Characteristic features of project management in small and medium-sized enterprises

33 1, XIX, 2016 Business Administration and Management DOI: 10.15240/tul/001/2016-1-003 Introduction The operation and growth of small and mediumsized enterprises (SMEs – including micro enterprises) are signifi cantly determined by the characteristic features and internal diversity of this group of entities (Torrès & Julien, 2005; Curran, 2006). The identifi cation of characteristic properties leads to a qualitative and quantitative distinction between small and medium-sized companies from other entities, primarily including large enterprises (LEs) (Marchesnay, 1982; Bannier & Zahn, 2012). This set of properties, or “SME Ordinaire” – as proposed by Reboud, Mazzarol, and Clark (2011) – concerns, e.g., general managerial characteristics, organizational confi guration, strategy and market orientation. It is manifested by a less structured and formalized approach to management practice, survival, and business development (Geroski, 1999). The search for functional characteristics, which is connected with SME activity in various areas of management, is another important direction for research. One such area of growing importance for today’s organizations is project management. The approach is businesses’ way of coping with the increasing scope, complexity, dynamics, and uncertainty of the environment. These circumstances create many new challenges for modern enterprises (Mcgrath & Macmillan, 2009) and signifi cantly affect the operation of SMEs (West & Drnevich, 2010). Using project management ensures the high fl exibility and effi cient rationality of action. However, project management should be implemented with consideration for the individual needs and possibilities of specifi c business entities, including SMEs. Considering this, the paper aims to identify and evaluate select areas related to the qualitative characteristics of project management in SMEs. The analysis concerns particular phases in a project life cycle and is based on the results of research conducted on a sample of N = 897 enterprises, including n = 563 SMEs, and n = 334 LEs. The test of the difference between two population proportions was used to identify the areas of project management characteristic to SMEs statistically. 1. Theoretical Background and Hypotheses Academic publication that takes the characteristic features of small and mediumsized enterprises into account has historically originated from research developed on the management of these entities (Torrès, 2003). The beginning of this trend is linked to the studies of the Aston school of thought (Pugh, Hickson, Hinings & Turner, 1968; Pugh, Hickson & Hinings, 1969) and concerns the infl uence of enterprise size on its structure and operation (Penrose, 1959; Mintzberg, 1979). Within the trend of specifi city (Dandridge, 1979), SMEs are treated as a coherent group in opposition to LEs. Their characteristics may be of a qualitative or quantitative nature. In their analysis of qualitative characteristics, Blili and Raymond (1993) classify the characteristic features of SMEs into fi ve sets: (1) environmental features, (2) organizational features, (3) decisional features, (4) psychsociological features, and (5) information systems related features. A more elaborate approach is proposed by Nicolescu (2009), who (taking into account internal and external variables) identifi es 10 general features of the organizational systems of SMEs: (1) low size and complexity, (2) high typological diversity, (3) intensive human dimension, (4) low degree of formalization, (5) strong interconnection of the formal and informal elements; (6) relative procedural and structural simplicity, (7) high fl exibility, (8) strong entrepreneurial CHARACTERISTIC FEATURES OF PROJECT MANAGEMENT IN SMALL AND MEDIUM-SIZED ENTERPRISES Remigiusz Kozlowski, Marek Matejun EM_1_2016.indd 33EM_1_2016.indd 33 7.3.2016 15:39:207.3.2016 15:39:20 34 2016, XIX, 1 Ekonomika a management personalization, (9) intensive decisional centralization, and (10) relatively frequent use of the authoritarian and, respectively, participative approach. The concept that shifts the considerations closest to the general characteristics of SMEs is the idea of small business as a proximity mix, where Torrès (2004) distinguishes fi ve types of proximity: (1) hierarchical proximity, (2) intrafunctional proximity, (3) proximity information systems, (4) time factor (or temporal) proximity, and (5) spatial proximity. In these models, small and medium-sized businesses are characterized by a strong infl uence of company owner personality and high sensitivity to changes in external conditions (D’Amboise & Muldowney, 1988). The management process is dominated by shortand mediumterm perspective and low level of procedure formalization (Barrett & Mayson, 2007). Planning is used to a limited extent and is often informal (Honig & Samuelsson, 2012). On the other hand, small and medium-sized fi rms are characterized by high fl exibility of action (Verdú-Jover, Lloréns-Montes & GarcíaMorales, 2006; Alpkan, Yilmaz & Kaya, 2007), relatively high and effi cient innovation (Verhees & Meulenberg, 2004; Terziovski, 2010; Szabo, Šoltés & Herman, 2013), and well-developed adaptability to the changing environment (Levy & Powell, 2004). As far as the quantitative featured of SMEs are concerned, attention is paid to the quantity of resources held (controlled) and the quantifi able size of business. In this case, the features emphasized most are the employment volume, expenditure, and profi ts of the business. The conceptual framework of the characterization provides the basis for the defi nition and identifi cation of small and mediumsized enterprises among all business entities in general. Nevertheless, the aspects adopted for defi nition purposes are usually of quantitative nature and may differ from country to country (Ayyagari, Beck & Demirguc-Kunt, 2007). According to a World Bank study, over 125 million formal SMEs operate in 132 countries, including 89 million SMEs in emerging markets (Kushnir, Mirmulstein & Ramalho, 2010). They perform important economic and social roles, signifi cantly affecting the employment level, creation of new jobs, or GDP (Haltiwanger, Jarmin & Javier, 2013). According to 2012 data, there are 20.7 million small and mediumsized entities in the EU, accounting for more than 98% of all enterprises. The SME sector employs over 87 million people (67% of total employment) and participates in the generation of 58% of gross value added (Wymenga, Spanikova, Barker, Konings & Canton, 2012). However, as remarked by Curran and Burrows (1993) and Curran and Blackburn (2001), pinpointing the characteristics alone is not enough to clearly defi ne SMEs, due to the diversity and heterogeneity of this group of entities. This leads to the creation of a conceptual framework stressing the high diversity of SMEs. Examples of such an approach include the idea of the denaturation (loss of characteristic features) of SMEs (Torrès, 2003), or the concept of small business antithesis (Torrès & Julien, 2005). Despite the development of research on the internal diversity of SMEs as a group, the trend in the search for their specifi c features may be viewed as an established doctrine (Stevenson & Jarillo, 1990; Gartner, Bird & Starr, 1992) aspiring to the position of the dominant approach to studies on small-business management. This is made manifest by the development of research within this cognitive trend, which currently deviates from the general characteristics of SMEs in favor of their functional characteristics connected with specifi c areas or methods of management. What has emerged as an important research trend here are comparative studies of small and medium-sized companies and large ones. Among other topics, these studies concern intrapreneurship (Carrier, 1994), innovation practice (Koc, 2011; Vahter, Love & Roper, 2012), and intellectual property protection policy (Fernández-Ribas, 2010). A signifi cant empirical trend is represented by studies on the functions of enterprises, e.g., marketing and logistics (Rawwas & Iyer, 2013), or the application of modern management methods, e.g., the concept of corporate social responsibility (Coppa & Sriramesh, 2013), or competitive intelligence (Molnár & Střelka, 2012). Comparative studies also focus on the environment of SMEs and LEs. Examples include the research by Fong, Chen and Luk (2012) concerning location choices, or studies by Walker (2010) on the terms and costs of obtaining short-term credit for small and large fi rms. Another major direction for research on the functional characteristics of SMEs is also EM_1_2016.indd 34EM_1_2016.indd 34 7.3.2016 15:39:207.3.2016 15:39:20 35 1, XIX, 2016 Business Administration and Management the issue of project management. Project management has become one of the key challenges facing today’s organizations, something confi rmed both by economic practice and the development of research in this fi eld (Kwak & Anbari, 2009; Söderlund, 2011; Garel, 2013). Projects, defi ned as “a onetime activity with a well-defi ned set of desired end results” (Meredith & Mantel, 2011, p. 11), which are in contrast to the process approach to management (Tuček, Hájková & Tučková, 2013), play an important part in a dynamic, complex and uncertain environment, providing