Institutionalization of agri-based small and medium enterprises (SMEs) in Batangas province, Philippines

Findings of the study revealed that the five processes recognized by the respondents as contributory to the evolution of SMEs [small and medium enterprises] were enactment of enabling laws; provision of government policies, programs and projects; establishment of government agencies; participation of the private sector; and regional or international integration and cooperation. The study also revealed that the SMEs have "good" internal organizational capacities as indicated in the assessment of six variables. Specifically, the SMEs have "good" leadership, production policies, technology, human resources, and financial resources. Market access was assessed to be "very good". In terms of linkages, the study revealed that SMEs generally have "good" relationships with parties outside the organization. SMEs have "good" enabling, normative, and diffuse linkages but have "very good" functional linkages. There is also a "very good" state of institutionality of the SME sector as shown in the assessment of eight indicators of institutionality. SMEs was rated "very good" in terms of technical competence, normative commitment, environmental image, spread effects of activities, autonomy, and public acceptance, and "good" in terms of innovative thrust, and influence. The study revealed that internal organizational variables have positive correlation with both the external variables and indicators of institutionality. In like manner, external variables have positive correlation with the indicators of institutionality. Thus, SMEs have to manage the internal organizational variables in a way a system operates, that is, each variable represents a component with clearly defined functions to perform in a properly designed structure. It is also imperative for the SMEs to interact with entities outside of business organizations. As espoused by the exchange theory, interaction produces reciprocities between and among the parties involved. Clearly, how the SMEs manage their organizational variables determines to a large extent their level of institutionality. The statistical analysis showed that the respondents of the study who belong to three different groups have similar perceptions in 12 of the 18 variables considered, namely: leadership, production policies, financial resources, enabling linkage, functional linkage, normative linkage, diffuse linkage, technical competence, normative competence, spread effects of activities, autonomy and influence. There were significant differences in the responses in six variables, namely: market access, technology, human resources, innovative thrust, environmental image, and public acceptance. Several recommendations by the author are presented