Management Of Small And Medium Sized Enterprise Commerce Essay


In this assignment, we will talk about high-performance teams development and management of small and medium-sized enterprise. From the domain of human resource management, we will discuss about recruitment, selection process, performance system. From the area of work team, we will discuss about the mix of knowledge, skills, and experience necessary for a team to fulfill its functions, developing and managing the high-performance team. From the domain of leadership, we will talk about empowering teams to develop their own way of work, theories and styles of leadership. From the organization and behaviour, we will discuss about incentive strategies to let colleagues achieve objects. Thas is the main framework we will discuss in this assignment, and we also provide it with a lot of relevant and representative examples to enrich the assignment. That is all we want to talk about in the assignment.

Recruitment: As the small and medium-sized enterprise, the recruitment process is extremely important. It is necessary for managers to identify characteristics of the person required, find the potential applicants, and put the right person to the vacancy.

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Firstly, aiming to find the specific applicants, it is better for mangers to give specific information, including age, gender, occupation, and background. If managers can not give the specific information to applicants, they will never find the right persons they need to fill the vacancy. There is a good recruitment process as the following.

Recruitment code:

Job advertisements should state clearly the form of reply desired, in particular, whether this should be by a formal application form or not. Preferences should also be stated if handwritten replies are required.

An acknowledgement of reply should be made promptly to each applicant by the employing organization or its agent. If it is likely to take some time before acknowledgements are made, this should be made clear in the advertisement.

Applicants should be informed of the progress of the selection procedures, what these will be( eg group selection, aptitude tests etc), the steps and time involved and the policy regarding expenses.

Detailed personal information( eg religion, medical history, place of birth, family background etc) should not be called for unless it is relevant to the selection process.

Before applying for references, potential employers must secure the permission of the applicant.

Applications must be treated as confidential.

The code also recommends certain courtesies and obligations on the part of the applicants.

Recruitment methods

External recruitment

Unsolicited requests: Write-ins or walk-ins(Media: word-of mouth, recommendation, previous recruitment advertising, general employer branding)

Existing contacts: Previous( re-employable) employees; retirees; career break; previous applicants of suitable general quality held on file.

Referrals: Registers of members seeking employment, kept eg by trade unions and professional bodies.

Agencies Job Centres: Network of agencies provided by central government: particularly for manual and junior positions in admin/clerical/retail

Resettlement Services: Finding civilian positions for armed forces personnel at end of service.

Careers Services: Placing graduates of schools and training institutions

Employment Agencies: Wide range of specializing agencies; temporary agencies for one-off requirements and short-term cover( eg of maternity or sick leave)

Consultancies Selection consultants: Recruit and select for positions; may cover clerical/adam staff, specialist staff( media, financial, etc), or managerial.

Outplacement consultants: Registers, retaining etc to help redundant and early-retired employees.

Search consultants: 'Head hunters'. Networking to track highly employable individuals: candidates proactively approached.

Direct to source: Schools, colleges, universities ( Media: advertisement, 'milk round' presentation)

The Internet: Wide range of recruitment databases.

External recruitment

Advertising for self-applicants

Soliciting recommendations from supervisors, training officers and so on

Soliciting referrals by existing employees to family, friends, contacts

Formal succession, promotion and transfer planning

The recruitment advertisement

The advertisement, based on information set out in the job description, job and person specifications and recruitment policy, should contain information about:

The organization: its main business and location, at least

The job: title, main duties and responsibilities and special features

Conditions: special factors affecting the job

Qualifications and experience (required, and preferred); other attributes, aptitudes and/ or knowledge required

Rewards: Salary, benefits, opportunities for training, career development, and so on

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Application: how to apply, to whom, and by what date

In fact, everything has its advantages and disadvantages, as the small and medium-sized enterprise, managers should realize that not each method is perfect to use. Here is the figure 1 below, which shows the advantages and disadvantages.

