Are SMEs still profitable in an economic crisis? Qualitative research on Romanian entrepreneurship and crisis management

• Author: Nicolau C.
• Pages: 217-232

Bulletin of the Transilvania University of Braşov

Series V: Economic Sciences • Vol. 8 (57) No. 2 - 2015

Are SMEs still profitable in an economic crisis?

Qualitative research on Romanian

entrepreneurship and crisis management

Cristina NICOLAU1

Abstract: Small and medium-sized enterprises (SMEs) pay a crucial role in the Romanian

economy, having a significant contribution to achieving the domestic gross product (GDP);

they represent an important source of workplaces, have a considerable number of

employees, whose labour productivity is very high as compared to the one in the large

enterprises and, last but not least, they are much more flexible in adapting organizational

strategies to the conditions generated by the business external environment. That is why we

consider of high importance the analysis of the entrepreneurial behaviour of the Romanian

small and medium-sized enterprises that provide services, particularly in a situation of

financial crisis and if taking into consideration the ever-changing Romanian economic

environment. In order to achieve the goal of this paper, namely to identify and analyse the

entrepreneurial behaviour of the SMEs in the Romanian Central Development Region, we

made an option for the qualitative research method called semi-directive in-depth interview.

The discussion group was made up of 7 managers of SMEs in the Central Development

Region. At the same time, we had in view to study the influence of the business environment

and the legislative framework upon the economic development and profitability of the SMEs

providing professional, scientific and technical services. Our research shows that the

implemented strategies and the entrepreneurial behaviour adopted by the participants led

not only to their remaining on the market, but also to an increase in the business volume and

consequently to an increased turnover.

Key-words: crisis management, entrepreneurship, SMEs

1. Introduction

Present pieces of research in the field present on one hand, crisis management as a

newly developed management branch to be further developed whereas on the other

hand, SMEs management as a highly developed topic within the specialty literature

in the field of economic sciences. Thus, under such economic circumstances that

both entrepreneurs and managers focus more and more on crisis identification and

1 Transilvania University of Braşov, cristina.nicolau@unitbv.ro

Cristina NICOLAU

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forecast methods and techniques, there is necessary that they would elaborate the

best strategies so as their organizations survive within crisis periods of time.

This piece of qualitative research consists of two main parts which complete

one another in meeting our aim to describe the behaviour of SMEs providing

services from the Romanian Central Development Region (CRD): a piece of

descriptive qualitative research of this region (based on the interpretation of

secondary data taken from the National statistics Institute and from the county

statistics offices, aimed at presenting the business environment where companies

operate on and economic and social disparities among the six counties forming

CRD) presented in the first chapter and a piece of exploratory qualitative research

(on the market of professional, scientific and technical services as well as on the

SMEs’ behaviour within crisis) presented in the chapters 2-6.

2. The Business Environment Developed with SMEs’ Entrepreneurship

As regards the European Union, SMEs have a significant proportion, as it may be

observed from Table 1 below, them being considered by most specialists in the field

as the best and the simplest form of undertaking an economic activity. Micro-

enterprises which have, on the average, 2 employees, have 30% of the total number

of employees in the private field whereas small and middle-sized enterprises have

two thirds of the total number of employees in the private field. Erixon, 2009, 294

states that the average size of SMEs is of 4 employees.

No. of enterprises [th.] 2008 2009 2010 2011 2012

TOTAL 20,752 20,791 20,944 21,114 20,399

SMEs 99.80% 99.80% 99.80% 99.80% 99.80%

micro 91.80% 92.20% 92% 92.10% 92.1%

small 6.90% 6.50% 6.70% 6.60% 6.60%

middle-sized 1.90% 1.10% 1.10% 1.10% 1.10%

Table 1. Number of SMEs in the European Union, source: www.eurostat.eu

Furthermore, the observatory of European SMEs made in 2007 highlighted

the main issues that European SMEs confront with, presented as follows:

• exports: the main restraints are the lack of knowledge of foreign markets,

import tariffs in target countries and the lack of capital

• relocation / opening new subsidiaries in other regions: the geographic

proximity as supplier for other companies represents the main relocation

reason