in a dynamic perspective, it has not been possible to ignore the fact that almost all large firms started out as small, many of them quite recently. Think for example of Pfizer (1942), Honda (1948), Intel (1968), Wal-Mart (1969), Microsoft (1981) and Cisco (1984). The seedbed role of the small business sector has been accommodated into conventional thought through the perfectly correct perception that only a tiny minority of small firms ever do grow to really significant scale. The mass of SMEs are still seen as vestiges of the agricultural, craft-dominated past – indeed, almost as a backward peasantry. The universal persistence of official measures for the support and modernisation of small firms bears witness to the prevailing view that while SMEs are in need of help and are something of a drag on the economy, the real motor of economic growth is large enterprise which can benefit from economies of scale, investment, research and development (R&D) and scientific management. It is easy to see why this should be so. As we shall show, the long rise of western economies to historically unprecedented levels of income per capita has been accompanied by a reduction in the share of SMEs in output and employment, despite some reversals, especially in the 1960s. Economic advance seems always to have been led by large firms...
eBook - ePub- Craig E. Carroll(Author)
- 2016(Publication Date)
- SAGE Publications, Inc(Publisher)
...Nell C. Huang-Horowitz Nell C. Huang-Horowitz Huang-Horowitz, Nell C. Small- to Medium-Sized Enterprises Small- to medium-sized enterprises 754 756 Small- to Medium-Sized Enterprises Small- to medium-sized enterprises (SMEs) can be defined by the number of people they employ, by their financial performance, or by how they compare with other similar organizations in their field or industry. In the SME literature in the United States, one definition that is often cited is that of the U.S. Small Business Administration. It defines a small business as one that is independently owned and operated, is not dominant in its field of operation, and employs fewer than 500 employees. SMEs are distinct from larger corporations in several ways and play a different role in society; therefore, their reputation management strategies and focus may have to be different and tailored to their own characteristics. This entry first covers the role of SMEs in society and their differences from large organizations. It then discusses the implications of SMEs’ role and characteristics for the reputation management strategies they use. Role in Society SMEs play an important role in society for three reasons. First, according to the U.S. Department of Commerce, they represent 99.7 percent of all U.S. employer firms. Most people who are employed work for an SME rather than for a large business. Second, SMEs often are able to create more jobs during economic recessions than larger companies and, by extension, assist with national recovery from these economic downturns. Last, many young professionals enter the workforce through obtaining jobs at an SME rather than a larger corporation. The first job that a young college graduate gets is more often in an SME than in a large business. SMEs have different structures, cultures, and goals compared with larger businesses...
eBook - ePubEconomics
A Foundation Course for the Built Environment
- J.E. Manser(Author)
- 2003(Publication Date)
- Routledge(Publisher)
...With a small firm the client has the reassurance of dealing with the principal and knowing the work will be undertaken or supervised by them. Modifications to the original plans are more easily handled and problems can be resolved on the spot. Some small firms are small because they are new. Not all of them stay small. Many will fail, others will grow and may eventually become large empires, but the majority of successful small businesses which stay small do so because their owners enjoy taking personal responsibility for running the firm, and providing a good service for their customers and a friendly atmosphere for their employees. THE CONSTRUCTION INDUSTRY Few industries can match the range of firms found in the construction industry, from international giants at one end of the scale to thousands of small firms and self-employed individuals at the other. The majority of firms are small, 95% employ fewer than ten men, but half the industry’s workload is undertaken by the top 1% of largest firms. As in other industries, there has been a tendency for the number of firms to decrease and the average size to grow in the 1960s and 1970s, but this trend was less marked in building than in other sectors. In more recent years increased subcontracting and a huge expansion of very small firms has partially reversed the trend, so it is the middle ranking businesses where numbers have declined (Table 10.1). Small firms are encouraged by the ease of entry into the industry. There are no entry barriers in the form of qualifications or licences, the amount of capital required is small and the widespread practice of subcontracting enables small firms to get involved in contracts much larger than they could handle on their own. Moreover, repair, maintenance and improvement work, especially in the housing sector, means a constant flow of smaller jobs, which are suited to local firms (Fig. 10.2). Smaller firms have faced considerable pressure in recent years...
