How SMEs Differ From Their Larger Counterparts Essay - 1

How SMEs Differ From Their Larger Counterparts - Essay Example Some of the main factors that distinguish SMEs from their larger counterparts include layers of management, individual responsibility, communication, speed of decision-making, attitude towards risk, allocation of resources, formal practices, organizational structure, flexibility, marketing and advertising, environment, and politics. Let us discuss each of them in some detail in order to know how these factors create differences between SMEs and large corporations. 2.1 Layers of Management One of the main differences between SMEs and large companies is the layers of management. SMEs generally have very few layers of management as compared to large companies. They have less number of managers and employees because of simple and short organizational structure. The organizational chart of SMEs also looks flat because of fewer layers of management. â€Å"Small business organizational charts are often flat; they look like two or three stacked rows of bricks with one or two bricks on top† (Ingram n.d., p.1).