Impact Of Recession On Small And Medium Business Enterprises In The UK

Background

Case Study, Business Development Plan and Dissertation topics can be used if required but it is not mandatory.

• Discussion and debate on the above mentioned sections should be seen.

• It is expected that you use current peer-reviewed journals and articles to ensure that you have an in-depth understanding of your topic particularly for the Literature Review. 

The impact of Recession on Small and medium business enterprises is the primary concern of this particular study. UK is possessed with a large number of small and medium enterprises based on which the people love to lead their day-to-day life. The overarching term recession is a temporary economic decline because of which the rhythmic flow of trade and industrial activities are fervently reduced.  Currently it has been noticed that a large number of small enterprises of UK such as TPP, Opus Recruitment Solution, The 7 Stars, Reassured Ltd and ChapmanBlack are facing an economic crisis due to several reasons.

The diminution of profit margin after selling particular products, ineffective marketing budget planning and lack of risk analysis are the major causes of business recession. As a result, these small business organizations have to face a major impact both on the employees and on the entire business process. The cash flow has been reduced, the existing staffs have been sacked due to the declination of economy. This particular study has focused to deal with the major effects of recession on those small and medium enterprises.

UK was possessed with a large number of small business enterprises with the help of which people from various geographical areas love to lea their day-to-day life (Bailey and Berkeley 2014). As per the National statistics and survey report, it has been observed that UK SMEs has faced immense challenges in order to run their flow of business properly. The survey report analyses that most of the small business organizations like to lead their business without maintaining an effective profit making plan and progress. As a result, the business experts like to invest large amount of money for product promotion and distribution. Furthermore, before implementing a business strategy and policy, the business managers do not like to conduct an effective risk analysis (Barron, Hultén and Hudson 2012). If this particular strategy fails to draw the attention of target customers, the business experts should implement alternative business policy. These specific factors render a major recession on small and medium business enterprises. However, the current study focuses to deal with the necessary impact of recession on SMEs of UK.   (https://www.cimaglobal.com)

Rationale

The outcome of recession on small and medium enterprises of UK is the primary issue of this specific business report proposal. Form the year 2007, it has been noticed that most of the emerging small business organizations of UK have to face immense difficulties in order to run their organization successfully (Battisti, Deakins and Perry 2013). The human resource managers are unable to recruit sufficient employees within their business process. In addition, a large number of employees have become victimized due to this recession. Both the employees and the employers have faced a disastrous consequence while running their organization systematically (Cowling et al. 2015). Therefore, this particular issue has been raised in order to get a clear overview about the effects of business recession on employees and employers of small and medium enterprises.

This specific study primarily aims to evaluate the necessary reasons of business recession due to which the entire business process of small and medium business enterprises have been immensely affected (Castillo et al. 2014). While discussing the impact, the study intends to highlight the major factors that are the key reasons of rendering the business crisis on the small enterprises of UK.

The objectives of this particular study are as follows:

• To understand the effect of recession on the small business process of UK
• To critically analyze the factors affecting the rhythmic flow of small business enterprises
• To recommend how small and medium business enterprises of UK would be able to overcome this static situation

Research question:

• What is the impact of recession on small and medium enterprises of UK?
• What are the necessary factors that highly influence the business processes of UK SMEs?
• What should be the recommendations for reducing recession from SMEs of UK?

Small and medium business enterprises play a major role in order to provide sufficient job opportunities to the people in general. After facing this kind of situation, most of the small and medium enterprises have to face immense difficulties to retain their existing employees within the process of business (Cowling, Liu and Ledger 2012). As a result, people in general have to suffer immense after losing the job opportunities. This is the primary reason of choosing this particular topic as a business research issue. After evaluating the impact of recession on SMEs, some of the major recommendations would also be provided in order to come into a conclusion.

Outline of the research methodology:

Research methodology is the systematic procedure of conducting an entire research with the help of some relevant processes. In order to accomplish a complete research, methodology is one of the major parts based on which most of the data and information from various resources are collected (Eggers et al. 2013). This particular study focuses to deal with appropriate research philosophy and approach based on which relevant data and information regarding the small and medium enterprises of UK can be gathered. In addition, in order to collect accurate data the study would like to focus on primary data collection procedure for accomplishing the entire proposal effectively (Enqvist, Graham and Nikkinen 2014). Primary data collection procedure is  constituted with several types such as group discussion, focal group, interview method, survey method and so on. For this particular study, only survey and interview process would be selected for collecting data from different authentic resources.

