An investigation into SME subcontracting firms in Malta

Abstract

The importance of SME subcontracting firms operating within the Maltese manufacturing industry cannot be underestimated in view of the strategic role for economic growth, job creation and the injection of innovative ideas. Subcontractors being SMEs are without doubt a significant contributor within the wider parameters of the Maltese economy. However, within the field of academic literature subcontractors are only granted an undue marginal reflection. The underlying objective of this research is to assess the main challenges experienced by SME subcontractors within the Maltese context. External factors mainly include political and economic factors, the challenge of meeting customers' demand together with competition. The internal factors impacting subcontractors embrace the strategic realisation of operational efficiency, together with quality challenges, flexibility, managerial challenges, innovation and financial constraints. The identification of the challenges served as a background in assessing the subcontractors' perspective towards the future. This approach also served in qualifying the remedial tactical approaches which subcontractors can effectively capitalise upon so as to ensure a strategic competitive advantage and ensure an optimistic future. This case study research has been executed by the adoption of qualitative data. The primary data was attained through face-to-face interviews which were carried out with headship positions, in the mainstream of cases, entrepreneurs acting as subcontractors. Secondary data has been highly significant particularly in the exploratory phase of the research, to shape alternative courses of action and identify managerial practices to be adopted by subcontractors. The results of the research indicate that in view of the challenges and market constraints, subcontractors, operating locally are attaining successful outcomes. However cautious approaches need to be adopted so as to shift perspectives from short to long-term strategic objectives and to assess business performance merely in terms of financial profits. It is prudent to focus on strategic market considerations and in order to minimise risk, subcontractors, need to adopt a pro-active approach in assessing and reacting to market trends. A set of recommendations paving the way forward are presented, addressing administrators and business entities, management researchers and ultimately subcontractors.