Importance of small and medium-sized enterprises in a market economy

The importance of small business for the country in a market economy can hardly be overestimated. The development of market relations is impossible without the development of entrepreneurship, which is aimed at saturating the market with goods and services, expanding competition, and introducing innovative technologies.

Analysing the entrepreneurial environment reveals a number of reasons that hinder the development of small business, despite the state support.

• Firstly, the difficult economic situation in the country: inflation, production decline, high level of tax rates, poor protection of entrepreneurs at the level of legislation.

• Secondly, insufficient level of knowledge of entrepreneurs, lack of high business culture

• Thirdly, the disapproving attitude of part of the population towards entrepreneurship, associating this type of activity mainly with low quality of goods and services and financial irregularities.

• Fourth, the lack of proper regulation of small business development at the regional level.

The state is interested in the development of small business, which makes it possible to carry out structural reorganisation of the economy, create new jobs, intensify innovation activity, and contribute to the formation of a social layer of active owners and entrepreneurs, who form the social base of market reforms and thus stabilise society as a whole.

Currently, many Poland enterprises are experiencing crisis situations. The reason for this is both external factors and mistakes of entrepreneurs themselves. Therefore, in the conditions of the Poland economy is relevant - crisis management, which can be defined as a set of processes, methods and tools aimed at anticipating, avoiding or eliminating the crisis with minimal losses. That is why it is necessary to use crisis management technologies in modern enterprise management.

Crisis management

Crisis management includes management of insolvency (bankruptcy) and the process of financial recovery of the enterprise. With sufficiently effective management, a small enterprise is unlikely to face the necessity of this process.

Strategic management

Strategic management - management aimed at the implementation of the development strategy of the enterprise, includes the definition of the mission, analysis of the external and internal environment, the choice of the main strategic goal and the development of development strategy and ways of its implementation. This process is important for any enterprise. At the same time, the Poland practice of entrepreneurship shows that not all small businesses actively implement and realise strategic management.

Risk

Risk - management is risk management aimed at reducing losses from possible negative situations in the activities of the enterprise. To date, there is practically no systematic approach to this process at small business enterprises. Perhaps, the owner (entrepreneur) at the intuitive level calculates risks from time to time, but it does not cover all the basic elements of risk management, such as: risk identification, detection of the area of increased risk, assessment of the degree of risk probability, development of risk prevention programmes.

Re-engineering

Re-engineering - assumes a process approach in enterprise management, when there is a transition from the management of individual operations to the management of cross-functional business processes, which are aimed at meeting the needs of both external and internal customers. It is on this approach to management that the establishment of a quality management system (QMS) at the enterprise is based. QMS, in turn, increases the competitive advantages of the enterprise in the consumer market by standardising and regulating its activities. At such approach in management, the small enterprise will reach high quality not only goods (services), but also all processes of the organisation, because firstly it is oriented on consumers, secondly constantly carries out an estimation of efficiency of all processes and timely reacts to changing factors of external and internal environment, introducing new technologies and innovations.

Anti-crisis reengineering is designed to prevent the bankruptcy of small business enterprises by eliminating unprofitable units, improving the organisation of labour, optimising the number of employees by revising their functionality, reducing costs and optional payments, etc.

Benchmarking

Benchmarking - programme-targeted management of investment, innovation and marketing projects on the basis of market assessment of competitive positions of the enterprise and successful global experience. This process is also underutilised by small business enterprises.

Thus, crisis management is an integral part of the overall management of small business enterprises, because it involves a system of management measures to diagnose, prevent, neutralise and overcome crisis situations and their causes.