Next Article in Journal
Psychological and Biographical Determinants of Entrepreneurial Intention: Does the Learning Environment Act as a Mediator?
Next Article in Special Issue
Innovation for Sustainable Entrepreneurship: Empirical Evidence from the Bioeconomy Sector in Poland
Previous Article in Journal
Bond Mutual Funds vs. Bond Exchange Traded Funds: Evaluation of Risk Adjusted Performance
 
 
Search for Articles:
Title / Keyword
Author / Affiliation / Email
Journal
Article Type
 
 
Advanced Search
 
Section
Special Issue
Volume
Issue
Number
Page
 
Journals
Administrative Sciences
Volume 9
Issue 2
10.3390/admsci9020032
admsci-logo
Submit to this Journal Review for this Journal Propose a Special Issue
► Article Menu

Article Menu

share Share announcement Help format_quote Cite question_answer Discuss in SciProfiles thumb_up
...
Endorse textsms
...
Comment
first_page
settings
Order Article Reprints
Font Type:
Arial Georgia Verdana
Font Size:
Aa Aa Aa
Line Spacing:
Column Width:
Background:
Article

Critical Success Factors of Small and Medium-Sized Enterprises in Saudi Arabia: Insights from Sustainability Perspective

by
Ahmad Al-Tit
1,*,
Anis Omri
1,2 and
Jalel Euchi
1,3
1
College of Business and Economics (CBE), Qassim University, Buraidah 15452, Saudi Arabia
2
Faculty of Economics and Management of Nabeul, University of Carthage, Carthage 1054, Tunisia
3
LOGIQ Laboratory, Sfax University, Sfax 3029, Tunisia
*
Author to whom correspondence should be addressed.
Adm. Sci. 2019, 9(2), 32; https://doi.org/10.3390/admsci9020032
Submission received: 7 March 2019 / Revised: 25 March 2019 / Accepted: 26 March 2019 / Published: 2 April 2019
(This article belongs to the Special Issue Sustainable Entrepreneurship: Theory, Research and Practical Applications)
Browse Figures
Versions Notes

Abstract

:
The aim of this study is to explore the critical success factors (CSFs) of small and medium-sized enterprises (SMEs) in Saudi Arabia. A questionnaire was developed using 28 factors/indicators identified from the previous researches. From 500 respondents, a total of 347 questionnaires were returned. By conducting exploratory factors analysis, these indicators were categorized into six factors, namely: Individual factors, business characteristics, management factors, business support, capital availability and business environment. Using IBM SPSS and AMOS, the results indicated that business support was the most critical factor that significantly affects the success of SMEs in Saudi Arabia, followed by individual factors, capital availability, and management factors. They also indicated that business characteristics and business environment factors had no significant impacts on the success of these enterprises.

1. Introduction

Small and medium-sized enterprises (SMEs) play an important role in the modern economy. What determines their success of SMEs is a topic of much academic debate. Scholars from various disciplines agreed on the importance of SMEs success in employment, wealth, and social and economic development (e.g., Autio 2005; Omri and Ayadi-Frikha 2014; Omri et al. 2015). According to Pletnev and Barkhatov (2016), SMEs contribute approximately 56% of the gross domestic product (GDP) of many European countries (Muller et al. 2017). Similarly, Abdullahi et al. (2015) cited additional factors that explain the importance of SMEs, such as communities’ empowerment, poverty alleviation and employment opportunities provision.
In fact, the factors that determine their success have increasingly drawn the attention of scholars, practitioners, and policy makers. A review of the peer reviewed literature on critical success factors (CSFs) showed that these factors have been and continue to be the focus of many researchers in several areas, such as CSFs for business start-ups in several countries, such as China and Malaysia (Watson et al. 1998; Huang et al. 2011; Chong 2012; Chawla et al. 2010; Omri et al. 2015; Pletnev and Barkhatov 2016; Lampadarios et al. 2017), total quality management (Yusof and Aspinwall 1999, 2000), business intelligence implementation (Olszak and Ziemba 2012), business models for sustainability of food and beverage companies in Netherlands (Long et al. 2018), women-owned small and medium-sized enterprises in UAE (Gupta and Mirchandani 2018), environmental manufacturing (Jabbour et al. 2018), adoption of e-commerce by SMEs in Nigeria (Agwu and Murray 2015), implementation of lean six sigma (Laureani and Antony 2018), implementation of business intelligence in SMEs in Poland (Olszak and Ziemba 2012). In a parallel bundle of the literature, scholars examined CSFs for micro, small and medium sized enterprises in the Kingdom of Saudi Arabia (KSA) either in general (Zamberi 2012) or in different areas like knowledge management (Migdadi 2009), e-commerce (Al-Ghamdi et al. 2011; Sin et al. 2016), technology transfer (Merdah and Sadi 2011), CSFs of enterprise resource planning (Aldayel et al. 2011), business marketing (Sadi and Iftikhar 2011), computer technology acceptance (Al-Gahtani 2004).
The importance of theoretical research to provide a conceptual framework for the success factors of SMEs to help investors, entrepreneurs and small business finance organizations and government institutions to adopt a strategy that contributes to enhancing the success of small projects and protecting them from managerial problems and financial failure, as well as directing the local community institutions to support these projects. The research is also important in presenting a model that explains the impact of critical success factors of SMEs in Saudi Arabia, thus providing a model adapted to the Saudi environment, which may serve as a starting point for conducting further researches. The main objective of this study is to identify the success factors of SMEs that contribute to sustainable development in Saudi Arabia by exploring the CSFs of 347 SMES by using structural equation modeling. To the best of our knowledge, none previous researches have used 28 indicators, which are categorized into six factors, namely: Individual factors, business characteristics, management factors, business support, capital availability and business environment, on the success of SMEs in Saudi Arabia.
The rest of the paper is organized as follows. Section 2 discusses the related literature of CSFs for small-sized enterprises. Section 3 discusses the research method. Section 4 describes our sample and variables. Section 5 presents and discusses the empirical results. Section 6 concludes and formulates some managerial recommendations.