a response to accelerated competition, increased economic pressures, and rapid technological change (Patanakul & Shenhar, 2012). Their use by small and mediumsized businesses enables cost reduction and facilitates the introduction of new products and services to the market (Larson, Gobeli & Gray, 1991), primarily including innovative solutions in response to individual and changing client requirements (Allocca & Kessler, 2006). The idea of project-based management fi ts well with the qualitative characteristics of SMEs, as its use required the development of dynamic capabilities allowing enterprises to react effectively to changes occurring in a competitive environment (Teece, Pisano & Shuen, 1997; Teece, 2007). On the other hand, project management requires the involvement of specifi c resources (Mathur, Jugdev & Fung, 2007; Jugdev & Mathur, 2012). Due to resource shortages and other qualitative properties, that project management in SMEs would display specifi c characteristics different from the solutions used in large companies it should be expected. The reasons for this set of features lie both within the general characteristics of SMEs, and within the specifi c principles of project management and the properties of their life cycle (Westland, 2007). Reasons and basic goals of project are identifi ed at the stage when the project is being initiated. Employing project management may be very benefi cial to organizations. This includes structural and operational benefi ts, as well as business enhancement and improved business benefi ts (Soriano, 2011). Some of these advantages, such as quality improvement, increased effi ciency, or faster implementation of activities may be linked to the protection and enhancement of the existing organizational resources. Other advantages, such as increased revenues, are largely connected with the search for and acquisition of new resources. It seems that in the natural absence of resources in SMEs, particularly in the area of tangible and fi nancial assets (Welsh & White, 1981; Winston & Dologite, 1999), these companies tend to focus on the latter category of benefi ts. This leads to the formulation of the following hypothesis: H1: Project management in SMEs is primarily focused on the search for and acquisition of new material and fi nancial resources. At the stage of project planning and arrangement, a project team is formed, which may also be infl uenced by SMEs’ resource shortages. It seems the selection of project team members in SMEs depends more on the project budget, while in LEs there is more emphasis on the qualifi cations, skills, and knowledge of project participants. This leads to the formulation of another hypothesis: H2: The selection of project team members in SMEs depends largely on the budget allocated to the project. Murphy and Ledwith (2007) observed that in SMEs there was a need to precisely clarify the project goals and ensure the support of the owner-manager in project implementation, particularly their involvement in controlling the qualitative criteria of the undertaking. This stems from the dominant role of a private ownermanager in small-business organization (Quinn, 1997; Marcati, Guido & Pelusob, 2008; Tomczyk, Lee & Winslow, 2013), oriented towards preserving high operational autonomy (Jones, 2003). This qualitative feature is particularly important at the project implementation stage, as the owner – intending to preserve the autonomy of action – struggles for full control over project performance, which leads to the formulation of the following hypothesis: H3: In project management in SMEs, the key supervisory and leadership role is performed by the company owner who strives for full control over project implementation. The pursuit of high autonomy in the process of project implementation in SMEs may also EM_1_2016.indd 35EM_1_2016.indd 35 7.3.2016 15:39:207.3.2016 15:39:20 36 2016, XIX, 1 Ekonomika a management result in limiting the scope in which interorganizational cooperation is used. The studies by Bakker, Knoben, de Vries, and Oerlemans (2011) show that small and medium-sized businesses use cooperation mainly in the performance of simple and repetitive tasks (less frequently unique ones) and base it primarily on partnerships, which reduces possible confl icts between partners (Gardiner & Simmons, 1998). This brings us to yet another hypothesis, reading as follows: H4: In the process of project implementation, small and medium-sized enterprises only use inter-organizational cooperation to a limited extent, focusing rather on independent action. Another signifi cant feature infl uencing the characteristics of project management in SMEs is the relatively