Figure 1




Internal search

Few costs

Motivate employees


Limited supply

Can not meet the demand

Limited to choose


Have a wide scope

Attract a lot of people

Many unqualified people

Complex to choose



Find high-performance


Personal prejudice

Personal preference

Low diversity

Public institute

Few costs

Unqualified applicants

Private organizaiton

Wide range

Qualified employees

High costs


Large volume applicants



Few experience

Advertisement on Internet

Attract many people

Get feedback timely

Unqualified applicants

Reference: based on Stephen P. Robbins and Mary Coulter,"Management," China Renmin University Press, 2003, Page 322.

Form the recruitment process, it is better for managers to use a wide range of methods to find the potential employees, and each method has its own advantages and disadvantages.

Managers should analysis which method is suited for them to use, and make right decision. As the small and medium-sized enterprise, it is better to use external recruitment and referral, because other methods are high costs, and spending a lot of time. When the small and medium-sized enterprise wants to diversify the structure and skill of employees, it is better for them to use advertisement, and private organizaiton. If the work level does not require experience and high-skilled employees, it is better to choose school, because its large number of people, and low salary.

Selection: Selection is a predicable behavior, it is designed to guarantee the applicants get success. After identify characteristics of person required and inform potential applicants, the selection process is extremely important. There are many methods of selection as the following.

(1)Application form: it is a common way for most organizations to require applicants to fill the application form. On the one hand, it is a form about your name, gender, age, telephone. On the other hand, it is a form about personal activity, ability, achievement.

Advantages: Relevant with experience, detailed information, and facts can be proved as the standard of selection. Formal and effective to use.

Disadvantages: only aiming to specific work, and has a limited information.

(2)Written examination: typical written examination includes intelligence, ability, interest, and imagination. This is a way to select in the early time to use. Nowadays, it is very popular, and prevalence.

Advantages: quickly get the intelligence, professional skill, experienced applicant information they want. And really directive to know the specific information.

Disadvantage: intelligence and other measures answers may not have a direct impact on their work, namely, not relevant with work.

(3)Performance imitation test: It includes work sampling and assessment centers. The work sampling is that applicants deal with tasks, which can be shown whether they have necessary ability and skill. The assessment centers is that managers and supervisors design a lot of questions, and let applicants do a lot of tests. Based on that, the management ability can be assessed.

Advantages: Relevant with job and easily meet the job needs. It is also very effective and help managers find the applicants they want.

Disadvantages: really high costs include design and application.

(4)Interview: It is a common way to select applicants. Many enterprises use the interview as their major selection process. Employees will ask a lot of personal questions such as age, marriage, hobby, and dream, and professional questions.

Advantages: It can be effective to choose applicants superiors want. It is a common method to use.

Disadvantages: Only pay attention to appearance not ability. The time during the interview is limited and short. Some personal prejudices and preferences may exist in the interview.

Reference: based on Stephen P. Robbins and Mary Coulter,"Management," China Renmin University Press, 2003, Page 326.

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As the small and medium-sized enterprise, the choice of selection ways is very vital. We suggest that the interview, written examination and application form are effective to use.

Because most small and medium-sized enterprise use these three methods, it has been proved effective and practical. The performance imitation test is not suited for small and medium-sized enterprise, because it is complex to design and use, also costs a lot of money. When it comes to interview, here are some suggestions as the following figure 2

Figure 2

â- design a lot of fixed questions.

â- no personal preferences and prejudices.

â- it is better to take some notes.

â- adopt the formal standard of evaluation form.

â- have enough time during the interview.

â- ask some specific questions.

â- not only pat attention to experience or qualification

â- wide the diversity of questions.

â- do not ask many private questions.

From the figure 2, some specific suggestions may help managers of small and medium-sized enterprise do well in the select process. Many small and medium-enterprises ignore many details during the selection process, which leads to they can not select rightly. It is better for them to pay attention to the detail not just attracts a lot of applicants but to be more professional, and fair.