2. Success Factors of SMEs: A Review of Literature

There has been a series of previous studies aimed at detecting the critical success factors of SMEs. For instance, Chawla et al. (2010) considered CSFs of small business in China and the USA, and found that small business in China are subject to several success factors related to marketing, competitive forces, industry trends, location, capital availability, and owner experience. Their study exhibited similarities between small business in China and the USA, except for the business-financing factor. In case of SMEs in Malaysia, Chong (2012) investigated the CSFs and he identified that managerial skills, government support, training, access to capital, marketing, customer service, competitive prices, human resource management, social skills, location, family and friends support are the key success factors. For a developing country, Ng and Kee (2012) identify the CSFs for SMEs, such as leadership and management, intellectual capital, organizational innovation, entrepreneurial characteristics and competence, human resource, motivation and market orientation. In addition, Nikolić et al. (2015) classified all factors that attribute to SMEs success into two groups: Individual factors and non-individual factors. Individual factors cover entrepreneur characteristics, such as owner and manager skills, personal characteristics, gender and motivation, while non-individual factors refer to internal (marketing, ability to compete, technology, innovation) and external factors (limited finance, market conditions, intensive competition).
In their mixed-method research paper, Omri et al. (2015) investigated factors that affect small business success using data from Tunisian micro-enterprises and concluded that innovation activities of micro-enterprises significantly mediated the effect of human, social, and financial capital on small business success. Moreover, Lampadarios et al. (2017) categorized the CSFs for SMEs into three factors: Entrepreneurial factors (owner age, gender, education level, experience and managerial skills), enterprise factors (business age and size, business networks, financial resources, customer relationship management; human capital, marketing and strategic planning) and business environment factors (political, economic, socio-cultural, technological, legal, and ecological environments).
Other veins in the literature examined CSFs for adopting and implementing several constructs. For instance, Yusof and Aspinwall (1999) studied CSFs of total quality management (TQM) for SMEs and proposed ten factors cover management leadership, continuous improvement system, employee education and training, supplier quality management, measurement and feedback, systems and processes, human resource management, resources, work environment and culture, along with tools and techniques. Olszak and Ziemba (2012) have also studied the CSFs for business intelligence implementation in SMEs and identified seven CSFs: Management commitment and support, a clear strategic vision, business-centric championship and a balanced team composition, business-driven and iterative development approach, change management, sustainable data quality and integrity, and business-driven, scalable, and flexible technical framework. In a study conducted by Wong (2005) on CSFs of knowledge management (KM) implementation, eleven CSFs were proposed: Management leadership and support, organizational culture, information technology, well-planned strategy, knowledge management measurement, organizational infrastructure, processes and activities of knowledge management, training, motivation, human and financial resources, as well as human resource management. Using data collected for respondents selected from SMEs in Nigeria, Abdullahi et al. (2015) found that financial needs, infrastructure and employee training were positively related to SMEs performance. In case of India, Vyas et al. (2015) determined CSFs of SMEs in banking in India: Supportive organizational factors, rapid delivery and response to customers, marketing, banking model and policy, and improved customer service. In Russia, Pletnev and Barkhatov (2016) indicated that SMEs are affected by CSFs like employee professional and personal qualities, relations with customers and suppliers, entrepreneurial skills of the top executives, wages, as well as manager’s social responsibility.
In Saudi Arabia, Migdadi (2009) explored CSFs for knowledge management in SMEs and highlighted the following factors: Management leadership and support, culture, information technology, strategy, measurement, organizational infrastructure, processes, motivational aids, resources, human resource management, customer satisfaction and external relations. Alshagawi (2015) conducted analytical research of strategies for the women entrepreneurship success. The results determine the success factors: Family support, hard work, managerial skills and good customer service, and business knowledge. Small and medium-sized enterprises still need to be analyzed. Alshumaimri and Almohaimeed (2014) note that financial and administrative support for small and medium-sized enterprises must be provided, especially in the high failure rate. On the other hand, Mahdi (2014) identified a study aimed at identifying the requirements of entrepreneurship in Saudi Arabia by deepening the belief in business values and ethics to improve the social culture. The main objective of this study is to identify the success factors of SMEs that contribute to sustainable development in Saudi Arabia.