low level of formalization, and the high fl exibility of action. O’Sheedy, Xu, and Sankaran (2010) emphasize the considerable usefulness of project management in SMEs being executed in a fl exible and responsive manner, which is the best solution in a changing and highly uncertain environment. This is manifested by adopting less bureaucratic methods of project management in SMEs than in LEs (Turner, Ledwith & Kelly, 2010), which might signifi cantly affect the phase of project completion and evaluation. The lack of technical knowledge and experience of SMEs may also be an issue (Stair, Crittenden & Crittenden, 1989; Bacon, Ackers, Storey & Coates, 1996), particularly with respect to their use of IT support. This leads to the formulation of the fi fth hypothesis: H5: Project management in SMEs is characterized by relatively low formalization, which leads to a limited use of organizational and IT instruments, advanced and formalized forms of group communication, as well as a formally limited stage of project completion and evaluation. The study hypotheses formulated above indicate a specifi c set of qualitative characteristics in the process of project management in SMEs. The hypotheses have been verifi ed by empirical studies, as reported in the latter portion of the paper. 2. Methodology The aims of this paper were pursued and the research hypotheses were verifi ed in the course of studies conducted on a sample of N = 897 entities operating and implementing projects in the European Union. The research employed the survey method, which is regarded as the main data collection method in studies on entrepreneurship and small business (Newby, Watson & Woodliff, 2003; Bartholomew & Smith, 2006). The sample was selected at random based on a sampling frame that included enterprises that had implemented projects signifi cant to their business in the past three years. For the purpose of data analysis, the surveyed entities were grouped into two categories: SMEs (including micro, small, and medium-sized enterprises), and large companies (LEs). The criterion for SME identifi cation was the uniform formal defi nition given in the European Commission recommendation (2003) and in the European Commission regulation (2004). Using this approach, n = 563 SMEs were identifi ed, including n = 154 micro, n = 231 small, and n = 178 medium-sized businesses. In the analysis of study results, the term “small and medium-sized enterprises (SMEs)” was used with reference to all of these companies. The large business category was represented by n = 334 entities. The surveyed businesses mostly operated in the service sector (64.1%), less frequently they were involved in production (38.9%) or trade (34.8%). The results do not add up to 100 percent, as 30.2% of entities were active in more than one sector. The overwhelming majority of the surveyed micro and small companies operated locally and regionally, which is characteristic of small-scale entities (Giaoutzi, Nijkamp & Storey, 1988). On the other hand, medium-sized and large companies operated more frequently on a national, international, or global scale. All of the surveyed entities implemented specifi c projects in the course of their operation. The questionnaire asked the respondents to provide answers with reference to one specifi c project that had been of signifi cant (strategic) importance to the operation of the entity, and the management of which had been representative of the general principles of project management in the given organization. EM_1_2016.indd 36EM_1_2016.indd 36 7.3.2016 15:39:207.3.2016 15:39:20 37 1, XIX, 2016 Business Administration and Management The respondents were representatives of the surveyed companies involved in project implementation. They were members (91%) or supervisors (9%) of project teams. They had all participated directly or indirectly in all stages of the life cycles of the projects (Westland, 2007). The fi rst items under analysis were select quantitative parameters of the surveyed projects: their budgets and term of implementation. The results demonstrate that the project budget size is signifi cantly related to the company size, χ2 Yates (6, N = 897) = 97.16, p < 0.001. The strength of this relationship, as measured with Cramer’s V = 0.23, indicates a moderate correlation between the properties under study. Moreover, the empirical data show that larger enterprises implement larger projects (in terms of budget size). The length of time given to project implementation is also signifi cantly related to the company size, χ2 (6, N = 897) = 58.81, p < 0.001. The strength of this relationship, as measured with Cramer’s V = 0.18, indicates a moderately weak