Would you please Literature Review related to the survival strategies for Small and Medium Sized entities in the building construction industry in Developing nations during the recent economic meltdown caused by the COVID 19 Pandemic and. the devaluation of the local currency against major trading currencies such as the united states dollars. He literature review should cover the following
Literature review related to topic.
Existing literatures/Empirical Literature.
LITERATURE REVIEW: SUVIVAL STRATEGIES FOR BUILDING CONSTRUCTION SMES DURING RECENT ECONOMIC CHALLENGES 2.1Introduction This study will examine the survival technics used by building construction SMEs in the City of Lilongwe during the recent economic hardships brought on, among other things, by the COVID 19 epidemic, ongoing power outages, and a lack of foreign currency. Lack of expertise in the areas of planning, financial management, human resource development, and competitive pricing of goods and services might be linked to the lack of effective survival strategies (Mellish 2016). For both developed and developing nations, the building industry makes a big and vital contribution to the process of development. Construction products provide the necessary public infrastructure and private physical structures for many productive activities. According to the National Construction Industry Council of Malawi (NCIC, 1996), the industry has a significant impact on the economy of a country during and after the actual construction process because it employs a large number of people (directly and indirectly) and has a high labor intensity. However, due to a lack of resources and other deficiencies, local businesses have not participated as much in Malawi's construction sector (NCIC,1996). 2.2Definition of SMEs Small and medium-sized businesses (SMEs) have a variety of definitions that institutions working on SMEs cases can come up with. A country's economic size typically affects how small and medium-sized businesses are defined. As a result, the term "SMEs" has an economic meaning as opposed to a legal one. A common indicator of SMEs is the number of employees, which is acknowledged by the majority of countries. The parameters for what constitutes an SME's size are a hotly debated subject. Diverging opinions exist regarding the size measurement standards for SMEs and their overall quantity (Dinçer, 1994). Some organizations use the number of employees when defining SMEs, while others use the company revenue. The World Bank's definition of SMEs is this micro scale; fewer than 50 employees, small scale; 50 employees, medium size; 50-200 employees. After the EU's first SME definition in 1996, the SME definition, which refers to staff numbers, has to be revised due to increases in inflation and productivity. And consequently; On May 6, 2003, the Commission adopted Recommendation 2003/361/EC on the SME definition, which replaced Recommendation 96/280/EC from January 1, 2005. The revision takes into account economic developments since 1996 and the lessons learned from the application of the definition. The new SME definition represents an important step towards an improved business environment for SMEs and aims to promote entrepreneurship, investment and growth. This definition has been developed after extensive consultation with stakeholders involved, proving that listening to SMEs is a key to the successful implementation of the Lisbon goals (EC, 2009). In the European Union, the new definition of SMEs includes companies with fewer than 250 employees (EC, 2003). This group is further divided into micro enterprises (less than 10 employees), small enterprises (10-49 employees) and medium-sized enterprises (50-249 employees). Micro-enterprises would include self-employed people working for themselves with no employees 2.3Role of Construction SMEs in Economic Development Building Construction SMEs play a vital role in the economic development of many developing nations. These businesses are often major employers and drivers of economic growth, particularly in the construction sector, which is a significant contributor to GDP in many countries. Construction SMEs also play a critical role in providing affordable housing and other essential infrastructure, such as roads, bridges, and water supply systems, which are necessary for economic development (Hasin et al., 2022). In addition to their direct economic impact, construction SMEs also contribute to the growth of other industries, such as manufacturing and transportation, by creating demand for raw materials and transportation services. This can lead to the development of local supply chains and the creation of new business opportunities (Pu et al., 2019). Moreover, construction SMEs can have a positive impact on the social and environmental development of a nation. SMEs are often more embedded in local communities than larger firms, which can allow them to have a greater understanding of local needs and concerns. This can lead to more sustainable and socially responsible business practices, such as the use of locally sourced materials and the employment of local labour. Construction SMEs can also promote innovation and technological advancement, particularly through the adoption of green building practices and new technologies, such as Building Information Modelling (BIM) and prefabrication. This can lead to improvements in construction