3. Research Method and Hypotheses Development

3.1. Instrument

Prior to gathering research data, a questionnaire was developed using CSFs found in the literature. A total of 52 CSFs for small and medium-sized business success were identified and included in a questionnaire in order to identify the importance of these factors. Adapting the method used by Wong (2005), the questionnaire was anchored using 5-point Liker from 1 (not successful), 2 (slightly successful), 3 (moderately successful), 4 (successful), to 5 (very successful). Responses with 1 and 2 were regarded as poor, responses with 3 were satisfactory, while responses with 4 and 5 were deemed good. Refining the questionnaire in light of academics and practitioners’ modifications resulted in 42 CSFs with satisfactory and good scores.

3.2. Factor Analysis

The forty-two factors identified by the group of academics and practitioners were explored via principal component analysis. The results depicted in Figure 1, which is a scree plot of components number and eigenvalue values, showed that six components were extracted with Eigenvalues greater than 1 (Kaiser 1960 cited in Hayton et al. 2004), since factors with Eigenvalues less than 1 were excluded because those factors account for no more variance (Terwee et al. 1998).
Using principal component analysis as an extraction method, as well as varimax with Kaiser normalization as a rotation method, the six components that extracted explained, as shown in Table 1, about 87% of the total variance.
The results reported in Table 1 indicated that component 1 (individual factor) explained about 53% of the total variance, followed by component 2 (business characteristics), which explain about 12% of the total variance. Furthermore, component 3 (management factor) was accounted for 8% of the total variance, in comparison with component 4 (business support) that accounted for 6% of the total variance explained. Component 5 (capital availability) explained about 5% of the total variance and component 6 (business environment) explained about 4% of the total variance. Table 2 indicated that all factor loadings of the six components were ranged from 0.711 to 0.962. Factor loadings of individual factor items (ITEM1-ITEM5) ranged from 0.776 to 0.962, business characteristics items (ITEM6-ITEM9) ranged from 0.791–0.901, management factor items (ITEM10-ITEM17) ranged from 0.739 to 0.898, business support items (ITEM18-ITEM20) ranged from 0.722 to 0.776, capital availability items (ITEM21-ITEM23) ranged from 0.746 to 0.968, and finally, business environment items (ITEM24-ITEM28) ranged from 0.711 to 0.884. It was noted that all factor loadings were higher than 0.50 (Luarn and Lin 2005). Acceptable factor loadings were regarded as a key condition for obtaining a good model (Ullman and Bentler 2012).

3.3. Reliability and Validity

Reliability was measured based on composite reliability (CR) and validity was tested by convergent validity using the average variance extracted (AVE). CR for all factors, as can be seen in Table 2, were greater than 0.70. CR values from 0.60–0.70 in exploratory factor analysis are satisfactory, and AVE values were greater than 0.50 (Hair et al. 2011; Al-Tit 2017). Therefore, the reliability and validity criteria were met.

3.4. Hypotheses Development

Based on the above-mentioned analysis, six critical success factors were identified: Individual factors, business characteristics, management factors, business support, capital availability and business environment. In order to investigate the effects of these factors on the success of small-sized enterprises, it was hypothesized that these success factors are positively related to small-sized enterprises success. Rose et al. (2006) studied entrepreneurs success factors in small and medium-sized enterprises in Malaysia and found that education level of the owner or manager, as one item of the individual’s factors, had a positive relationship with business success. Kubickova and Prochazkova (2014) mentioned some success factors related to business environments, such as legal factors, individual factors, such as owner or manager experience. According to Al-Mahrouq (2010), there are five factors that contribute to the success of the small and medium-sized enterprises in Jordan, which are technological factors, firm’s structure, financial structure, marketing and productivity, as well as human resource structure. In a study on Russian SMEs by Pletnev and Barkhatov (2016), individual factors, i.e., personal qualities and management factors, such as social responsibility were regarded as key success factors. Radzi et al. (2017) indicated that the success of small businesses is related to entrepreneurial competency and technology usage. For Lussier and Corman (1995), business experience and use of professional advisors were key drivers of business success. Lampadarios et al. (2017) highlighted the importance of entrepreneurial factors, enterprise factors and business environment factors as success factors of small and medium-sized enterprises. In a study in the tourism industry in Saudi Arabia, Sadi and Iftikhar (2011) examined CSFs of marketing in small and medium-sized enterprises. Their results underlined that customer orientation and marketing planning were important factors while Internet usage and personal or social networks have no effect in this context. Referring to Table 1, numerous CSFs that positively related to the success of small enterprises. On the basis of the literature, the following hypotheses were proposed:
Hypothesis 1.
Individual factors are positively related to small-sized enterprises success.
Hypothesis 2.
Business characteristics are positively related to small-sized enterprises success.
Hypothesis 3.
Management factors are positively related to small-sized enterprises success.
Hypothesis 4.
Business support is positively related to small-sized enterprises success.
Hypothesis 5.
Capital availability is positively related to small-sized enterprises success.
Hypothesis 6.
Business environment is positively related to small-sized enterprises success.

