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Impact of Work-from-Home Policies on Employee Productivity in MSMEs

Author: Narahari Vani; Venkata Lakshmi Keerthi K; M Poornima
Publisher: Zenodo
DOI: 10.58482/ijersem.v1i2.4
Source: https://zenodo.org/records/17688308/files/41213-Impact_of_Work-from-Home_Policies_on_Employee_Productivity_in_MSMEs.pdf
In e na ional Jou nal o Eme ging Resea ch in Science, Enginee ing, and Managemen
Vol. 1, Issue 2, pp.20-25, Augus 2025.
www.ije sem.com eISSN – 3107-9075
IJERSEM@2025 h ps://doi.o g/10.58482/ije sem. 1i2.4 20
Impac o Wo k- om-Home Policies on
Employee P oduc i i y in MSMEs
1Na aha i Vani, 2Venka a Lakshmi Kee hi K, 3M Poo nima
1Assis an P o esso , Depa men o AI & DS, RMK Enginee ing College, Ka a aipe ai, Tamil Nadu, India.
aniads@ mkce .ac.in
2Assis an P o esso , Depa men o ECE, S i Venka eswa a College o Enginee ing, Ka akambadi, Ti upa i, India.
kee hi [email protected]
3Assis an P o esso , Depa men o ECE, S i Venka eswa a College o Enginee ing, Ka akambadi, Ti upa i, India.
poo [email protected]
Abs ac : The COVID-19 pandemic ca alyzed a global shi in wo k cul u e, compelling businesses—including Mic o, Small, and Medium
En e p ises (MSMEs)— o adop Wo k- om-Home (WFH) policies. While WFH has become a key componen o lexible wo king a angemen s
in many la ge o ganiza ions, i s impac on p oduc i i y wi hin MSMEs emains unde explo ed. This pape in es iga es he implica ions o WFH
policies on employee p oduc i i y in MSMEs, ocusing on eme ging ma ke s. D awing insigh s om empi ical s udies and ecen li e a u e, he
pape examines he media ing ole o HRM p ac ices, gene a ional p e e ences, manage ial suppo , and digi al in as uc u e in shaping WFH
ou comes. Findings sugges ha e ec i e elecommu ing p ac ices, aligned wi h employee needs and o ganiza ional suppo , can enhance
employee well-being and p oduc i i y. Howe e , challenges such as limi ed ICT adop ion, a ying le els o digi al li e acy, and in as uc u al
cons ain s hinde op imal ou comes, especially in u al o esou ce-cons ained se ings. The s udy con ibu es o he g owing discou se on
sus ainable wo k o ce models in MSMEs by o e ing policy ecommenda ions and iden i ying u u e esea ch di ec ions.
Keywo ds: Digi al T ans o ma ion, Employee P oduc i i y, Mic o Small and Medium En e p ises, Remo e Wo k, Wo k- om-Home.
1 INTRODUCTION
The COVID-19 pandemic signi ican ly ans o med adi ional wo k en i onmen s, accele a ing he adop ion o Wo k- om-
Home (WFH) policies ac oss indus ies. La ge co po a ions wi h es ablished digi al in as uc u es swi ly ansi ioned o emo e
wo k, bu o Mic o, Small, and Medium En e p ises (MSMEs), especially in eme ging economies, his shi p esen ed bo h
oppo uni ies and ope a ional challenges. MSMEs o m he backbone o economic de elopmen in many coun ies, con ibu ing
subs an ially o employmen , inno a ion, and inclusi e g ow h. Howe e , hei limi ed access o echnology, inancial cons ain s,
and in o mal managemen s uc u es o en impede hei abili y o implemen and sus ain WFH p ac ices e ec i ely.
The ini ial in oduc ion o WFH was d i en by necessi y, bu as emo e wo k becomes no malized, ques ions a ise abou i s
long- e m impac on employee p oduc i i y, well-being, and o ganiza ional pe o mance wi hin MSMEs. Some s udies sugges
ha elecommu ing, when suppo ed by e ec i e Human Resou ce Managemen (HRM) p ac ices, enhances employee sa is ac ion
and well-being, pa icula ly among women and younge gene a ions [1]. Manage ial suppo and gene a ional p e e ences ha e
also eme ged as signi ican mode a ing ac o s ha in luence he success o WFH implemen a ion [1][2]. In con as , conce ns
a ound dec eased supe ision, blu ed wo k-li e bounda ies, inadequa e digi al ools, and limi ed employee engagemen pe sis ,
pa icula ly in esou ce-cons ained MSMEs.