quality, efficiency, and sustainability, as well as the creation of new job opportunities in emerging fields (Bakhtiari et al., 2020). The role of construction SMEs in economic development is significant and multifaceted. These businesses have the potential to drive growth, create jobs, and promote social and environmental progress in developing nations, making them an essential component of any comprehensive economic development strategy. Since the 1960s, especially, small and medium-sized businesses have gained popularity worldwide. SMEs have the following advantages, according to Schumacher (1973): They have a competitive structure, SME efficiency is higher, SMEs are better able to adapt to changing demands and technology, the working methods used by SMEs are not repetitive or boring, SMEs are better able to weather the economic downturn, and SMEs are more successful at boosting employment and setting up income. 2.4Gender in construction business Sandra et al. (2000) claim that of all the major industrial sectors, construction has the highest male dominance. They recognized the impediments to women entering the construction business as well as the subsequent impediments experienced by those already employed in the sector. These obstacles are caused by a variety of factors, such as the perception of the construction industry, knowledge of careers among children and adults, selection criteria, male-dominated courses, hiring practices and procedures, sexist attitudes, a male-dominated culture, and the workplace environment. According to the US Bureau of Labor Statistics (2022), in 2020, the proportion of women employed in the construction sector, as in recent years, was 1.2 million, or approximately one in ten. It has been noted that greater female participation is essential to address the labor shortage in the construction sector as well as to advance equality and effectiveness. The business continues to be one of the most gender-segregated in the world despite efforts to attract more women (Norbec et al., 2021). It has been determined that in order to alter the status quo, gender understanding needs to increase. Their study found that although there are many chances for women in the sector, they must deal with prejudice, gender-biased attitudes, and unrealistic expectations when they first enter the field. According to Mehay (2005) Married men are more likely to be promoted and receive significantly higher performance reviews than single men 2.5Factors/challenges Influencing Construction SMEs SMEs are influenced by a number of factors. There are two types of factors that affect SMEs: internal and external factors. Depending on the situation they represent, these factors may present opportunities or obstacles for SMEs. Morrison (2006), as cited by Baragwiha (2013) who states that businesses are impacted by external macro-environments that they cannot control, such as political, economic, social, technological, environmental, and legal factors. Because these factors are external to the company, SMEs cannot usually influence them through management decisions; in other words, they are out of their control. The marketing objectives, Human Resource (HR) strategies like employee motivation, staff turnover, and training provision, leadership styles, investment in Research and Development (R&D), and organizational culture are some of the elements that are frequently regarded as being part of the internal environment. According to Odongo and Wang (2016), Small business development is hampered by a lack of consistent credit, poor planning, legal and political connections, improper financing, low savings, inadequate training programs, the absence of excellent skills necessary for starting and running their business, and weak infrastructure. Access to finance Small and medium-sized businesses (SMEs) find it difficult to operate in many African nations due to a menacing business climate brought on by stringent legal requirements, high costs, expansion, and volatile trade rates, all of which make it difficult to generate significant profits to survive (Das, Kundu & Bhattacharya, 2020). According to Nichter and Goldmark (2009), there exist policy prejudices in favor of big corporations, which impedes the growth of small businesses as they encounter financial accessibility issues. The insufficiency of collateral, elevated transaction costs, and inability to cope with the complexity of formal financial institutions make it challenging for SMEs to expand. For SMEs in Africa to grow, there must be a sufficient supply of financial capital. Nevertheless, a lack of funding has been identified as a barrier to such development. The fact that SMEs struggle to obtain funding and credit is actually a widely acknowledged problem. Researchers agree that the inability of SMEs to attract funding is a major obstacle to survival and expansion in Africa (Das, Kundu, and Bhattacharya, 2020). Due to high funding costs, security concerns, and the requirement for prepayment, SMEs find it extremely challenging to obtain financing from banking institutions (Das, Kundu & Bhattacharya, 2020). Banks also encounter difficulties when extending credit to Small business owners. They argue that the expense of managing microloans for SMEs merely reduces their profits. Few nations have standards that are slightly lax, making it difficult to encourage defaulters to fulfill