4. Research Sample

The population of this study consisted of small-sized enterprises that receive funds from The Centennial Fund, Baader Foundation and The Saudi Fund for Development, since they are the most significant financers of these businesses in Saudi Arabia during 2016. About 500 participants were randomly selected as a research sample in order to collect data on CSFs and business success. Five hundred questionnaires were distributed and 347 were returned.
Table 3 shows CSFs that used in the current study. Five items were used to measure individual factors, four factors were used to measure business characteristics, and eight factors were used to measure management factors. Three items for each factor measure both business support and capital availability. Business environment was measured using five items. References to these factors can be seen in Table 1. Business success was measured by asking respondents to rank their business success based on six items adopted from Radzi et al. (2017, p. 43). The questionnaire consisted of 28 items.

5. Results and Discussion

5.1. Confirmatory Factor Analysis

The results of exploratory factor analysis were confirmed using confirmatory factors analysis (CFA). As exhibited in Figure 2, six factors were loaded on 25 items forming a well-fitted measurement model. Factor 1 (Individual factors) is related to four items (1, 3, 4 and 5), factor 2 (business characteristics) is linked with three items (6, 7 and 8), factor 3 (management factors) is connected with eight items (10–17), factor 4 (business support) is associated with three items (18–20). Moreover, an association between factors 5 (capital availability) and three items (21–23) was established, as well as between factor 6 (business environment) and four items (24, 25, 26 and 28). The measurement model fit summary asserted that this model fit the data well (Number of Parameters NPAR = 67, Chi-Square Value CMIN = 384.751, Degrees of Freedom DF = 258, p = 0.000, CMIN/DF = 1.491, Comparative Fit Index GFI = 0.919, Adjusted Goodness of Fit AGFI = 0.898, Normed Fit Index NFI = 0.939, Comparative Fit Index CFI = 0.979, Root Mean Square of Error Approximation RMSEA = 0.038).

5.2. Structural Model

Based on the results of CFA in which three items were removed, the structural model was developed as can be seen in Figure 3. It was revealed that factor 1 (individual factors) had a significant effect on small-sized enterprises success (ß = 0.157, S.E. = 0.063, CR = 2.484, p = 0.013), factor 3 (management factors) had a significant effect on small-sized enterprises success (ß = 0.105, S.E. = 0.043, CR = 2.429, p = 0.015) and factor 4 (business support) had a significant effect on small-sized enterprises success (ß = 0.289, S.E. = 0.046, CR = 6.257, p = 0.000), as well factor 5 (capital availability) had a significant effect on small-sized enterprises success (ß = 0.131, S.E. = 0.063, CR = 2.090, p = 0.037). On the other hand, factor 2 (business characteristics) had no significant effect on small-sized enterprises success (ß = 0.002, S.E. = 0.049, CR = 0.039, p = 0.969) and factor 6 (business environment) had no significant effect on small-sized enterprises success (ß = 0.047, S.E. = 045, CR = 1.054, p = 0.292). These results are summarized in Table 4.
The results in Table 4 confirm that four hypotheses out of six were supported. Hypotheses H1, H3, H4 and H5 were supported and hypotheses H2 and H6 were rejected. That is, individual factors, management factors, business support and capital availability had significant effects on small-sized enterprises success, while business characteristics and business environment had no such effects.
The most important factors that affect the success of small and medium-sized in Saudi Arabia were those related to business support, such as financial support, government support, and family and friends support. These results were in agreement with Chong (2012). Those factors were followed by individual factors, such as entrepreneur age, skills and business skills, use of professional advisors and personal financial needs were the most critical individual factors that affect the success of small business. Similar findings were echoed by Chawla et al. (2010), Chong (2012), Ng and Kee (2012), Nikolić et al. (2015), Migdadi (2009), Pletnev and Barkhatov (2016), Hazudin et al. (2015), Rose et al. (2006) and Lampadarios et al. (2017) with their emphasis on entrepreneurial characteristics as CSFs of business success. Capital availability in terms of financial capital, human capital and social capital ranked third as critical factors that have significant effects on small-sized enterprises success.
These results are in line with Chawla et al. (2010), Omri et al. (2015), Migdadi (2009), Vyas et al. (2015). The results indicated that management factors, like management commitment and support, organizational infrastructure, human resource management practices, organizational culture, work environment, internal communication, corporate social responsibility and information technology, ranked last in terms of their effect on small-sized enterprises success. Same results were reported by Chong (2012), Ng and Kee (2012) and Wong (2005). Finally, the results found that business characteristics, e.g., business size, business networks, business innovation and ability to compete, as well as business environment factors, such as economic, technological, legal, socio-cultural and ecological factors have no effect on the success of small and medium-sized enterprises. Sadi and Iftikhar (2011) cited that personal or social networks have no effect on the success of small and medium-sized enterprises in Saudi Arabia. Differently, Lampadarios et al. (2017) and Kubickova and Prochazkova (2014) regarded business environment factors, such as political, economic, socio-cultural, technological, legal, and ecological environments as CSFs of business success.