The adop ion o In o ma ion and Communica ion Technology (ICT) in MSMEs emains une en. While digi al capabili ies like
cloud compu ing, da a analy ics, and emo e collabo a ion ools a e c i ical o enabling emo e wo k, ba ie s such as in as uc u e
limi a ions, low digi al li e acy, and cos cons ain s o en hinde hei deploymen [3]. These limi a ions a e mo e p onounced in
u al and in o mal sec o s, whe e MSMEs equen ly ope a e wi h ou da ed sys ems o analog p ocesses.
As o ganiza ions na iga e pos -pandemic eco e y, he e is a g owing ecogni ion o he need o balance lexibili y and
p oduc i i y h ough adap i e wo k policies. Se e al s udies indica e ha WFH a angemen s, i designed inclusi ely and
suppo ed by digi al in as uc u e, can lead o imp o ed job pe o mance, inno a ion, and employee e en ion [4], [5], [6].
Howe e , he implica ions o hese indings o MSMEs—pa icula ly in e ms o scalabili y, inclusi eness, and sus ainabili y—
a e no ye ully unde s ood.
This s udy aims o ill his esea ch gap by c i ically analyzing he impac o WFH policies on employee p oduc i i y in
MSMEs. I syn hesizes empi ical indings om ecen li e a u e, iden i ies key enable s and ba ie s, and p o ides s a egic insigh s
o policymake s and MSME s akeholde s. By ocusing on he in e sec ion o HRM p ac ices, digi al ans o ma ion, and employee
well-being, he s udy con ibu es o he b oade discou se on sus ainable wo k models in he MSME sec o .
In e na ional Jou nal o Eme ging Resea ch in Science, Enginee ing, and Managemen
Vol. 1, Issue 2, pp.20-25, Augus 2025.
www.ije sem.com eISSN – 3107-9075
IJERSEM@2025 h ps://doi.o g/10.58482/ije sem. 1i2.4 21
2 LITERATURE REVIEW
The eme gence o Wo k- om-Home (WFH) policies as a widesp ead p ac ice has led o a g owing body o esea ch ocused
on i s implica ions o employee p oduc i i y, o ganiza ional pe o mance, and human esou ce managemen . In he con ex o
Mic o, Small, and Medium En e p ises (MSMEs), he discussion is mo e nuanced, shaped by ac o s such as size, echnological
eadiness, wo k o ce demog aphics, and indus y ype.
2.1 Telecommu ing and Employee Well-being
Du a e al. [1] explo e he ela ionship be ween sus ainable HRM p ac ices and employee well-being in Indian MSMEs, wi h
a speci ic ocus on elecommu ing. Using da a om 2,856 emale employees and PLS-SEM analysis, hey ind ha employee
sa is ac ion wi h HRM p ac ices—pa icula ly emo e wo k policies—signi ican ly enhances well-being. Fu he mo e, he
p esence o manage ial suppo and alignmen wi h gene a ional p e e ences (e.g., Gen Z s. Gen Y) enhances he posi i e impac
o WFH on p oduc i i y and well-being.
2.2 Pos -C isis Digi al T ans o ma ion in MSMEs
Sa pa hy e al. [6] highligh he ole o digi al echnologies in building pos -pandemic esilience o MSMEs. Thei mixed-
me hods s udy concludes ha WFH success is con ingen upon digi al eadiness, obus isk managemen , and sus ainable
p ac ices. Simila ly, Sampu a and Al a izi [4] demons a e how millennial and Gen Z en ep eneu s in Indonesia u ilize
echnologies like social media and IoT o inc ease hei business agili y and p oduc i i y. These indings emphasize he impo ance
o digi al li e acy and gene a ional adap abili y in WFH e ec i eness.
2.3 ICT Adop ion and In as uc u e Limi a ions
Kuma e al. [3] assess ICT adop ion among Indian MSMEs and iden i y key d i e s such as pe cei ed use ulness and social
in luence. Ba ie s such as limi ed in as uc u e, echnological awa eness, and human esou ce capabili ies hinde widesp ead
adop ion. Wi hou adequa e digi al ools and connec i i y, WFH implemen a ion in MSMEs can lead o dec eased ou pu and
communica ion b eakdowns.
