Critical Success Factor of SMEs During Economic Recession

Abstract

The recession has caused many SMEs to close their doors, but some still found ways to survive and even thrive during these difficult times. This study intends to identify the critical success factors for SMEs in Malaysia to survive during an economic recession. The research methodology used in this study was a questionnaire survey and several semi-structured interviews. The data was collected from July through August 2020. Some three hundred surveys were sent out to the public using email, WhatsApp, and Telegram. Personal contacts were used to disseminate the surveys to respondents from SMEs across Malaysia. The findings focus on the sustainability strategies used during a turbulent environment like the current economic recession in Malaysia. The findings of this study concluded that improving access to finance and other support from government and financial institutions, human resources strategy, product innovation, and network strategies were also other factors to Malaysian SMEs' success during an economic recession. Adopting downscoping as a sustainable strategy help improve company profitability and stability as this will help sustain market competitiveness. Focusing on long-term strategies to sustain competitiveness in the market is also suggested as a critical success factor for Malaysian SMEs during an economic recession. It is in line with the government's strategy to successfully help Malaysian SMEs compete in a global market.