Dissertation About Development Of Small Firms In China - 3300 Words

Dissertation About Development Of Small Firms In China (Dissertation Sample) Content: IntroductionThe last five decades have been characterized by massive industrial growth in most Asian countries a factor that has been attributed to the development of their firms. To effectively put things into perspective, there is need to understand the state of their firms, the many opportunities as well as constraints that they are exposed to and how they have been able to handle them in their quest to develop over the years. There is also need to define as well as differentiate between what qualifies to be a small firm and what meet the minimum criterion of being referred to as a large firm. To effectively address this, there is need to come up with various parameters that will be used in highlighting some of the key things to look at when determining whether a firm is small or large. As a way of ensuring that an effective research is done, the paper will also look into the possibility of addressing the relationship between large firms and small firms and how doe s this kind of linkage affect the operations of either side.Literature ReviewRegardless of the magnitude of the business firms face numerous challenges and opportunities in their daily operations. Profit maximization, reducing employee turnover, and reducing the cost of operation has been salient features that confront most firms in nowadays regardless of the size.Scholar () asserted that profit maximization has been the top challenge that confront various firms in their endeavour to obtain maximum revenue. The objectives that firms formulate are geared towards enhancing the firm will increase the wealth of the shareholders. This goal faces numerous challenges that make realization of this goal unattainable. The limitation of the capital base hinders most companies from pursuing investment needs that will enable the company to increase the market share and for that reason the company will generate significant profits that can be used to expand and grow the business.Government regula tions remain to be another factor that is hindering the progress off most firms whether large or small. It is reported that 36% of firms with more than 51-70 employees confessed that government regulations remain to be a constraint to their various operations they undertake. Some of the laws that the government enacts affect the revenue that is generated by the organizations adversely. Some of the policies that are enacted by the government for instance are, labour regulations and minimum wage increase take a significant revenue that is made by most firms which could have been used for business expansion and growth. Moreover, all firms regardless of the size are required to ensure they protect the welfare of the society by ensuring the projects that organizations will implement will not have negative externalities to the public. The interests of the society are given more attention consequently most firms are discouraged from making any investment decision that will not benefit the society in a positive way. Lastly, the taxation policies that are imposed by the central government for instance, the corporate tax reduces the revenue that is generated by the firms. Tax reduces the amount of the revenue that could have been ploughed back into the business to expand the capacity and improve on the efficiency of the firm.Employee healthcare is another constraint that has remained to have a direct impact on the business. This challenge majorly targets the major firms that have more than 50 employees. The legislation demands that these firms must provide a healthcare coverage on its employees and therefore most of these firms strive to ensure they are in compliance with this regulation which has become to be a burden to those firms that are making good returns from their investments. Scholar () asserted that lack of proper employees policies increases the incidences of job dissatisfaction and therefore the employees tend to maximize their leisure time and work for les s hours which is against the interests of the shareholders of the company. With proper measures in place that will increase morale of workers, increased production can be realized because the employee turnover will be low and therefore the firms will have an ample time to increase their marketing strategy with an objective of capturing more markets for their products as well as maintaining customers loyalty. Entrepreneur () said that employee compensation should be pegged on the performance of the worker and therefore the worker we will feel motivated to increase his/her efforts and also make decisions that are in harmony with the objectives of the company.Most of the opportunities that are available in business sector depend on the size of the firm. If a firm has several subsidiary offices then it is likely to make good returns because it has the capability to cover large market than a small firm that few operations that are limited in one specific area. Entrepreneur () asserted th at the scope of operations that are undertaken by the firm plays a crucial role in determining the amount of revenue that will be generated. Large firms stand a better position to make huge profits from their business activities because they have a large capacity and they are diversified in terms of the goods they produce. On the other hand, small firms face different opportunities as compared to the large firms because the scope of operation for the small firms is limited and therefore these firms will explore other opportunities that are there in the market to make them remain competitive in the market.Empirical MethodologyChina different climatic conditions have led to uneven population density in this country with some parts of the country experiencing large number of people while other parts of that are sparsely populated. Parts of the country that are densily populated include Yangtze delta, Pearl river delta and other fertile like Sichuan basin where intensive agriculture is centred. On the other hand some parts of the country like, northern part of Tibet and sandy areas of Tarim and barren land and mountainous regions of Lop Nur. Chinas recent development programmes it has initiated in the entrepreneur sector has attracted the development of small family firms that have accelerated the rate of economic development and growth in the country. The country has concentrated to embrace social-economic reforms that will transform the market oriented system.Sampling Procedure and Sample sizeSystematic sampling was used to derive the right sample size with the aid of World Business Environment Survey where all the firms both the small and large firms were arranged serially and a firm was chosen after an interval of every ten firms. A sample size of 199 firms was obtained.Data types and sourcesSecondary data was used in this research paper where data was obtained from the Business Environment Survey website. Data that was collected inclyded the challenges as wel l as opportunities that firms face in their pursuit to meet their business objectives.Data analysis and Analytical TechniquesQualitative data that was collected was first coded to make analysis of this data possible. STATA software was used to analyse the collected data and the analysed data was presented in form of tables. Multiple regression test was analyse the data in order to find out whether small firms face similar constraints and challenges as the large firms do. The researcher points at investigating whether small firms face different business challenges and opportunities than the large firms? The research question was tackled by obtaining subordinate statistics from WEBS website in case of China which was later analysed by running Ordinary Least Squares regression test using SPSS. The statistical data was analysed using an alpha value of 0.05 which was used to compare the probability value of various autonomous variables that were analysed in this research paper. The proba bility value of 0.05 was used since the analysis was computed at 95% confidence level to compare whether the variables were statistically significant or insignificant. The output of the analysed data was depicted as shown below:Data SectionTable 4.1 CoefficientThe above table reflects autonomous variables that entails the opportunities and constraints that small firms undergo in pursuit of their business objectives. As per the findings, regulations pertaining importation or exportation of goods appear to be a great challenge that confronts small firms whose coefficient is at 0.322. A coefficient value of 0.322 indicates the extent to which the export and import regulations affect the firm size. This is statement is statistically significant at a probability value of 0.002 because it is less than the alpha value of 0.05. That means that customs regulations hold a significant influence on determining the size of the firm and it concurs with the alternative hypothesis the study can ado pt that small firms face similar constraints and challenges as the large firms face. In case the p-value is greater than the alpha value, it necessitates retention of the null hypothesis which is not case in this autonomous variable. The next factor that most small firms face just as the large firms face is fire regulation which is evident at a coefficient value of 0.303 at 95% confidence level. This information is statistically insignificant at a probability value of 0.303 which is greater than the alpha value of 0.05. The other challenge that confronts the small firms is a number of competitors in the market. It was found that the number of rivals for the small firms hold a coefficient value 0.198 which predicts the challenges undergone by the small firms just as the large firms face. This information was statistically insignificant at a probability value of 0.452 which is greater than the alpha value of 0.05.Finance constr...