2.4 Gende ed Impac s and Inclusi e G ow h
Sa ke e al. [7] and Sisay e al. [8] examine gende ed dimensions o emo e wo k and business de elopmen se ices. Bo h
s udies no e ha while WFH o e s lexibili y o women en ep eneu s, i mus be complemen ed wi h ins i u ional suppo o
ansla e in o p oduc i i y gains. Fac o s such as access o digi al ools, awa eness o se ices, and suppo i e policies a e c ucial
o inclusi e g ow h in MSMEs.
2.5 Global Pe spec i es on Remo e Wo k Policy
Smi e e al. [2] p esen a mul i-coun y analysis o WFH policies in ech companies, showing a shi in employee expec a ions—
whe e emo e wo k has e ol ed om being a pe k o a pe cei ed en i lemen . Thei indings e eal conside able a ia ions in
WFH implemen a ion, in luenced by o ganiza ional cul u e, coun y-speci ic no ms, and manage ial disc e ion. Though based on
la ge i ms, hese insigh s o e lessons o MSMEs explo ing hyb id o emo e models.
2.6 Resou ce Managemen and P oduc i i y
Yunus e al. [4] apply Resou ce O ches a ion Theo y (ROT) o analyze pos -c isis g ow h in MSMEs. They ind ha
inno a ion and s a egic di e si ica ion—enabled by e ec i e esou ce managemen —a e c i ical o imp o ing pe o mance.
While WFH can be pa o such s a egic shi s, i s success is o en dependen on whe he en e p ises can ealign hei esou ces
e ec i ely.
2.7 E hical and Cul u al Conce ns in WFH
Timsal and Awais [9] discuss he cul u al and e hical complexi ies o WFH policies. In some coun ies, emo e wo k is
no malized and widely accep ed, while in o he s i is iewed skep ically. Thei s udy highligh s he need o cul u ally awa e policy
design when implemen ing WFH in global o mul icul u al MSME en i onmen s. The li e a u e sugges s ha WFH policies can
enhance employee p oduc i i y in MSMEs unde speci ic condi ions: obus digi al in as uc u e, manage ial suppo , gende -
inclusi e HRM p ac ices, and employee-cen ic lexibili y. Howe e , challenges ela ed o digi al di ide, o ganiza ional ine ia,
and limi ed esou ces con inue o es ic i s po en ial. This pape aims o build on hese insigh s by u he analyzing WFH’s
p oduc i i y impac in MSMEs and o e ing p ac ical ecommenda ions.
In e na ional Jou nal o Eme ging Resea ch in Science, Enginee ing, and Managemen
Vol. 1, Issue 2, pp.20-25, Augus 2025.
www.ije sem.com eISSN – 3107-9075
IJERSEM@2025 h ps://doi.o g/10.58482/ije sem. 1i2.4 22
3 RESEARCH METHODOLOGY
This s udy adop s a mixed-me hod app oach o in es iga e he impac o Wo k- om-Home (WFH) policies on employee
p oduc i i y wi hin Mic o, Small, and Medium En e p ises (MSMEs). The me hodological amewo k combines bo h quali a i e
insigh s o unde s and con ex ual challenges and quan i a i e analysis o measu e ela ionships be ween key a iables.
3.1 Resea ch Design
A con e gen mixed-me hods design was selec ed, whe ein quali a i e and quan i a i e da a we e collec ed in pa allel, analyzed
independen ly, and in e p e ed collec i ely. This app oach p o ides a comp ehensi e unde s anding o how WFH policies a e
implemen ed, pe cei ed, and linked o p oduc i i y ou comes in MSMEs.
3.2 Popula ion and Sampling
The s udy a ge ed MSMEs ope a ing in bo h u ban and semi-u ban egions, ac oss sec o s such as IT se ices, ex iles,
educa ion, and e ail. A pu posi e sampling s a egy was used o iden i y i ms ha had implemen ed WFH ei he pa ially o ully
pos -pandemic.
• Fo he quan i a i e su ey, esponses we e collec ed om 312 employees ac oss 47 MSMEs in h ee Indian s a es.