Aims

Research philosophy is the inward belief about particular phenomena. This belief can be acquired by observing the phenomena philosophically. Research philosophy is consisted with several types that include positivism philosophy, realism and finally interpretivism philosophy. Post positivism philosophy would be used for this particular research issue (Henry 2013). As per the point of view of most of the positivists, observations are always repeatable whereas phenomena are isolated. While conducting an effective research, an individual should have a keen observation power based on which this individual would be able to distinguish the factors. Post positivism philosophy is highly dependent on observation (Jones et al. 2013). On the other hand, this particular process of research is not very much cost effective. In order to observe a fact and realize the essence of its fact, the analyst does not have to spend sufficient money (Madridâ€ÂGuijarro et al. 2013).  That is one of the most effective reasons of choosing positivism philosophy for this specific proposal.

Research approach is the systematic way based on which the collected data and information can be utilized within the research. It deals with two primary classifications including deductive approach and inductive approach. This particular proposal will concentrate to deal with deducted approach as deductive approach is primarily based on case study. After conducting an effective case study on the research issue, the relevant data and information has been collected (Papaoikonomou, Segarra and Li 2012). For this specific research issue, few case studies will be conducted in order to know how many SMEs of UK have suffered in recession from the year 2007. Therefore, deductive approach is based on reality. That is the primary reason of choosing this approach for conducting an effective research on this specific topic (Price, Rae and Cini 2013). In addition, deductive approach is time consuming but not very cost effective. As a result, the entire research work can be conducted accurately for executing in-depth data analysis.

Data collection method has been considered as one of the most effective techniques of acquiring appropriate data and information regarding the particular research issue. Data collection method is constituted with two types that include primary source of data and secondary source of data (Smallbone et al. 2012). Primary source of data will be collected from survey, interview, and group discussion and so on. On the other hand, secondary source of data is collected from various books, journals, magazines, website information and many. This particular business research proposal will focus to collect primary source of data due to several reasons. Primary source of data helps to collect current information from different sources.

Objectives

The communication in between the sender and receiver is very effective in primary source of data collection. Participants can get a scope to provide an immediate feedback whether positive or negative. On the other hand, participants can directly involve in delivering appropriate data and information (Soininen et al. 2012). SMEs of UK are large in number. As a result, not every employee of various business organizations would be able to provide relevant data. Only some of the popular organizations of UK such as Opus Recruitment Solution, The 7 Stars will be earnestly requested for providing important information for creating recession within the business process small business enterprises of UK.

While collecting primary source of data, the two major data collection techniques would be used for conducting an effective research work. Both the qualitative and quantitative source of data would be used in order to get an immediate feedback from the participants. 50 employees of Opus Recruitment Solution will be chosen in order to conduct an effect survey. On the other hand, 5 managers from this particular organization would be selected in order to collect their response regarding the impact of recession on the SMEs of Australia.

Sampling is a harmonized procedure of involving the participants for providing data about the particular issue raised in this specific study. Sampling technique is consisted with two parts that include probability sampling and non-probability sampling technique. Apparently, sampling method is quite different population. Population is conducted with a large number of people beyond any specific boundary (Wilson, Williams and Kemp 2012). For an example, Sampling technique will like to involve a specific participants limited with a particular department. Population does not maintain any geographical boundary. 

However, for this particular study, probability-sampling technique will be followed. Probability sampling is otherwise named as random sampling method. In probability sampling techniques, not specific participants are involved for providing feedback; rather a large number of employees from a particular department would be involved in order to provide feedback. More than 100 sampling size would be chosen. Among them 50 respondents are expected to participate in the survey report (Henry 2013). On the other hand, non-probability sampling technique is quite specific. Therefore, a large number of employees can never be involved in collecting appropriate data and information. SMEs of UK are highly affected with recession. Therefore, the employees can be involved in order to provide necessary data regarding the actual causes of recession in UK small business enterprises.

Research Methodology

In order to conduct an effective research in a particular topic, some of the most important factors have to be taken into consideration. Ethical and reliability consideration are one of the factors. At the time of collecting sufficient data and information, ethics and values should be maintained strictly. Not a single person should be forced for providing any information. In addition, the data that would be collected from numerous resources should have reliability (Battisti, Deakins and Perry 2013). The survey and the interview that would be conducted from the employees and managers of the organizations should have validity. Research would be conducted based on the current feedback of the employees not on the previous point of views of participants. The employees that intend to take part in the survey and interview methods should be reliable.