Work team:

It is a very vital concept in the modern enterprise, which contributes to the development of the enterprise a lot, for instance, it is able to inspire team spirit, increase flexibility, improve work efficiency, benefit from labour force, and pay more attention to strategy management. The style of work team can be divided into 4 features, namely, aim, structure, member, duration time, we can see it as the following figure 3

Figure 3




Duration time

â-Product development


â-Enterprise re-development

â-Other purposes enterprises

want to achieve







Reference: based on Stephen P. Robbins and Mary Coulter,"Management," China Renmin University Press, 2003, Page 434.

In the modern organization, the most obvious 4 styles of team are that: functional team, self-managed team, virtual team, and cross-functional team. Different style of team suits various team, it really depends on the different situation.

Functional team: It is always aiming to improve work activities on their particular occupation, because all of the inferior are major in the same area, so the strategy, leadership, management are relevant specific.

Self-managed team: It means that there is no manager who takes responsibility for work process, all of staff are subjective to work without monitoring. The main purpose of the self-managed team is that it is responsible for completing work, and subjective to arrange their work schedule, monitor the working progress, make strategies, and take relevant actions on target.

Virtual team: It means the members use Internet, fax, e-mail, electronic facilities to make up the team.

Cross-functional team: It is made up with different area specialists, aiming to complete various tasks.

In fact, as the small and medium-sized enterprise, does every style of work team suit the enterprise? The answer is no, because it depends on different situation. For example, more and more world famous enterprises such as HP, PESI, and so on, adopt the style of self-managed team, and have a good effect, which seems that it is popular style of work team in the World, however, it does not suit the small and medium-sized enterprise. Because the staff in small and medium-sized enterprise are not such subjective to work

independently comparing with these in world famous enterprises who are eager to work with their mature enterprise culture, good welfares, incentive strategies. So the self-managed style does not suit the small and medium-sized enterprise. When it comes

to the style of virtual team, many famous enterprises adopt it because they think it is convenient and simple, while it also does not suit the small and medium-sized enterprise, because the costs of electronic facilities is quite expensive and it is complex to use, is the small and medium-sized enterprise able to pay that? So we think it is wisdom for the superior of small and medium-sized enterprise to adopt the style of functional and cross-functional team in different departments.

After we select the suitable style of work team for small and medium-sized enterprise, it is important to identify the mix of knowledge, skills , and experience necessary for a team to fulfill its functions, that is about how to build the high efficiency work team.

There are 8 features of high-efficiency work team, which can help the team fulfill its functions, which can be shown as the following figure 4

Figure 4

Relevant skill



work team

Suitable leader


Specific target

Negotiation skill

Loyal , devoted

Multi- support

As the small and medium-sized enterprise, if it wants to build the team, some issues will be considerate in the next process, namely, team size, time skills, and team leader.

Team size: The size of the team is important - it should be large enough to encourage a mix of backgrounds and skills but small enough for each person to be a crucial part of the team. Relatively small teams founded especially for the project tend to arrive at better solutions than single individuals or large legacy teams. In a large group, people may tend to get along with popular opinions rather than thinking for themselves. In general, the larger the group of people, the harder it is fore group to work well together. Smaller numbers also make team administrative tasks easier and make it easier to develop a common purpose with mutual goals and mutual accountability. The size and composition of the team is likely to vary over the length of the project, as different phases of work will require different levels of resources and different skills.

Team skills: A multi-disciplinary team with the right mix of skills and experience will bring insights and fresh thinking to difficult strategic issues and will provide a secure foundation for successful policy analysis, design and implementation. Considering the appropriate split between civil servants and non-civil servants and between experts and non-experts will help to guarantee the right combination of knowledge and freshness.

Team leader: The role of the team leader is to lead the people and manage the resources of the team to meet the project's goals. It is the team leader's responsibilities include:

Keep the purpose, goals and process meaningful through effective project management.

Monitor the performance of the team.

Build commitment and confidence in the team members

With support, manage the public face of the project e.g. media

Establish constructive links with other units, departments and with external stakeholders

Create opportunities for team members and make effective use of their skills and experience

Inspire, lead, coach and develop

As appropriate, take on responsibility for producing specific pieces of work.

