SMEs, or small and medium-sized enterprises, make up the majority of the businesses operating around the world. Generally, they are independent firms with less than 50 employees. However, the maximum number of employees is different from one country to the next. For most companies, the upper range sits around 250. The United States defines an SME, among other characteristics, as those with no more than 500 workers.
Depending on whether a manager is working for an SME or a large enterprise, their day-to-day responsibilities will vary. The number of employees under their supervision and the amount of work each employee is responsible for can make a difference in how to manage them efficiently.
In this article, we discuss some key differences between managing an SME versus a large enterprise so that managers can better understand how they should be approaching their jobs differently depending on their current situation.
Team management in SMEs is a bit easier compared to a big enterprise
It’s important to note that while there are many differences between managing a small team and a large one, there are also some similarities. The most important thing is that you know what your role as manager is: it’s about making sure that everyone on your team knows what they need to do and how they can contribute towards achieving the company goals. In both situations, you need to make sure that everyone has the tools needed to be successful
Managing a small team is fairly straightforward. You know everyone’s names and faces, and what they’re working on. You can easily see how each team member’s work impacts the whole organization, which means you can adjust your strategy as needed to make sure everyone is pulling their weight.
But when you have an army of employees at your disposal—and possibly even multiple teams with different personalities, skill sets, levels of experience, and goals—it becomes much more difficult to always keep things running smoothly.
Most small business owners don’t realize that managing a large group can be more challenging than managing a smaller one until they’ve given it a go themselves!
Conflicts in teams can be handled better in SMEs
Conflicts within teams can occur in both small to medium-sized enterprises (SMEs) and large enterprises. However, the nature of these conflicts and the way they are managed may differ between the two types of organizations.
In SMEs, where the team is likely to be smaller and the organizational structure is flatter, conflicts may be more easily identified and resolved. There may also be more opportunities for open and honest communication and team members to directly address conflicts with one another.
In large enterprises, where there may be a larger number of team members and a more hierarchical structure, conflicts may be more difficult to identify and resolve. There may also be more layers of management involved in the resolution of conflicts, which can make the process more complex.
On the other hand, in a big team, you can generally avoid that annoying person who always wants to tap you for advice when you’re busy. However, in a small team, you can’t avoid clashes in personality or working style because that person is always right there.
Differences are more obvious because there are fewer people to dilute the effect of someone noisy or abrupt. Clashing work styles can create an uncomfortable atmosphere at work where someone insists on doing a task a particular way, despite that not being the best way for the team.
Both SMEs and large enterprises need to address conflicts within teams in a timely and effective manner to avoid negative impacts on team performance and productivity. This may involve the use of conflict resolution strategies such as open and honest communication, clarifying roles and responsibilities, providing training and support, and encouraging collaboration.
Teamwork could be better in large enterprises
Teamwork in small and medium-sized enterprises (SMEs) is often characterized by a more close-knit, informal, and flexible approach compared to that in large enterprises. Due to their smaller size, employees in SMEs tend to have broader roles and more responsibilities, and there is often less hierarchy and bureaucracy. This can lead to a more collaborative and cohesive work environment, where communication is more direct, and decision-making is more decentralized.
However, it’s important not to fall into the trap of overlapping work. When everyone is having a go at everything, there can be problems. For example, two of you might decide to do the same task and not let each other know. Or, two team members contact a customer to ask a question or set up a meeting. While it’s great that your team is proactive and everyone steps up when a task need doing, sharing the workload without talking about who is doing what can be a massive problem.
In contrast, large enterprises often have a more formal and structured approach to teamwork, with more defined roles and responsibilities, and a more hierarchical organizational structure. Decision-making tends to be more centralized, and communication is often more formal and bureaucratic. The larger size of the organization also means that there may be more bureaucracy and red tape, which can slow down the decision-making process.
If you’re in charge of a large team, you’ll likely have less time for a personal touch. Instead of being able to personally mentor and train every member of your staff, it’s important to delegate some tasks so that everyone can take on responsibilities at their own pace.
Communication in teams (formal vs informal)
How do you get your team to work together? How do you facilitate collaboration, even when there’s an urgency to get things done quickly? How do you make sure that everyone is on the same page, especially when so many people are working on different projects? How can you make sure that people aren’t just doing their own thing but helping each other out and collaborating across departments or divisions within the company?
Communication in teams in small and medium-sized enterprises (SMEs) is often more direct and informal compared to that in large enterprises. Due to the smaller size of the organization, employees in SMEs tend to have more direct contact with one another and with senior management, which can lead to more open and efficient communication. This can be beneficial for building trust and fostering collaboration within the team.
In large enterprises, communication is often more formal and hierarchical. Information may need to pass through multiple levels of management before it reaches the intended recipient. This can lead to delays in communication and a lack of transparency, which can negatively impact team dynamics and decision-making.
However, the use of technology such as instant messaging, video conferencing, and project management tools can help to improve communication in teams in both SMEs and large enterprises. Additionally, the implementation of clear communication protocols and guidelines can help to reduce confusion and ensure that important information is shared in a timely and effective manner.
Innovation and Change Management
Innovation and investment are important for the growth and success of both small to medium-sized enterprises (SMEs) and large enterprises. However, how these factors are approached may differ between the two types of organizations.
SMEs may be more agile and responsive to change, which can make them well-suited to innovation. SMEs may also be more open to taking risks and trying out new ideas. However, SMEs may have limited resources available for investment in innovation, which can limit their ability to pursue new opportunities. They face more challenges in accessing funding for investment, as they may not have the same level of resources or established track record as large enterprises.
Large enterprises have more resources available. They are more attractive to investors due to their established track record and scale of operations, but they may also have more established systems and processes, which can make it more difficult to implement change. Large enterprises may also be more risk-averse, as they have more to lose if an innovation project fails.
Failures can be handled better in SMEs
Failures can be a natural part of business and can provide opportunities for learning and growth. However, it is important for both small to medium-sized enterprises (SMEs) and large enterprises to handle failures in a way that minimizes negative impacts and allows the organization to move forward.
In SMEs, the impact of a failure may be more keenly felt, as the organization may have limited resources to fall back on. SMEs may also have a flatter organizational structure, which can make it easier to identify and address the root cause of a failure.
In large enterprises, the impact of a failure may be more diffuse, but the stakes are higher. The hierarchical structure of a large enterprise may also make it more difficult to identify and address the root cause of a failure, as there may be more layers of management involved.
Celebrating successes can help to boost morale, improve team engagement, and motivate employees to continue performing at a high level. At the end of the day, we all want our work to be valued and appreciated. But many people in large organizations feel that their work is less important or receives less recognition than that of their colleagues in smaller organizations. This can be frustrating, particularly when they receive awards or praise from their managers or peers.
In SMEs, celebrations of successes may be more informal and may involve small gestures such as thanking employees personally or offering a small token of appreciation. In large enterprises, celebrations of successes are usually more formal and involve organized events or activities, such as company-wide meetings or team-building exercises.