Research activity	First week	Second week	Third week	Fourth week	Fifth week	Sixth week	Seventh week
Writing research proposal	â—Â
Understanding the literature	â—Â	â—Â
Finalizing the  objectives		â—Â
Formulation of research approach		â—Â	â—Â
Preparing research methodology		â—Â	â—Â
Re-evaluation of secondary data			â—Â	â—Â
Data Analysis				â—Â	â—Â
Checking the total project					â—Â	â—Â
Final submission of work							â—Â

Figure 1 : Gantt chart

Source: Created by Author

The impact of recession on the SMEs of UK is the primary research issue. Based on that particular issue an effective research work will be conducted in order to know how the existing employees as well as the small business organizations of UK have to suffer immensely at the time of recession. While dealing with the project, an in-depth overview on the negative impact of recession has been discussed. At the same time, various factors that affect the organizational success have also been highlighted in the literature review.

In the research methodology, the post positivism philosophy and deductive approach would be chosen in order to make an effective research. This particular proposal decides to choose 50 employees in survey method for collecting data and information regarding the various factors of recession. Therefore, the outcome of the entire research is expected to be positive. At the same time, it is undeniable that only 50 employees are not sufficient for providing sufficient data and information for the particular research topic. The expected outcome may be affected due to the limited number of respondents.

Reference List:

Bailey, D. and Berkeley, N., 2014. Regional responses to recession: the role of the West Midlands Regional Taskforce. Regional Studies, 48(11), pp.1797-1812.

Barron, A., Hultén, P. and Hudson, S., 2012. The financial crisis and the gathering of political intelligence: A cross-country comparison of SMEs in France, Sweden and the UK. International Small Business Journal, 30(4), pp.345-366.

Battisti, M., Deakins, D. and Perry, M., 2013. The sustainability of small businesses in recessionary times: Evidence from the strategies of urban and rural small businesses in New Zealand. International Journal of Entrepreneurial Behavior & Research, 19(1), pp.72-96.

Castillo, V., Maffioli, A., Rojo, S. and Stucchi, R., 2014. The effect of innovation policy on SMEs’ employment and wages in Argentina. Small Business Economics, 42(2), pp.387-406.

Cowling, M., Liu, W. and Ledger, A., 2012. Small business financing in the UK before and during the current financial crisis. International Small Business Journal, 30(7), pp.778-800.

Cowling, M., Liu, W., Ledger, A. and Zhang, N., 2015. What really happens to small and medium-sized enterprises in a global economic recession? UK evidence on sales and job dynamics. International Small Business Journal,33(5), pp.488-513.

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Enqvist, J., Graham, M. and Nikkinen, J., 2014. The impact of working capital management on firm profitability in different business cycles: Evidence from Finland. Research in International Business and Finance, 32, pp.36-49.

Henry, L., 2013. Intellectual capital in a recession: evidence from UK SMEs.Journal of Intellectual Capital, 14(1), pp.84-101.

Jones, P., Beynon, M.J., Pickernell, D. and Packham, G., 2013. Evaluating the impact of different training methods on SME business performance.Environment and Planning C: Government and Policy, 31(1), pp.56-81.

Madridâ€ÂGuijarro, A., Garcíaâ€ÂPérezâ€Âdeâ€ÂLema, D. and Van Auken, H., 2013. An investigation of Spanish SME innovation during different economic conditions. Journal of Small Business Management, 51(4), pp.578-601.

Papaoikonomou, E., Segarra, P. and Li, X., 2012. Entrepreneurship in the context of crisis: Identifying barriers and proposing strategies. International Advances in Economic Research, 18(1), pp.111-119.

Price, L., Rae, D. and Cini, V., 2013. SME perceptions of and responses to the recession. Journal of Small Business and Enterprise Development,20(3), pp.484-502.

Smallbone, D., Deakins, D., Battisti, M. and Kitching, J., 2012. Small business responses to a major economic downturn: Empirical perspectives from New Zealand and the United Kingdom. International Small Business Journal, p.0266242612448077.

Soininen, J., Puumalainen, K., Sjögrén, H. and Syrjä, P., 2012. The impact of global economic crisis on SMEs: does entrepreneurial orientation matter?.Management Research Review, 35(10), pp.927-944.

Wilson, C.D., Williams, I.D. and Kemp, S., 2012. An evaluation of the impact and effectiveness of environmental legislation in small and mediumâ€Âsized enterprises: Experiences from the UK. Business Strategy and the Environment, 21(3), pp.141-156.