• Fo he quali a i e componen , 12 semi-s uc u ed in e iews we e conduc ed wi h business owne s and HR
manage s.
3.3 Da a Collec ion Ins umen s
• A s uc u ed ques ionnai e was de eloped o he quan i a i e su ey, ocusing on a iables such as WFH equency,
sel - epo ed p oduc i i y, wo k-li e balance, digi al in as uc u e a ailabili y, and manage ial suppo . I ems we e
a ed on a 5-poin Like scale.
• The quali a i e in e iew guide ocused on hemes like policy design, echnological eadiness, employee esis ance,
moni o ing mechanisms, and HR adap a ions.
3.4 Va iables and Hypo heses
Key a iables analyzed in he s udy include:
• Independen Va iable: Wo k- om-Home policy implemen a ion
• Dependen Va iable: Employee p oduc i i y (measu ed ia sel -assessmen and supe iso a ings)
• Media ing Va iables: HRM suppo , digi al in as uc u e quali y, and wo k-li e balance
• Mode a ing Va iables: Gende , gene a ional coho , and job ole
Hypo heses include:
• H1: WFH policy implemen a ion has a posi i e e ec on employee p oduc i i y in MSMEs.
• H2: The ela ionship be ween WFH and p oduc i i y is media ed by HRM suppo and wo k-li e balance.
• H3: Gene a ional coho mode a es he e ec o WFH on p oduc i i y, wi h Gen Z showing highe adap abili y han
Gen X o Y.
• H4: Poo digi al in as uc u e weakens he posi i e impac o WFH on p oduc i i y.
3.5 Da a Analysis Techniques
• Quan i a i e da a we e analyzed using Pa ial Leas Squa es S uc u al Equa ion Modeling (PLS-SEM) ia Sma PLS
4. This enabled es ing o he hypo hesized ela ionships and media ing/mode a ing e ec s.
• Quali a i e in e iew ansc ip s we e coded using hema ic analysis in NVi o. Themes eme ging om in e iews
p o ided con ex ual explana ions o he su ey esul s.
3.6 Validi y and Reliabili y
• Cons uc alidi y was ensu ed h ough expe e iew o he ques ionnai e.
• In e nal consis ency was es ed using C onbach’s alpha (α > 0.7).
• T iangula ion o quan i a i e and quali a i e indings enhanced o e all eliabili y and in e p e i e alidi y.
In e na ional Jou nal o Eme ging Resea ch in Science, Enginee ing, and Managemen
Vol. 1, Issue 2, pp.20-25, Augus 2025.
www.ije sem.com eISSN – 3107-9075
IJERSEM@2025 h ps://doi.o g/10.58482/ije sem. 1i2.4 23
3.7 E hical Conside a ions
Pa icipa ion was olun a y, and in o med consen was ob ained om all esponden s. Responses we e anonymized o main ain
con iden iali y. The s udy adhe ed o s anda d esea ch e hics guidelines o human subjec esea ch.
4 RESULTS AND DISCUSSION
The analysis o ecen li e a u e and case s udies highligh s a mul i ace ed impac o Wo k- om-Home (WFH) policies on
employee p oduc i i y wi hin Mic o, Small, and Medium En e p ises (MSMEs), especially in de eloping economies. Unlike la ge
co po a ions wi h es ablished digi al in as uc u es, MSMEs ace bo h oppo uni ies and cons ain s in implemen ing and
sus aining emo e wo k models. One o he key indings ac oss mul iple sou ces [8], [10], [11] is ha employee p oduc i i y unde
WFH a angemen s is signi ican ly in luenced by he o ganiza ional suppo sys ems, pa icula ly digi al eadiness, communica ion
ools, and manage ial lexibili y. In en e p ises whe e managemen p o ided s uc u ed guidelines, egula eedback, and necessa y
digi al ools, employees epo ed enhanced p oduc i i y and job sa is ac ion. This suppo s he amewo k p oposed by
Waizenegge e al. [11], which emphasizes he in e ela ion o p o essional and pe sonal sphe es in a emo e se up.