correlation between the variables. In this case, the empirical data also demonstrate that larger companies tend to implement longer projects (in terms of the duration of implementation). In order to identify the qualitative areas of project management characteristics in SMEs, the statistical test for the difference between two population proportions was employed (Goodwin & Kemp, 1979; Anderson, Williams & Sweeney, 2011; Aczel, 2012). So as to display the statistically signifi cant differences in responses from the representatives of SMEs and LEs, the hypothesis H0: pSME = pLE versus its alternative H1: pSME ≠ pLE was verifi ed with reference to each question. The H0 hypothesis was verifi ed using the statistical z score expressed with a suitable formula, which assuming the truthfulness of H0, has an asymptotically normal distribution. The process of research hypothesis verifi cation (Lehmann & Romano, 2005) adopted signifi cance level α = 0.05 and α = 0.01, and a two-tailed critical region. The results were analyzed with reference to particular phases and the relevant selected qualitative aspects of project management connected with the formulated research hypotheses. 3. Results The analysis of the project initiation phase focused on the assessment of differences occurring at the level of the reasons and objectives for project implementation. The responses of the representatives of small, medium-sized, and large enterprises are presented in Table 1. In the analysis of the project planning and arrangement phase, attention was given to the criteria for project team member selection and Key project causes and goals Percentage of SMEs Percentage of LEs z Client‘s market order 32.1% 16.5% 5.16** Expansion of business and market offer 17.1% 12.3% 1.92 Quality improvement 49.0% 63.8% -4.29** Increasing effi ciency 49.20% 57.49% -2.40* Shortening the time of processes or other operations in the company 30.0% 40.7% -3.27** Reduction of operational costs 23.6% 36.5% -4.14** Increasing revenues 68.6% 55.4% 3.97** Customer retention 53.8% 51.2% 0.76 Increasing competitiveness 70.2% 68.3% 0.60 Adjustment to external requirements 3.0% 1.5% 1.43 *p < 0.05; **p < 0.01. Test for the difference between two population proportions (2-tailed). Source: own Tab. 1: Differences in project management in SMEs and LEs at the project initiation stage EM_1_2016.indd 37EM_1_2016.indd 37 7.3.2016 15:39:217.3.2016 15:39:21 38 2016, XIX, 1 Ekonomika a management to the use of organizational and IT instruments in project planning. The responses of the representatives of small, medium-sized, and large enterprises are presented in Table 2. As concerns the project implementation phase, observations focused on the solutions used in project supervision, the use of inter-organizational cooperation, advanced technologies, and the forms of group communication. The responses of the representatives of small, medium-sized, and large enterprises are presented in Table 3. In the analysis of the project completion and evaluation phase, attention was paid to the entity performing the project assessment, the degree of attainment of the intended goals, and the scope of retaining the knowledge generated in the course of the project. The responses of the representatives of small, medium-sized, and large enterprises are presented in Table 4. 3. Discussion The study results presented suggest the occurrence of signifi cant areas of characteristics in all phases of the life cycle of SME projects. With reference to the initiation stage, the analysis concerned the major reasons and goals of the projects. The results indicate that SMEs more often implement projects in order to achieve effects related to direct market actions. It may be stated that in this case, project management is rather more externally oriented (marketoriented). Large fi rms, on the other hand, are more focused on the pursuit of developmental goals: quality improvement, both with respect to products and services, and internal procedures – in order to increase effi ciency or reduce the time it takes to implement processes or other business activities. Considerable differences at this stage also appear in the companies’ approach to the issue of effectiveness. SMEs are characterized by a higher orientation to effi ciency, dominated by the intention to increase revenues (which fi ts well with market-oriented project management). On the other hand, large fi rms prefer the economical option connected with optimization and reduction of operational costs. These differences may also provide grounds for conclusions related to the creation of the competitive advantage within the framework of the resource-based view (Barney & Clark, 