their obligations. Frequent Electricity power outages One of the main issues Malawi faces that is impeding its social, economic, and industrial development is an insufficient energy supply. Electricity supply is essential to SMEs' operations and financial success. Without a sufficient supply of power, businesses cannot operate at full capacity, which drives up the cost of operations. According to a 2010 World Bank Venture Survey, the two biggest obstacles to the survival of African SMEs were access to capital, which was mentioned by 18% of respondents, and a lack of energy. When compared to other parts of the world, Africa is the main landmass where power continues to be a major barrier to business expansion. Poor management Poor management should be viewed as a serious issue by organizations everywhere. This is a result of the incapacity of the management or boards that most SME managers appoint. Many business owners lack the fundamental training and management skills necessary to successfully run a company because they frequently manage by trial and error and give priority to short-term gains over long-term strategies. As indicated by research on administration factors connected to business failure (Islamo et al. , 2021), failure of SMEs to manage their finances, incomplete accounting information, credit management, stock management, marketing initiatives, and management personnel management are just a few examples. According to Lord and McGrath (2002), SME managers have the opportunity to succeed in their businesses through flexible training and coaching. Certain administrative and IT skills and abilities are essential for good organizational practices. The sustainability, development and progress of SMEs depends on effective management, which includes organization, coordination, management and supervision. Competence and level of education Morara & Moreithi (2009) and Jones (2009) argue that small entrepreneurs lack proper management skills which help to control a wide range of functions when running a business and be able to compete amongst themselves and other large firms. According to Islam et al. (2021), the most critical problem that many SMEs face is probably the lack of management skills. This refers to the knowledge, skills and aptitude of business owners and managers. A manager must be able to combine both tangible and intangible resources to create abilities, which in turn lead to capabilities (Islam et al., 2021). They believe that SMEs with skilled and competent employees are successful. According to Rorbert et al. (2013), business owners' educational backgrounds have been shown to positively correlate with the success and expansion of their companies. Kangasharju also made the point that small business managers and owners with advanced degrees were more likely to see their companies grow. Van Der Sluis et al. (2003). reviewed empirical studies examining how entrepreneurship is affected by education in developed nations. Their study's most insightful conclusion suggested that training has a favorable and significant impact on all performance facets. Fairlie and Robb (2008) found that companies with more educated owners have higher sales and profits and are more likely to survive. Corruption The biggest challenge affecting African organizations is probably corruption. Businesses are compelled by the dishonest practice to redirect their resources to non-business related activities. Corruption is now accepted as something that should be anticipated in many nations, and government employees specifically anticipate it before providing assistance. This actually means that for SMEs owners, more money should be spent outside of their financial plan or their financial plan should be reduced to pay for unnecessary activities that also lower their income and negatively impact business performance (Naradda Gamage et al., 2020). Negative perception. Another issue SMEs encounter is the negative perception that potential clients have of them. SMEs businesses are thought to be unable to deliver the necessary high-quality goods and services when compared to large projects (Islam et al., 2021). Significantly, SMEs frequently suffer losses to competitors who have well-established names and notoriety in the marketplace (Islam et al. , 2021). To change their poor reputation, SMEs must work extremely hard to improve the quality of their services and products. They also need carefully thought-out strategies to help them deal with ongoing pressure from other businesses and attract repeat business. Inadequate capital reserves and cash flow SMEs may be unable to make growth-related investments in new machinery, marketing, or R&D due to a lack of capital reserves, which may hinder their capacity to grow and remain competitive (Khan, Alam, & Syed, 2021). When it comes to SMEs' ability to survive in challenging economic times, the significance of cash and poor profitability cannot be underrated (Hoang, Xiao & Akbar, 2019). The capacity of SMEs to satisfy their financial responsibilities, pay suppliers and staff, and engage in expansion may be constrained by a lack of cash reserves and low profitability. Poor technology Other than lack of proper management skills as highlighted by some scholars, Rudjito (2003) and Ramukumba (2014) mention lack of appropriate technology and low production capacity as another challenge hindering SMEs’ growth in