6. Conclusions

An expansive review of the literature of small and medium-sized CSFs uncovered 52 factors. Refining these factors based on suggestions of a group of academics produced a list incorporated a total of 42 factors. The initial results reveal that 28 factors out of the 42 factors were perceived as CSFs for small and medium-sized enterprises. The results of the exploratory factor analysis showed that the 28 factors were loaded on six factors. Those factors were labeled as individual factors, business characteristics, management factors, business support, capital availability and business environment. In order to achieve the objective of the study, a questionnaire was developed based on these 28 factors and distributed to a sample of respondents from small and medium-sized enterprises that receive funds from The Centennial Fund, Baader Foundation and The Saudi Fund for Development, since they are the most significant financers of these businesses in Saudi Arabia during 2016. The confirmatory factor analysis in light of goodness-of-fit statistics confirmed that the six factors can be measured well using 25 items. Hence, the structural model was developed based on these 25 items. Significantly, the results of our study evinced that four factors out of the six factors studied were critical to the success of small and medium-sized enterprises in the KSA, which were individual factors, management factors, business support and capital availability.
In fact, all CSFs studied in the current study can be regarded as important factors that positively affect the success of small and medium businesses. However, the interlocked nature of these factors makes some of them more important. For example, ecological factors as a key factor in the business environment can be practiced through corporate social responsibility, social factors are supported by family and friends support, as well as social capital as factors related to business support and the capital itself.
On the basis of these results, it was concluded that small-sized enterprises in Saudi Arabia are subject to the support provided by the Centennial Fund, Baader Foundation and The Saudi Fund for Development in the first place. Secondly, those enterprises are dependent on entrepreneurial characteristics, such as age, skills and personal financial needs. In the third place, capital as measured by financial, human, and social capital is a key success factor for those enterprises, in addition to management factors.
On that account, Saudi policy makers are required to look upon the continuance of financial support provided by the Centennial Fund, Baader Foundation and The Saudi Fund for Development. Moreover, the selection of business owners who are applicants to receive the above-mentioned financial support should also consider the personal characteristics of those applicants, such as age and business experience. Policy makers also should introduce a new notion regarding pre-training of business owners to acquire management and related skills before they start-up their business. In-service entrepreneurs ought to receive simultaneous professional consultations on their businesses.
The most meaningful limitation of this study is related to the cross-sectional sampling design and to respondents chosen from small-sized enterprises that receive funds from The Centennial Fund, Baader Foundation, and The Saudi Fund for Development. Further studies are required to include more respondents (e.g., private enterprises), using longitudinal research design in order to make these results general and applicable for all small and medium-sized enterprises in Saudi Arabia.

Author Contributions

A.A.-T., A.O. and J.E. conceptualization; Methodology, Validation, and Funding Acquisition, A.A.-T., formal analysis, and Project management, A.A.-T.; A.O., Writing: draft, A.A.-T.; J.E., Writing: revision and editing.

Funding

This research was funded by the Deanship of Scientific Research in Qassim University, Buraidah, Saudi Arabia.

Acknowledgments

The authors would like to thank the respondents who participated in this research. They would also like to thank the Deanship of Scientific Research in Qassim University, Buraidah, Saudi Arabia.

Conflicts of Interest

The authors declare no conflict of interest.

