Critical Success Factors for SMEs: An Empirical Study in the UK Chemical Distribution Industry

Abstract

The UK chemical distribution industry, which is a well-established, fragmented, subject to strong consolidation, significant part of the chemical industry and a major contributor to the UK economy and employment, remains largely unexplored, with no research in the factors contributing to SMEs success. This is the first study to identify the factors critical to small business success and provide an integrative perspective in the specific industry. The research is based on the opinions of owners and very senior managers (Managing Directors, Directors, CEOs and CFOs), an approach extensively used by other researchers. A total of 180 SMEs fulfilling the criteria of this study are identified with 118 owners/managers participating, generating a very satisfactory response rate of 65.5%. Regulatory Compliance, Entrepreneurial Orientation, Customer Relations Management, Market and Product development, Prior Work Experience and Management Skills, Human Capital, Economic Environment and Strategic Planning are established as critical success factors (CSFs). Findings suggest that success is a multidimensional phenomenon where both firm-internal and firm-external factors need to be optimal simultaneously; satisfying one or two factors does not necessarily guarantee success. Strong interrelationships are also revealed amongst the critical and non-critical success factors. The paper contributes towards the integration of SMEs success factors theories and provides guidelines to various stakeholders and policy-makers to improve strategy formulation and decision-making process in supporting chemical distribution SMEs.

A Qualitative Perspective of Enterprise Success Factors for SMEs: A case study in the UK Chemical Distribution Industry

“…Based on Lampadarios' (2015 and2016) study, Customer Relations Management, Market and Product development, Human Capital and Strategic Planning are identified as the most important enterprise success factors for SMEs in the UK chemical distribution industry and are thus considered critical. These factors and their importance are investigated further through the collection of qualitative data from the participating owners/managers, providing a richer, deeper view into the research topic.…”

“…The primary aim of the original study by Lampadarios (2015) was to use the existing theories on success factors for SMEs to identify those factors critical for small businesses operating in the UK chemical distribution industry -with the intention to prove or disprove the theories-and to establish the most important entrepreneurial, enterprise and environmental factors. Therefore, this study followed a strong positivism paradigm as it clearly sought to identify and measure a phenomenon and subsequently provide a rational explanation.…”

“…The most recently informed and highly consolidated framework is that of Lampadarios et al (2015). This is based on the extant literature, including entrepreneurship and not only SMEs specific studies while incorporating factors contributory to all aspects of small business success (growth and non-growth) and failure.…”

“…Figure 1. Conceptual framework (adopted by Lampadarios et al, 2015) This framework categorises the variables of small business success into three broad categories: factors relating to the individual (personal or entrepreneurial), factors relating to the firm (enterprise) and factors relating to the external business environment. This is an approach widely used in studies investigating small business growth and success factors (Andersson & Tell, 2009;Caca, 2010;Kader et al, 2009;Karpak & Topcu, 2011;Krasniqi et al, 2008;Ogundele, 2007;Simpson et al, 2012;Smallbone & Wyer, 2000).…”

Evaluating SMEs Growth Strategies: The Case Study of A Medium-sized UK Specialty Chemical Distributor

“…The only study published in this specific industry is the one by Lampadarios (2016b) who investigated the critical success factors of SMEs in the UK chemical distribution industry. In doing so, Lampadarios" argues that "success is a multidimensional phenomenon where both firm-internal and firm-external factors need to be optimal simultaneously; satisfying one or two factors does not necessarily guarantee success" (Lampadarios, 2016b, p. 67).…”