According to that, based on different type of small and medium-sized enterprise, the selection of team style, specific ability required, and a lot of professional knowledge, are needed to be considerate into the process. Subsequently, the team size, team skills, and team leader, should always be considerate. In my opinion, it is better for small and medium-sized enterprise to select the small number of people to build the team, because it is convenient and suited for small and medium-sized enterprise, which does not need large-scale people. And then identify the specific professional knowledge, to help the development of team. When it comes to team leader, it is a key role in the work team, which will be considerate in the next section.

Leadership: It is the process of influencing others to work willingly towards gorals, to the best of their capabilities, perhaps in a manager different to that which they would otherwise have chosen. Theories of leadership can be classified as follows:

Trait: based on analyzing the personality characteristics or preferences or successful leaders.

Activity based, based on analyzing what designated leaders actually do, and how they do it.

Contingency: based on the belief that there is no one best way of leading, but that effective leaders adapt their behaviour to the specific and changing variables in the leadership context: the nature of the task, the personalities of team members, the organization culture and so on.

Style: Based on the view that leadership is an interpersonal process whereby different leader bahaviours influence people in different ways. More or less effective patterns of behaviour can therefore be adopted.

Trait theories of leadership

Early theories suggested that there are certain qualities, personality characteristic or trait that make a good leader. These might be aggressiveness, self-assurance, intelligence, initiative, a drive for achievement or power, appearance, interpersonal skills, administrative ability, imagination, a certain upbringing and education, the helicopter factor( ie the ability to rise above a situation and analysis it objectively)etc.

This approach has much in common with the great man theory of history, which states that great men set the great events of history in motion. Thus, those who display leadership in one situation would probably be the leader in any other situation. They are leaders because of some unique and inherent set of traits that set them apart from normal people. Lists of leadership[ qualities were completed that included:

Physical traits, such as drive, energy, appearance and height

Personality traits, such as adaptability, enthusiasm and self-confidence.

Social traits, such as co-operation, tact, courtesy and administrative ability.

Evaluation: the trait theory can not explain the effective leadership, because the explanation of trait theory ignores the relationship between leader employee, and some situation factor. So many people pay attention to the behaviour of leader.

Behavioral theories

According to many American Universities researches, there are three style of behaviour of leader, namely, autocratic style, democratic style, and laissez-faire style. Autocratic style: it means that leaders prefer to do everything on their own will, not thinking of profits and feelings of their employees. They only force employees to do on their own will, without the participation of employees. Democratic style: it means that leaders prefer to encourage employees to participate in the work, inspiring them to improve their work, and try their own best to increase the performance effect. Laissez-faire style: it means that leaders prefer to give a lot of freedom to their employees. They want employees to do everything according to the relevant activities of work.

Evaluation: it is established that democratic leader behaviour is the most popular behaviour, which contributes to the quantity of work, and quality of work. Autocratic style and laissez faire style are extremely not suited for management.

Situational leadership theory

It is developed by Paul Hersey and Ken Blanchard, it is a theory that pays attention to employees, and rank the employees to the first place. They think successful leader is decided by the readiness of their employees. The specific information be shown in the figure 5

Figure 5

Low task high relationship

High task high relationship


The style of leadership


Participate Persuade

S3 S2

S4 S1

Empower command

Low High

The behaviour of task

Low task low relationship

High task low relationship

From the figure 5, we can know 4 style of leadership, namely, participate, persuade, empower, and command. Here is a case, we will use the situational leadership theory to analysis.

Case: it is a small and medium-sized enterprise engaging in the real estate with 200 employees, in Xian. The most obvious problem is that Leadership management. Some employees complain about their leaders for the sake of necessary support and commands. Some employees do not satisfy their leaders, because they would not like to work under too much instructions and limitations from their leaders. Other employees complain about their leaders, because they want to have more power to work. It can be shown that leadership management is not good, which leads to this situation. Because leaders always give the same task and power to their employees.