References

  1. Abdullahi, Mohammed Sani, Puspa Liza Ghazali, Zainudin Awang, Izah Mohd Tahir, and Nor Azman Mat. 2015. The effect of finance, infrastructure and training on the performance of small and medium scale enterprises (SMEs) in Nigeria. International Journal of Business and Technopreneurship 5: 421–52. [Google Scholar]
  2. Agwu, Edwin, and Peter J. Murray. 2015. Empirical study of barriers to electronic commerce adoption by Small and Medium scale businesses in Nigeria. International Journal of Innovation in the Digital Economy 6: 1–19. [Google Scholar] [CrossRef]
  3. Aldayel, Abeer I., Mashael S. Aldayel, and Al-A. Mudimigh. 2011. The critical success factors of ERP implementation in Higher Education in Saudi Arabia: A case study. Journal of Information Technology & Economic Development 2: 1–16. [Google Scholar]
  4. Al-Mahrouq, Maher. 2010. Success factors of small and medium-sized enterprises (SMES): The case of Jordan. Anadolu University Journal of Social Sciences 10: 1–16. [Google Scholar]
  5. Al-Ghamdi, Rayed, Steve Drew, and Waleed Al-Ghaith. 2011. Factors influencing e-commerce adoption by retailers in Saudi Arabia: A qualitative analysis. The Electronic Journal of Information Systems in Developing Countries 47: 1–23. [Google Scholar] [CrossRef]
  6. Al-Gahtani, Said S. 2004. Computer technology acceptance success factors in Saudi Arabia: An exploratory study. Journal of Global Information Technology Management 7: 5–29. [Google Scholar] [CrossRef]
  7. Alshagawi, Mohammed. 2015. Assessing Women Entrepreneurship in Saudi Arabia: Strategies for Success. Ajman Journal of Studies and Research 14: 155–85. [Google Scholar]
  8. Alshumaimri, Ahmed, and Ahmed Almohaimeed. 2014. The Reality of Funding Entrepreneurship Projects in Saudi Arabia The Perspective of Entrepreneurs. Paper presented at Saudi International Entrepreneurship Conference, Riyadh, KSA, September 9–11; pp. 84–103. [Google Scholar]
  9. Al-Tit, Ahmad. 2017. Factors Affecting the Organizational Performance of Manufacturing Firms. International Journal of Engineering Business Management 9: 1–9. [Google Scholar] [CrossRef]
  10. Autio, Erkko. 2005. Global Entrepreneurship Monitor. In Report on High-Expectation Entrepreneurship. London: GEM. [Google Scholar]
  11. Chawla, Sudhir K., Dan Khanna, and Jin Chen. 2010. Are small business critical success factors same in different countries. SIES Journal of Management 7: 1–12. [Google Scholar]
  12. Chong, Wei Ying. 2012. Critical success factors for small and medium enterprises: Perceptions of entrepreneurs in urban Malaysia. Journal of Business and Policy Research 7: 204–15. [Google Scholar]
  13. Gupta, Namrata, and Anita Mirchandani. 2018. Investigating entrepreneurial success factors of women-owned SMEs in UAE. Management Decision 56: 219–32. [Google Scholar] [CrossRef]
  14. Hair, Joe F., Christian M. Ringle, and Marko Sarstedt. 2011. PLS-SEM: Indeed a silver bullet. Journal of Marketing Theory and Practice 19: 139–52. [Google Scholar] [CrossRef]
  15. Hayton, James C., David G. Allen, and Vida Scarpello. 2004. Factor retention decisions in exploratory factor analysis: A tutorial on parallel analysis. Organizational Research Methods 7: 191–205. [Google Scholar] [CrossRef]
  16. Hazudin, Siti Fahazarina, Mohd Aidil Riduan Awang Kader, Nor Habibah Tarmuji, Maisarah Ishak, and Roslina Ali. 2015. Discovering small business startup motives, success factors and barriers: A gender analysis. Procedia Economics and Finance 31: 436–43. [Google Scholar] [CrossRef]
  17. Huang, Hung Chen, Kestutis Bruzga, and Ya Ping Wang. 2011. Business key success factors in China and the West. African Journal of Business Management 5: 9363–69. [Google Scholar]
  18. Jabbour, Ana Beatriz Lopes de Sousa, Charbel Jose Chiappetta Jabbour, Cyril Foropon, and Filho Moacir Godinho. 2018. When titans meet—Can industry 4.0 revolutionize the environmentally-sustainable manufacturing wave? The role of critical success factors. Technological Forecasting and Social Change 132: 18–25. [Google Scholar] [CrossRef]
  19. Kubickova, Lea, and Lenka Prochazkova. 2014. Success Evaluation of Small and Medium-Sized Enterprises in Terms of Their Participation in the Internationalization Process. E&M Ekonomie a Management 14: 66–76. [Google Scholar]
  20. Lampadarios, E., N. Kyriakidou, and G. Smith. 2017. Towards a new framework for SMEs success: A literature review. International Journal of Business and Globalization 18: 194–232. [Google Scholar] [CrossRef]
  21. Laureani, Alessandro, and Jiju Antony. 2018. Leadership: A critical success factor for the effective implementation of Lean Six Sigma. Total Quality Management & Business Excellence 29: 502–23. [Google Scholar]