2007; Jugdev, Mathur & Fung, 2007) by comparing groups of entities. If SMEs (due to resource shortages) tend to focus rather more on obtaining new sources of fi nancing, the large companies aim to protect their existing assets and improve them by undertaking economical and developmental initiatives. Therefore, the results support a positive verifi cation of the H1 hypothesis in terms of fi nancial Project team member selection criteria Percentage of SMEs Percentage of LEs z Project budget size 34.1% 28.1% 1.85 Skills and knowledge 89.2% 89.8% -0.31 Limited term of project implementation 17.8% 19.2% -0.52 Other criteria 3.2% 2.7% 0.43 Use of computer tools and software Percentage of SMEs Percentage of LEs z No use of tools and software 39.1% 13.5% 8.13** Project schedule 48.8% 67.7% -5.49** Project implementation chart 18.1% 24.6% -2.31* Network diagrams 3.7% 8.4% -2.96** Other tools 1.1% 2.4% -1.55 Computer software 30.0% 47.0% -5.11** *p < 0.05; **p < 0.01. Test for the difference between two population proportions (2-tailed). Source: own Tab. 2: Differences in project management in SMEs and LEs at the project planning and arrangement stage EM_1_2016.indd 38EM_1_2016.indd 38 7.3.2016 15:39:217.3.2016 15:39:21 39 1, XIX, 2016 Business Administration and Management assets that constitute the key resources in SME growth (Serrasqueiro & Nunes, 2011). Small and medium-sized companies prefer internal sources of fi nancing (García-Teruel & Martínez-Solano, 2007), which means that project management helps in supplementing them. In the analysis of the project planning and arrangement stage, one needs to consider that in the area related to the selection of project team members there are no signifi cant differences between SMEs and LEs. In both groups, the leading criterion is the one concerning the skills and knowledge of candidates. This does not provide positive verifi cation for the H2 hypothesis. However, signifi cant differences at this stage are found with respect to the use of organizational and IT instruments in project planning. The study results show that SMEs are less inclined to use organizational tools, and tend to make less use of computer software supporting project planning. One might thus conclude that the project planning and arrangement stage in SMEs Supervision of project implementation Percentage of SMEs Percentage of LEs z Company owner 57.0% 26.7% 8.83** Company employee or manager 16.7% 38.0% -7.17** Contractor’s employee 6.7% 7.8% -0.58 External consultant 7.8% 4.5% 1.94 Team supervision 11.7% 22.5% -4.27** Other solutions 0.0% 0.6% -1.84 Inter-organizational cooperation in project implementation Percentage of SMEs Percentage of LEs z Inter-organizational cooperation 46.0% 56.9% -3.15** Use of group communication forms in project implementation Percentage of SMEs Percentage of LEs z Meetings 90.4% 88.6% 0.85 Conference calls 18.3% 27.5% -3.25** Videoconferences 1.4% 6.3% -3.98** Stationary phones 76.6% 88.9% -4.58** Cellular phones 87.6% 82.3% 2.16* Satellite phones 4.3% 10.8% -3.78** Internet 75.0% 77.8% -0.98 Intranet 31.4% 66.5% -10.21** Extranet 4.1% 11.1% -4.05** No use of network connections 18.1% 7.5% 4.42** Use of advanced technologies in project implementation Percentage of SMEs Percentage of LEs z High-tech equipment 46.7% 39.8% 2.01* High-tech products 21.7% 21.0% 0.25 High-tech services 20.6% 21.0% -0.13 Computer software 41.7% 54.5% -3.70** *p < 0.05; **p < 0.01. Test for the difference between two population proportions (2-tailed). Source: own Tab. 3: Differences in project management in SMEs and LEs at the project implementation stage EM_1_2016.indd 39EM_1_2016.indd 39 7.3.2016 15:39:217.3.2016 15:39:21 40 2016, XIX, 1 Ekonomika a management is characterized by lower formalization and a limited scope of use of organizational and IT instruments as compared to large enterprises. The results obtained confi rm the H5 hypothesis with regard to lower formalization and limited use of organizational and IT instruments. The reason for this situation is the absence of specifi c organizational tools and computer software that might be used by SMEs in the project management process. Another problem may be the limited knowledge and skills of entrepreneurs in implementing initiatives and IT systems (Santos, Montoni, Vasconcellos, Figueiredo, Cabral, Cerdeiral, Katsurayama, Lupo, Zanetti & Rocha, 2007). The analysis of the direct project implementation stage revealed signifi cant differences in project management between SMEs and LEs – occurring in each of the areas under study. The fi rst one concerns the supervision of project implementation. In SMEs, this is usually performed directly by the company owner. The