Solutions: From the situational leadership theory: Command style(S1), it is high work low relationship. It means that employees can not take responsibility for their work on willingly, because of the lack of guarantee and support. Aiming to these employees, leaders should always command them what they must do, helping them design work schedule include when to finish work, how to work by different methods and so on.

For example, aiming to new employees, it is better for leaders to use command style, because new employees needs specific work information eagerly, so the command style of leader is not bad according to this situation. Persuade style(S2), high work high relationship, it means that employees lack the necessary skill and ability to finish work. In this situation, leaders should give them a lot of help and directions. Helping them work on target. Participate style (S3), high work low relationship, it means employees do not want to work under too much instructions and limitations. Based on that, leaders should encourage them to participate in the strategy decision. Empower style(S4), low work low relationship it suits very readiness employees. It means that leaders should give them a lot of power to work. Because these employees do not need specific instructions and help. All they want is just working better.

References: based on XiQiu min and JingRun tian "Scientific and art about leader"

Xian Jiaotong press. Page48-49.

Evaluation of situational leadership theory: this theory is a directive impression, paying attention to employees, and accepting the importance of employees. But this theory is not suited in different situation, because it has its own disadvantages and not consistent.

Styles of leadership: Likert described a range of four styles of leadership.

(1) Exploitative authoritative. The leader has no confidence or trust in his subordinates, imposes decisions, never delegates, motivates by threat, has little communication with subordinates and does not encourage teamwork.

(2) Benevolent authoritative. The leader has only superficial trust in subordinates, imposes decisions, never delegates, motivates by reward and, through sometimes involving others in problem solving, is basically paternalistic.

(3) Participative. The leader has some confidence in subordinates, listens to them but controls decision making, motivates by reward and a level of involvement, and will use the ideas and suggestions of subordinates constructively.

(4) Democratic. The leader has complete confidence in subordinates who are allowed to make decisions for themselves, motivation is by reward for achieving goals set by participation, and there is a substantial amount of sharing of ideas, opinions and cooperation.

Evaluation: Likert recognized that each style is relevant in some situations; for example, in a crisis, a (1) is usually required. Alternatively, when introducing a new system of work, a (4) would be most effective. His research shows that effective managers are those who adopt either(3) or a (4) leadership style. Both are seen as being based on trust and paying attention to the needs of both the organization and employees.

References: based on XiQiu min and JingRun tian "Scientific and art about leader"

Xian Jiaotong press. Page 38-39


When the work teams are built in the small and medium-sized enterprise, it is very vital to enthuse and motivate colleagues to achieve objectives. Many people may be wondering whether motivation is really so vital. It could be argued that if a person is employed to do the job, he will do that job and no question of motivation arises. If the person does not want to continue the work, he may resign. That is why enterprises whether they are large-sized or small and medium-sized try to motivate their staff.

It is common sense that if individuals can be motivated, by one means or another, they will work more efficiency (and productivity will rise) or they will start a better attitude of work. There are a lot of means which could motivate employees a lot such as monetary rewards and high welfares, however not all the incentives that an organization can offer its employees are directly related to monetary rewards. The satisfactory of any of the wants or needs of employees could be seen as a reward for past or incentive for future performance. For instance, some small and medium-sized enterprise not only motivate employees with high salary, good welfare, and bonus, but also praise and promote employees. That is because different people have different needs. The American psychologist Abraham Maslow(1954) suggested that people have certain innate needs, as shown in Figure 6.

Maslow also suggested that freedom of inquiry and knowledge and understanding were two further needs and that these were the channels through which we can satisfy the other needs. Freedom of speech and expression and to gain knowledge, explore and experiment are the basis of satisfaction. Another famous theory is three-needs theory put forward by David McCleland, namely, (1)need for achievement: aiming to succeed, and challenge everything.(2)need for power: aiming to command people and seek for great power. (3)need for affiliation: aiming to develop good relationship with people. These three theories also could explain the reason why different people need various motivations.

