SME Growth in a Recession

This study examines how a small and medium enterprise (SME) achieved growth in the recession of 2008-09. During the recessionary period, businesses in the UK faced a challenging environment with critical financial shortages and credit squeeze. SMEs, being generally more susceptible in the times of recession, were particularly badly affected. Undeterred by such a difficult economic condition, the case study firm was able to achieve substantial growth in the recession. Although there are a significant number of studies on the growth dynamics of SMEs, they either concentrate on the natural growth in the normal economic situation, study large businesses or use large-scale data to examine SME performance in a recession. Surprisingly, little exploratory studies focused on the SME growth in a recession are found. This research addresses such gap in the literature through an in-depth study of a successful business in a recession. To do so, this study used plural methods to examine the business growth. It employed the participant action research as the main approach, case study as a design and mixed methods as a strategy to collect and analyse the data. It used both quantitative and qualitative data from primary and secondary sources to analyse the business performance and identify the growth-making factors. This study found that contextual strategies help SMEs to sustain and grow in a financially turbulent period. The case study firm implemented three management strategies – learning in the organisation, restructuring the organisation and customer-focus – to achieve business performance in the recession of 2008-09. The firm implemented these strategies and associated organisation-works by contextualising and making them ‘fit for the organisation’. All these strategies and organisation-works have a combined impact on the business performance. The outcome of this research, thus, suggests that SMEs may achieve business performance by implementing contextual strategies and associated organisation-works in a systematic way.