Competitiveness development in SMEs in Mexico.

Important points of the Pact for Mexico are about employment and businesses in the country. The development of both is essential for stability and growth. In Mexico SMEs they are an important basis that contribute to development and job creation, but this has been a problem since we have not been reached optimal levels. As time passes it will disappear companies and some that will remain for years but without generating new jobs. So it arises an opportunity for those young professionals to support these businesses and make them grow. The aim of this essay is to show the problem presented to micro enterprises, small and medium to grow and be competitive in a proper way without falling into bad practices. It is important to raise the issue of the social responsibility of companies, regardless of size, and to seek growth by any means could cause negatively affect the stakeholders, so that its development should go hand in hand leaders and ethical professionals. This subject is related to the race management since the creation and organizational development of enterprises are a basis for future competitive growth, and a way to address the problems of development is through the professionalization of SMEs.
Critical analysis of reality

A social problem that is facing Mexican society is that growth in the economy was very low in 2012 with 3.9% (World Bank, 2013). This has not been enough to support and create a favorable environment for SMEs have achieved a positive development and enable them to be competitive in a market that is becoming increasingly difficult. Therefore, it has created the need to achieve and maintain a stable growth for SMEs contribute to economic development of the country and can generate wealth for the owners, but where it takes more important how this growth will be achieved. The growth of SMEs could be messy if you do not act ethically in making management decisions and consequently affect society. The country is basically SMEs representing 99.7% of the 5.1 million companies, where micro-enterprises generate 41% of national employment and 48% of GDP. (CNN Expansion, 2013). The competitiveness of any company rests on what the allocation of resources available to the same well as the way that the company coordinate and interrelate generating “capacity”. (Ruiz, 2011). Hard, small and medium-sized enterprises have the opportunity to invest in improving those capabilities that allow them to grow, due to the limitations they have. The lack of competitiveness of SMEs is due to high operating costs that result from the high prices of raw, energy and materials imported products. Also by low bargaining power with both their suppliers and the market sector in which it operates, because purchase volumes are reduced in general, limiting volume discounts, and low production scale limits access larger and more profitable markets. The technological backwardness of SMEs is due to operating with outdated and inadequate to compete in national and international markets that demand increasingly higher standards of value-added technology. Finally, another obstacle is the low level of training as they have many opportunities to keep current employees in matters of operations, planning, innovation and creativity (CNN Expansion, 2010). SMEs do not have many of the resources needed to develop a full and exist in the country large problems that greatly affect. Among the problems of small and medium enterprises we can highlight their technology investments, infrastructure, security, among others, are 0.5% and 0.7% respectively, stagnating their own growth. Other data that impact the current situation of SMEs are that out of 100 companies created, 90 do not reach the 2 years, with an index of the highest mortality (Copes, 2008).

Identification dilemma

The ethical dilemma of SME development lies with the duty to be a business. Corporate profitability is a simple equation between revenues and expenditures where economic benefit is for shareholders or owners, but can mistakenly think so. It may also include the benefit to workers’ rights, but should also take into account the interests of the quality demanded by customers and sustainable development for the communities where it is located. Social responsibility responds to a conception of the company as a social institution that has a goal, meet human needs and a concrete means to do so: the economic benefit (Garcia, 2007). What profit is generated should be the means to bring all stakeholders involved or the company to maximize its benefit to achieve well-being. However, with the aforementioned obstacles that stop the competitiveness of SMEs, it generates a crossroads for their leaders where they can take the road of seeking higher performance no matter what damage they may cause, or have social responsibility practices to improve their environment productive. In itself, the greatest difficulties of SMEs are not utilities to improve equipment and types of production are reinvested, it is difficult to hire staff trained not to pay high wages, production quality has shortcomings because the quality controls are minimal leakage personnel trained for lack of retention, insufficient sales, competitive weakness, tax problems or poor service. (Pro Mexico 2013) So the dilemma lies in how resources should be used to generate wealth to the owners, but without leaving aside the investment in improving competitiveness, which ultimately benefit the stakeholders.
Possible alternative solutions

An alternative solution mentioned to improve the competitiveness of SMEs is to seek its professionalization. There is the case of development companies have had San Jose State in Uruguay. In an interview with Mercedes Ant铆a, responsible for the distribution in the Departmental Government of San Jose, it clarifies that such professionalization is one of the objectives of the government. “We have been working for many years with different tools to support SMEs because we have found that many are started from an idea, a trade known or a skill you have; and then you have to professionalize the company so you can keep going. That we have made an important way and there is still much to do, although is with great satisfaction that San Jose has received major companies, foreign investments not only generate direct employment but have also had a very positive impact on SMEs that are their suppliers of products or services. That has allowed them a development that now stands before the challenge of having to do quality certification to continue selling. This generates a very important own growth “(First Time, 2013). In Mexico, state governments could focus on providing tools or facilitate them, so that SMEs can improve their processes and set an appropriate way to reach this professionalization, as the case in Uruguay. The importance of professionalizing internal processes ranging from defining each process for a group activities so that they can be establishing specific areas, starting to have a global vision of the company to help plan the optimal growth of the same (Vargas , 2013). In this way they would be optimized in time, cost, materials and workmanship, having standardized processes that are routine.