In fact, from the theories of Maslow and David McCleland, we can get the key information that motivations should suit different needs of people. For instance, as the small and medium-sized enterprise, when the superior of the enterprise want to motivate people, it is wisdom for them to adopt various motivations. If you want to motivate the new fresh employees, it is better to increase their salary, because all they want is money to support their life. If you want to motivate the medium-skilled employees, it is better to promote them, because they prefer to challenge themselves, and gain confidence. If you want to motivate managers, it is better to empower them to let them gain more power, because they prefer to achieve self-actualisation. If all of their needs are being met, and goals being fulfilled, at work, they are likely to have a positive attitude to their work and to the organization.

As the small and medium-sized enterprise, sometimes, non-monetary motivation seems to have a more impact on daily operation. Job enrichment and empowerment are the obvious ways to motivate. Job enrichment is planned, deliberate action to build greater responsibility, breadth and challenge of work into a job. It is, in effect, a vertical extension of the job design. It might include: (a)remove controls (b)increase accountability (c)create natural work units, teams or client relationships (d)provide direct feedback on performance (e)introduce new tasks or special assignments.

Empowerment: the purpose of empowerment is to free someone form rigorous control by instructions and orders and give them freedom to take responsibility for their actions and ideas, to find the potential leader. These two ways of non-monetary motivation could help the enterprise a lot.

In summary, it is very important to motivate employees and let them work more hard and subjectively, which could contribute to the development of small and medium-sized enterprise, and motivations should base on the different type of needs.

Performance management:

When managers want to the progress of their employees, it is better for them to use suitable methods, with clearly defined and relevant criteria and objectives, to assess the performance of colleagues. There are 7 methods to assess the management of employees.

Which is shown as the following figure 7.

Figure 7




Written essay

Easy to use

Too partial, and one-side

Critical incidents

Abundant examples

Based on facts

Spend a lot of time

Graphic rating scales

Provide information

Spend little time

Can not provide the specific information.

Behaviorally anchored rating scales, Bars

Pay attention to work behavior easily done

Difficult to use. Spend a lot of time.

Multiperson comparisons

Comparison with other employees

Limited by the number of staff, difficult to use.

Target management

Target is the first

Spend a lot of time.

360 degree feedback

Multi-faced feedbacks

Spend a lot of time.

Written essay: it means that supervisors based on the ability, potential skill, weakness and strength develop this method in the form of written.

Critical incidents: it only pays attention to the specific behavior, not just to assess the characteristic of individual.

Graphic rating scales: it is the oldest method to assess the performance. It includes a lot of factors such as quantity and quality of work, loyalty, creative thinking and so on. supervisors adopt different points to assess the performance.

Behaviorally anchored rating scales, Bars: it also use point to assess the performance, however, it only pays attention to specific behavior not individual quality.

Multiperson comparisons: it means that supervisors use comparison method to assess the performance, the most common forms include three ways. Individual ranking, paired comparison, and group order ranking.

Target management: it means that many employees have several specific information, which is the target goal aiming to the success of work.

360 degree feedback: it means all of the information between employees and other managers, other workmates. It includes abundant information, which could help supervisors to get the more and more detailed information about employees.

Reference: based on Stephen P. Robbins and Mary Coulter,"Management," China Renmin University Press, 2003,Page 332-333.

As the small and medium-sized enterprise, we think the graphic rating scales and multiperson comparisons methods are better for managers to use. Because written essay is too partial and can not provide the specific behaviors, target management is costing much time, and 360 degree feedback is also spending a lot of time.


From the assignment, we discuss recruitment and selection process from the domain of human resource management, the different style of team, how to build a team, and the features of high-performance team from the domain of work team, and also motivation from the domain of organization and behavior. We also Use suitable methods, with clearly defined and relevant criteria and objectives, to assess the performance of colleagues. In this assignment, we apply a lot of figures, example, theories, and case, to enrich the assignment. We hope these analyses help the development and management of small and medium-sized enterprise.