An empirical study of critical sucess factors for small and medium enterprises in Saudi Arabia. Challenges and Opportunities.

Abstract

Small and medium enterprises (SMEs) are considered to be a most efficient tool which is able to push economic and social development to experience significant progress and development as they offer useful services to consumers, and provide much needed employment. With this in consideration, they are useful for training, acquiring experience and technical and managerial skills. The objectives of this research are to identify the Critical Success Factors (CSFs) for SMEs in Saudi Arabia. Based on the literature review, 20 factors have been identified and subsequently structured into three groups, namely entrepreneurial, enterprise and environmental factors. The study also focuses on the SMEs Support Programme by identifying the current situation and accordingly providing recommendations based on those made by the support providers. Data have been collected by utilising a mixed method approach: first, 146 postal questionnaires with SME owners/managers have been analysed by using SPSS; second, in order to gain further understanding of the situation and particular challenges, 15 in-depth interviews with support providers have been conducted; and third, Analytical Hierarchy Process (AHP) has been used to analyse the pairwise comparison of the factors. The main findings of this study are that, for the CSFs for SMEs in Saudi Arabia, three factors are deemed to be important both for owners/managers and support providers. These factors are quality of the product and service, customer satisfaction, and business planning. The findings also indicate that there are many ¿important support gaps¿ which show that existing support needs to be addressed in order to improve and develop the support structure.