Some of the areas of opportunity is to promote entrepreneurship among young people and graduates incorporate SMEs to generate the professionalization of the company. Universities have the vision to create professionals that are competitive in any industry, but the constant changes of a dynamic society require skilled people to be able to innovate, generate social development, a global vision, a commitment to sustainability and especially greater ethics and social sensitivity. According to research by Dr. Manjusmita Dash Department of Business Administration of the University of Utkal in India, it mentions that entrepreneurship in young people has gained greater importance because it opens a way to boost economic competitiveness and promote regional development . (Dash 2012) Search greater participation by young entrepreneurs can be critical to the country’s development, so it is necessary to encourage through programs that encourage older.
One way to encourage SMEs is through the implementation of schemes of a Socially Responsible Company, as it seeks to focus on SMEs in the European Union.

Perhaps you may think that supporting donations, or create great social benefits are campaigns for large companies with resources, but also can be used to enhance SMEs. The problem with being a socially responsible company is that you can not measure short-term key indicators to measure their return in the short term. As an SME company with socially responsible approach can influence positively in several respects. One is the improvement of products and production processes, resulting in increased customer satisfaction and loyalty. Another is a greater motivation and loyalty of employees, increasing their creativity and innovation. Improve the public image also can generate prizes and a greater knowledge of the company in the community. Similarly it creates a better position in the labor market and better interaction with business partners and authorities. In addition to cost savings and increased profitability due to greater efficiency in the use of human resources (European Commission, 2005). These results will be obtained only if the benefit in the long term and not short-term welfare seeks. The commitment of business ethics is a business model that social institution is known and it is aware that only taking into account in its decisions to all groups involved in the running of the company, you can achieve the confidence to search the long run. (Garcia, 2007). Be ethical as a company can bring the benefits already mentioned, but the fact of what should be a company’s human duty that should govern their leaders.

There is a high correlation between competitiveness and a sustainable society, where higher levels of competitiveness high levels of economic growth occur and therefore the prosperity of societies, increasing the welfare of citizens, who will consume more goods and services (Schwab, 2013). It is suggested to SMEs to find that competitiveness in the market is thought to be a socially responsible company, since this will achieve a better picture than the benefit in the value chain with either suppliers or customers, or at least avoid damage against. In a review of 80 studies on the relationship in a socially responsible company and its financial performance it shows that in 53% of cases were positive, 24% had no effect 5% had negative and 19% mixed results . These studies suggest that the company that does good, does well. Consumers will likely develop a positive attitude toward the company, which becomes a greater possibility that their products or services (Mercer, 2003) consumed. Moreover, other studies show that not necessarily the actions of a responsible company is reflected in purchases, but if the consumer knows that there is a lack of social commitment from the company, he could take action against the company ( Arredondo, 2011). An ethical environment where employees will be reflected in the way they work and how society perceives SMEs as a responsible company. Ethical corporate culture is reflected in the treatment and established relationships with the outside, contributing at all times to a better reputation and, consequently, as some studies suggest about more and better financial results (Ruiz, 2011).
Proposed solution to the ethical problem

A possible solution could be to have leaders focused on results and ethical commitment. The professionals within SMEs can achieve improving their competitiveness if they exercise ethical leadership that leads them to such professionalization and implementation of a program of social responsibility. As it required to strive to be a better company and thus a better society. The profession is, by definition, an ethical activity that seeks to build a specific good in society, a good that is indispensable to call society, “human society” (Lopez, 2010). The professionals are an important part of organizations that provide services and products for human needs, and it is they who must act on behalf of a common good that should benefit all. Stay on personal projects for personal gain does not lead to a professional to be a role model. Professionally, the roles within a company become important, because patterns and behaviors that dictate the business leaders are followed. In the field of leadership follower term refers to a style of leadership that do not develop the person, the term collaborator, on the other hand, involves a professional who has been transformed into a professional (Arredondo, 2007). The leadership style of a professional is framed in how to treat others and how accomplished they do with conviction what they are asked. If the heads of every small business manage to persuade his people to do things as they should be, it is likely that achieve this competitiveness.
conclusion

The issue of developing the competitiveness of SMEs shows the responsibility I have towards my country because as an administrator, possibly to be working to some organization, or in my own company, and is of utmost importance to be as a professional leader, I will have to my position not only have to perform tasks, but should focus on acting ethically so that all decisions will be taken, as well as generate value for the company and for society. One future professional who exercise in any organization, should show respect for the dignity of the people involved, because if one must be aware that one occupies a position to serve society. This essay learned that being socially responsible for business can create long-term value, and thus have a better relationship between stakeholders. As a future professional, competitiveness one can improve it if a results-oriented and better work is done even if there is an ethical approach. It is known that companies in Mexico 99.7% are SMEs, and therefore its professionalism with an ethical basis could have a much more fair and balanced society as a result due to the national scope. For life project it is important not to forget that the competitiveness of a company and its social responsibility can go hand in hand only if the same leaders act that way.

References

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Vargas, Y. (2013) Profesionalizaci贸n de procesos en las PYMES. Obtenido de: http://hoy.ulsa.edu.mx/?p=36332

 

Competitiveness development in SMEs in Mexico.
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