Testing the homogeneity of SMEs: The impact of size on managerial and organisational processes

In: European business review, Volume 16, Issue 1, p. 64-77

Abstract

The European Commission (EC) is updating the definition of small and medium sized enterprises (SMEs) following widespread consultation. The EC is focusing on a redefinition of the financial ceiling criterion rather than the ceilings in relation to the number of persons employed in categorising SMEs as micro, small or medium. The retention of a ceiling of 250 employees as the overall employment criterion for SMEs has a major drawback in that it assumes that all firms from micro to medium have broadly similar organisational and managerial processes. Some researchers contend that organisational size based on employee numbers is an important underpinning factor in the way these processes are emphasised. The analysis presented indicates that while size is important, it does not have a significant impact on the managerial and organisational processes examined. These findings lend some support for the retention of the existing size criterion in the definition of SMEs.