  22. Long, Thomas B., Arnold Looijen, and Vincent Blok. 2018. Critical success factors for the transition to business models for sustainability in the food and beverage industry in the Netherlands. Journal of Cleaner Production 175: 82–95. [Google Scholar] [CrossRef]
  23. Luarn, Pin, and Hsin-Hui Lin. 2005. Toward an understanding of the behavioral intention to use mobile banking. Computers in Human Behavior 21: 873–91. [Google Scholar] [CrossRef]
  24. Lussier, Robert N., and Joel Corman. 1995. There are few differences between successful and failed small businesses. Journal of Small Business Strategy 6: 21–34. [Google Scholar]
  25. Mahdi, Saifuddin. 2014. Requirements and Challenges of Entrepreneurship in Saudi Arabia. Paper presented at Saudi International Entrepreneurship Conference, Riyadh, Saudi Arabia, September 9–11; pp. 105–20. [Google Scholar]
  26. Merdah, Walid Omar Awad, and Muhammad Asad Sadi. 2011. Technology transfer in context with Saudi Arabian small-medium enterprises. International Management Review 7: 30–37. [Google Scholar]
  27. Migdadi, Mahmoud. 2009. Knowledge management enablers and outcomes in the small-and-medium sized enterprises. Industrial Management & Data Systems 109: 840–58. [Google Scholar]
  28. Muller, Patrice, Daniel Herr, Sean McKiernan, Viktoriya Peycheva, Karen Hope, Laura Koch, and Jenna Julius. 2017. Annual Report on European SMEs 2016/2017: Focus on Self-Employment. London: European Commission. [Google Scholar]
  29. Ng, Hee Song, and Daisy Hui Hung Kee. 2012. The issues and development of critical success factors for the SME success in a developing country. International Business Management 6: 680–91. [Google Scholar] [CrossRef]
  30. Nikolić, Nenad, Zhaklina Dhamo, Peter Schulte, Ivan Mihajlović, and Vasilika Kume. 2015. An analysis of factors affecting failure of SMEs. Paper presented at 11th International May Conference on Strategic Management—IMKSM2015, Bor, Serbia, May 29–31; pp. 160–80. [Google Scholar]
  31. Olszak, C., and E. Ziemba. 2012. Critical success factors for implementing business intelligence systems in small and medium enterprises on the example of upper Silesia, Poland. Interdisciplinary Journal of Information, Knowledge, and Management 7: 129–50. [Google Scholar] [CrossRef]
  32. Omri, Anis, and Maha Ayadi-Frikha. 2014. Constructing a mediational medel of small business growth. International Entrepreuneurship an Management Journal 10: 319–42. [Google Scholar] [CrossRef]
  33. Omri, Anis, Maha Ayadi-Frikha, and Mohamed Amine Bouraoui. 2015. An empirical investigation of factors affecting small business success. Journal of Management Development 34: 1073–93. [Google Scholar] [CrossRef]
  34. Pletnev, D., and V. Barkhatov. 2016. Business success of small and medium sized enterprises in Russia and social responsibility of managers. Procedia-Social and Behavioral Sciences 221: 185–93. [Google Scholar] [CrossRef]
  35. Radzi, Khadijah Mohamad, Mohammad Nazri Mohd Nor, and Suhana Mohezar Ali. 2017. The Impact of Internal Factors on Small Business Success: A Case of Small Enterprises Under the Felda Scheme. Asian Academy of Management Journal 22: 27–55. [Google Scholar] [CrossRef]
  36. Rose, Raduan Che, Naresh Kumar, and Lim Li Yen. 2006. Entrepreneurs success factors and escalation of small and medium-sized enterprises in Malaysia. Journal of Social Sciences 2: 74–80. [Google Scholar] [CrossRef]
  37. Sadi, Muhammad Asad, and Qamar Iftikhar. 2011. Factors critical to the success of small-medium sized business marketing: A view from the tourism industry in Saudi Arabia. African Journal of Marketing Management 3: 226–32. [Google Scholar]
  38. Sin, Kit Yeng, Abdullah Osman, Shahrul Nizam Salahuddin, Safizal Abdullah, Yi Jin Lim, and Choon Ling Sim. 2016. Relative advantage and competitive pressure towards implementation of e-commerce: Overview of small and medium enterprises (SMEs). Procedia Economics and Finance 35: 434–43. [Google Scholar] [CrossRef]
  39. Terwee, Caroline B., Martin N. Gerding, Friedo W. Dekker, Mark F. Prummel, and Wilmar M. Wiersinga. 1998. Development of a disease specific quality of life questionnaire for patients with Graves’ ophthalmopathy: The GO-QOL. British Journal of Ophthalmology 82: 773–79. [Google Scholar] [CrossRef]
  40. Ullman, Jodie B., and Peter M. Bentler. 2012. Structural equation modeling. In Handbook of Psychology, 2nd ed. Edited by Irving B. Weiner. Hoboken: John Wiley & Sons, Inc. [Google Scholar]
  41. Vyas, Vishal, Sonika Raitani, Ankur Roy, and Priyanka Jain. 2015. Analysing critical success factors in small and medium enterprises banking. World Review of Entrepreneurship, Management and Sustainable Development 11: 106–23. [Google Scholar] [CrossRef]
  42. Watson, Kathryn, Sandra Hogarth-Scott, and Nicholas Wilson. 1998. Small business start-ups: Success factors and support implications. International Journal of Entrepreneurial Behavior & Research 4: 217–38. [Google Scholar]