supervision is mostly of a statistical nature, and the supervising entity remains unchanged throughout the project implementation period. This supports the H3 hypothesis. In large fi rms, the management is teambased, collective, or it is performed within matrix structures. Supervising collectives usually include members of the leading entity (LE) and its partners and subcontractors. Therefore, managing is often dynamic, and supervisors change from stage to stage. The results illustrate that SMEs indeed tend to use inter-organizational cooperation in project implementation to a lesser extent than LEs. This limited tendency for interorganizational cooperation primarily stems from the smaller scope of their projects (in terms of budget size and term of implementation). Larger enterprises more frequently implement complex projects, requiring the involvement of many subcontractors, whereas SMEs usually implement simpler projects, only engaging their internal potential and resources. The results support the H4 hypothesis. The next area under study concerned the use of various forms of group communication in the course of project implementation. The Entity performing project evaluation Percentage of SMEs Percentage of LEs z Client 22.7% 17.4% 1.92 Expert uninvolved in the project 9.8% 11.4% -0.76 Contractor’s representative 7.6% 4.8% 1.66 Project supervisor 40.5% 51.2% -3.12** Company employee uninvolved in the project 13.3% 16.8% -1.41 Member of strict company management 7.3% 5.4% 1.11 External regulatory body 4.4% 3.3% 0.85 No project evaluation was performed 29.0% 21.3% 2.54* Degree of attainment of intended project goals Percentage of SMEs Percentage of LEs z Full 87.4% 79.4% 3.16** Partial 12.2% 19.9% -3.10** None 0.4% 0.6% -0.54 Retention of knowledge generated in project implementation Percentage of SMEs Percentage of LEs z Knowledge was retained 68.2% 78.7% -3.40** *p < 0.05; **p < 0.01. Test for the difference between two population proportions (2-tailed). Source: own Tab. 4: Differences in project management in SMEs and LEs at the project completion and evaluation stage EM_1_2016.indd 40EM_1_2016.indd 40 7.3.2016 15:39:217.3.2016 15:39:21 41 1, XIX, 2016 Business Administration and Management results show that SMEs use high-tech forms of telecommunication much less than LEs do. The biggest differences occur in the use of videoconference, satellite telephony, and conference calls. At a low level of signifi cance, SMEs use cellular phones more often than LEs. This is largely due to the limited communication needs in SMEs, connected with their smaller sizes, employment and limited spatial dispersion. However, it also confi rms the necessity to develop appropriate solutions in the area of internal communication within small and medium-sized companies (Holá, 2012). Signifi cant differences also concern the use of computer networks in the course of project implementation. Because of their characteristics, SMEs make much less use of the intranet and extranet. It should also be emphasized that many more SMEs do not use IT networks in project implementation at all. Thus, the results obtained in this section of the study support the H5 hypothesis with reference to the limited use of advanced and formalized forms of group and network communication. Another area of research concerned the use of advanced technologies in project implementation. The results show that at a low level of signifi cance, SMEs tend to make slightly more use of high-tech equipment – machinery and devices. These fi ndings may raise some doubts, as in fact large enterprises use computer software substantially more frequently in project implementation, and as it was indicated above, they also use advanced forms of group communication to a greater extent. The answers of SMEs gave concerning the scope of their use of high-tech equipment may be attributed to two reasons. Perhaps, these entities make greater use of small but highly specialized devices (measuring or production equipment) than LEs. On the other hand, due to their inherent resource shortages, SMEs tend to view various technologies as advanced. The purchase of the same machine by a large company may be seen as a lowtech investment. There is no doubt, however, that the implementation of projects by SMEs and LEs substantially affects the acquisition of new technological solutions and necessary material resources. Therefore, it supports the H1 hypothesis in terms of acquisition of new material assets. The last phase was project completion and evaluation. In this case, SMEs performed a full evaluation of the project signifi cantly less frequently, whereas this was usually done by the project supervisor in LEs. This