Internal and external obstacles facing medium and large enterprises in Rusayl Industrial Estates in the Sultanate of Oman

Abstract

Industrial Estates are significant for the growth of any economy. In this research, the business mangers' perceptions of the internal and external obstacles facing medium and large enterprises in the Industrial Estates are collected and analyzed. The research is conducted with special reference to the Rusayl Industrial Estate (RIE), a prominent Industrial Estate in Oman. A structured questionnaire was administered to a sample of 42 enterprises in the RIE. The survey discovered that medium enterprises reported more obstacles, both internal and external, compared to larger enterprises. Among a variety of external barriers, the lack of raw materials, the lack of skilled workers, visas for foreign workers and the high interest rate of business loans, are at the top of the list. The most significant internal obstacles are competitive pressure in the market, difficulty of external marketing, high labor cost and high operating cost. Some challenges, such as lack of skilled workers and difficulty getting visas for foreign workers are common to medium and large enterprises alike. The study emphasized the need for strategic intervention by regulatory agencies primarily aimed to mitigate the various challenges and provide a conducive environment for enterprises to develop.

Revisiting the Challenges Affecting SMEs Through Behavioral Approach

“…1-All the internal challenges of SMEs could be controlled by high managerial competencies. The second portion of the findings constitutes of external challenges which corroborate other studies which posit that business environment (Sanyal et al, 2020), environmental dynamism (Paul et al, 2017), fierce competition (Gunerergin et al, 2012;Fatoki, 2014;Tran, 2015;Al-Maskari et al, 2019) and social influence (Pollard & Jemicz, 2010;Ellis, 2011;Cant & Wiid, 2013) are major challenges today. Compared to RBV, the dynamic capabilities view (DCV) is another efficiency-based approach but paid higher consideration to external threats and opportunities that exists in the contemporary rapidly changing environment (Matute, 2012).…”

“…From the first glance, a researcher might think resources availability and infrastructure's status are the developing nations' major challenge. Nonetheless, many developing countries neither have problem with resources availability nor infrastructure but with corresponding management (Ramukuma, 2014;Farsi & Toghrae, 2014;Džafić et al, 2011;Coad et al, 2012;Kumarasinghe, 2017;Al-Maskari et al 2019). Conversely, resources availability and infra state are among the key challenges in many developed countries (Wood et al, 2015;Kahiya & Dean, 2016;Paul et al, 2017).…”

“…Many researchers believe SMEs are resources constraint organizations (Ramukuma, 2014). Despite the researchers who are biased towards the financial domain in investigating SMEs problems (Levy, 1993;Pissarides, 1999), most studies have reported that SMEs major problems are access to finance, skilled staff, and the availability of raw materials (Džafić et al, 2011;Coad et al, 2012;Gunerergin et al, 2012;Cant & Wiid, 2013;Fatoki, 2014;Ramukuma, 2014;Agwu, 2014;Tran, 2015;Wang, 2016;Ericson et al, 2016;Serefoglu & Gokkaya, 2017;Kumarasinghe, 2017;Battistella et al, 2018;Al-Maskari, 2019;Sanyal et al, 2020). Paul et al (2017) mention that, unlike large firms, SMEs lack the ability to build a base of resources and capabilities overtime and, hence, they cannot benefit from crucial concepts such as economies of scale and scope, financial and technological resources.…”

Effect of owner-manager’s financial literacy on the performance of SMEs in the Cape Coast Metropolis in Ghana

“…SMEs in Ghana have suffered slow growth (Asare 2014), have limited customer base, and are not competitive especially on global level (ITC 2016). Previous studies have attributed these challenges to access to finance, low capacity of research and development in technology, absence of business strategy and inadequate managerial competency (Asare 2014;Haselip, Desgain and Mackenzie 2015;Boateng and Poku, 2019;Al-Maskari et al 2019;Bowen et al 2009). These studies and others have focused largely on the access to credit and other managerial skills with less emphasis on financial literacy.…”

“…This situation presents a challenge for owner-managers of SMEs in their quest to enhance the performance of their firms as banks and other organizations consider their financial literacy before dealing with them (Lusardi and Mitchell 2007a). Furthermore, previous studies (Asare 2014;Haselip, Desgain and Mackenzie 2015;Boateng and Poku 2019;Al-Maskari et al 2019) have focused more on the availability of finance, managerial competency and general business climate as the major factors impacting on SMEs performance. These studies have not looked at how financial literacy impacts of financial performance, thus creating a research gap.…”