  43. Wong, Kuan Yew. 2005. Critical success factors for implementing knowledge management in small and medium enterprises. Industrial Management & Data Systems 105: 261–79. [Google Scholar]
  44. Yusof, Sha’Ri Mohd, and Elaine M. Aspinwall. 1999. Critical success factors for total quality management implementation in small and medium enterprises. Total Quality Management 10: 803–9. [Google Scholar] [CrossRef]
  45. Yusof, Sha’Ri Mohd, and Elaine M. Aspinwall. 2000. Critical success factors in small and medium enterprises: Survey results. Total Quality Management 11: 448–62. [Google Scholar] [CrossRef]
  46. Zamberi, Syed. 2012. Micro, small and medium-sized enterprises development in the Kingdom of Saudi Arabia: Problems and constraints. World Journal of Entrepreneurship, Management and Sustainable Development 8: 217–32. [Google Scholar] [CrossRef]
Admsci 09 00032 g001 550
Figure 1. Scree plot of the components extracted.
Figure 1. Scree plot of the components extracted.
Admsci 09 00032 g001
Admsci 09 00032 g002 550
Figure 2. Results of confirmatory factors analysis (CFA).
Figure 2. Results of confirmatory factors analysis (CFA).
Admsci 09 00032 g002
Admsci 09 00032 g003 550
Figure 3. Results of the structural model.
Figure 3. Results of the structural model.
Admsci 09 00032 g003
Table
Table 1. Total variance explained by extracted components.
Table 1. Total variance explained by extracted components.
ComponentInitial Eigenvalues
Total% of VarianceCumulative %
122.08652.58652.586
25.13012.21464.800
33.3788.04472.843
42.4315.78978.632
51.9294.59383.225
61.6814.00387.228
Table
Table 2. Components factor loadings, average variance extracted (AVE) and composite reliability (CR).
Table 2. Components factor loadings, average variance extracted (AVE) and composite reliability (CR).
Factors123456AVECR.
ITEM10.823 0.800.953
ITEM20.909
ITEM30.943
ITEM40.928
ITEM50.876
ITEM6 0.860 0.800.942
ITEM7 0.918
ITEM8 0.902
ITEM9 0.899
ITEM10 0.951 0.880.984
ITEM11 0.939
ITEM12 0.952
ITEM13 0.932
ITEM14 0.946
ITEM15 0.904
ITEM16 0.951
ITEM17 0.945
ITEM18 0.854 0.770.910
ITEM19 0.889
ITEM20 0.890
ITEM21 0.941 0.910.967
ITEM22 0.967
ITEM23 0.950
ITEM24 0.9630.910.981
ITEM25 0.953
ITEM26 0.957
ITEM27 0.952
ITEM28 0.945
Table
Table 3. Items of the used variables.
Table 3. Items of the used variables.
FactorsItems Description
Individual factors ITEM1Owner/manager age
ITEM2Owner/manager education level
ITEM3Owner/manager business skills and experience
ITEM4Use of professional advisors
ITEM5Personal financial needs. e.g., improve living style
Business characteristics ITEM6Business size
ITEM7Business networks
ITEM8Business innovation
ITEM9Ability to compete
Management factors ITEM10Management commitment and support
ITEM11Organizational infrastructure
ITEM12Human resource management practices
ITEM13Organizational culture
ITEM14Work environment
ITEM15Internal communication
ITEM16Corporate social responsibility
ITEM17Information technology
Business support ITEM18Financial support
ITEM19Government support
ITEM20Family and friends support
Capital availability ITEM21Financial capital
ITEM22Human capital
ITEM23Social capital
Business environmentITEM24Economic factors
ITEM25Technological factors
ITEM26Legal factors
ITEM27Socio-cultural factors
ITEM28Ecological factors
Table
Table 4. Results of structural model.
Table 4. Results of structural model.
Hyp. No.PathßS.E.CRP
H1Individual factors → business success0.1570.0632.4840.013
H2business characteristics → business success0.0020.0490.0390.969
H3Management factors → business success0.1050.0432.4290.015
H4business support → business success0.2890.0466.2570.000
H5Capital availability → business success0.1310.0632.0900.037
H6business environment → business success0.0470.0451.0540.292

Share and Cite

MDPI and ACS Style

Al-Tit, A.; Omri, A.; Euchi, J. Critical Success Factors of Small and Medium-Sized Enterprises in Saudi Arabia: Insights from Sustainability Perspective. Adm. Sci. 2019, 9, 32. https://doi.org/10.3390/admsci9020032

AMA Style

Al-Tit A, Omri A, Euchi J. Critical Success Factors of Small and Medium-Sized Enterprises in Saudi Arabia: Insights from Sustainability Perspective. Administrative Sciences. 2019; 9(2):32. https://doi.org/10.3390/admsci9020032

Chicago/Turabian Style

Al-Tit, Ahmad, Anis Omri, and Jalel Euchi. 2019. "Critical Success Factors of Small and Medium-Sized Enterprises in Saudi Arabia: Insights from Sustainability Perspective" Administrative Sciences 9, no. 2: 32. https://doi.org/10.3390/admsci9020032

Note that from the first issue of 2016, this journal uses article numbers instead of page numbers. See further details here.

Article Metrics

Back to TopTop