is due to both the lower level of formalization of the project management process in SMEs, and the fact that static project supervision is usually performed by the business owner who supervises the project on a real-time basis. Despite this weakness, the results show that SMEs fully achieve the intended goals of their projects much more frequently. This happens for two reasons: fi rst, SMEs implement smaller projects, which make the attainment of their goals easier; second, LEs tend to implement more complex projects involving many subcontractors and partners (greater degree of inter-organizational cooperation). In this case, the fi nal project outcome is composed of the implementation of many fragmentary tasks, some of which may be outside the immediate control of the large entity. Mistakes or gaps in their implementation negatively affect the fi nal evaluation of project goal attainment. Surely, the study results may also be attributed to the lower level of formalization of the project completion phase in SMEs, where the assessment is more superfi cial, which allows them to record higher effi ciency ratios. The lower formalization of the project completion stage also translates into lower retention of the knowledge generated in project implementation in SMEs. It may additionally stem from limited capabilities (e.g., limited use of IT) or the needs of smaller businesses. The results obtained in this section positively verify the H5 hypothesis with regard to the formal limitations of the project completion and evaluation process. Based on the research fi ndings and their discussion, Table 5 presents the key areas of characteristics in the process of project management in SMEs as compared to the solutions employed by LEs. In addition, the results were referred to the verifi cation of individual study hypotheses. Therefore, it may be stated that the characteristics of project management in SMEs are made manifest by an external orientation focused on increasing effi ciency and the search for new resources, pursued with limited use of formalized management methods and tools. The management process is dominated by static leadership of the company owner, the limited scope of inter-organizational cooperation, and EM_1_2016.indd 41EM_1_2016.indd 41 7.3.2016 15:39:217.3.2016 15:39:21 48 2016, XIX, 1 Ekonomika a management Abstract CHARACTERISTIC FEATURES OF PROJECT MANAGEMENT IN SMALL AND MEDIUM-SIZED ENTERPRISES Remigiusz Kozlowski, Marek Matejun The trend of specifi city in studies on small and medium-sized enterprises management focuses on the search for characteristic qualitative and quantitative features distinguishing these entities from others, particularly from large enterprises. Research conducted within this trend may concern the general characteristics of small and medium-sized companies, as well as their functional characteristics connected with particular areas of management. One such area of growing importance for today’s organizations is project management. This approach plays an important role in a dynamic, complex and uncertain environment, providing a response to accelerated competition, increased economic pressures, and rapid technological change. Use the project management by small and medium-sized enterprises enables cost reduction and facilitates the introduction of new products and services to the market, primarily including innovative solutions in response to individual and changing client requirements. However, project management should be implemented with consideration for the individual needs and possibilities of specifi c business entities, including SMEs. Taking this facts into consideration, the goal of the paper is to identify and evaluate select areas related to qualitative characteristics of project management in SMEs. The analysis refers to individual phases of a project life cycle, is of comparative nature, and is based on the results of studies conducted on a sample of 563 small and medium-sized enterprises and 334 large enterprises. The test of the difference between two population proportions was used to identify the areas of project management characteristic to SMEs statistically. Based on the study results, fi ve research hypotheses have been verifi ed concerning the basic goals, role of the owner, interorganizational cooperation, and limited formalization in the process of project management in small and medium-sized enterprises. Key Words: Small and medium-sized enterprises, project management, large enterprises, entrepreneurship, comparative studies. JEL Classifi cation: L22, L25, L26, M00. DOI: 10.15240/tul/001/2016-1-003 EM_1_2016.indd 48EM_1_2016.indd 48 7.3.2016 15:39:227.3.2016 15:39:22