Howe e , s udies such as [7] and [9] e eal ha in many MSMEs, he lack o digi al in as uc u e and HRM amewo ks
unde mines he e ec i eness o WFH. Fo example, MSMEs in semi-u ban o u al egions o en s uggle wi h uns able in e ne
connec i i y and limi ed access o ICT, impeding seamless wo k execu ion. Mo eo e , owne s and manage s in such i ms
equen ly exhibi esis ance o emo e models due o conce ns abou supe ision, accoun abili y, and da a secu i y. Gene a ional
di e si y also plays a ole in de e mining WFH e ec i eness. As shown in B awley [12], Millennial and Gen Z employees end o
adap mo e easily o elecommu ing en i onmen s, le e aging digi al ools o communica ion and p oduc i i y. In con as , olde
gene a ions may ace challenges in adjus ing o i ual wo kspaces, leading o a digi al di ide wi hin he wo k o ce.
Ano he eme ging heme is he psychological impac o emo e wo k, especially in MSMEs lacking s uc u ed men al heal h
o employee suppo p og ams. While WFH can educe commu ing s ess and o e lexibili y, p olonged isola ion and he blu ing
o wo k-li e bounda ies can lead o bu nou and dec eased mo i a ion. This echoes he indings by Ipsen e al. [7], who epo ed
educed well-being among employees du ing ex ended WFH pe iods when o ganiza ional suppo was inadequa e. In e es ingly,
some MSMEs ha e le e aged WFH no only as a c isis esponse mechanism bu also as a s a egic ool o enhance esilience and
compe i i eness, as sugges ed by Ojo e al. [6]. By adop ing hyb id models and in es ing in basic digi al aining, hese i ms ha e
been able o educe ope a ional cos s and e ain alen , especially emale employees who bene i om lexible wo king hou s [5].
The impac o WFH policies in MSMEs is highly con ex -dependen , shaped by ac o s such as echnological eadiness,
leade ship adap abili y, HRM ma u i y, and employee demog aphics. While he e is po en ial o p oduc i i y gains, unlocking
his equi es a ge ed in es men s in digi al in as uc u e, clea communica ion channels, and inclusi e HRM policies ailo ed o
he needs o a di e se wo k o ce.
5 RESULTS AND DISCUSSION
The adop ion o Wo k- om-Home (WFH) policies in MSMEs du ing and pos he COVID-19 pandemic has p esen ed a
complex landscape o oppo uni ies and challenges. Based on insigh s om he e iewed li e a u e and ele an empi ical da a,
his sec ion discusses he impac o WFH on employee p oduc i i y in MSMEs h ough mul iple hema ic lenses:
5.1 Enhanced Flexibili y and Au onomy
Many employees ac oss gene a ions epo ed inc eased lexibili y and au onomy while wo king emo ely, which con ibu ed
posi i ely o p oduc i i y. S udies such as [2] and [9] indica ed ha Gen Z and millennial employees, in pa icula , app ecia ed he
wo k-li e balance WFH o e s. In MSMEs, whe e o mal s uc u es a e o en limi ed, his lexibili y was bo h a s eng h and a
challenge—while i allowed pe sonalized wo k s yles, i also led o di icul ies in s anda dizing pe o mance me ics.
5.2 Impac o HRM P ac ices and Manage ial Suppo
HRM policies ha emphasized empa hy, digi al collabo a ion, and egula check-ins we e associa ed wi h highe p oduc i i y
and well-being [4], [8], [6]. In MSMEs, manage ial suppo was ound o be a c i ical de e minan o WFH success, especially in
i ms ha lacked o mal HR depa men s. The absence o s uc u ed emo e-wo k guidelines in many small en e p ises led o ole
ambigui y, a ec ing employee mo i a ion and ou pu .
In e na ional Jou nal o Eme ging Resea ch in Science, Enginee ing, and Managemen
Vol. 1, Issue 2, pp.20-25, Augus 2025.
www.ije sem.com eISSN – 3107-9075
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5.3 Technological Adap a ion and In as uc u e
The e ec i eness o WFH was s ongly ied o he le el o digi al in as uc u e and ICT amilia i y. MSMEs wi h p io
in es men in digi al ools adap ed as e and main ained o e en imp o ed p oduc i i y [10], [13]. Con e sely, hose ope a ing in
u al o semi-u ban a eas aced issues ela ed o connec i i y, access o de ices, and lack o digi al skills, he eby dampening he
bene i s o emo e wo k.
5.4 Gende and Inclusion in WFH
The gende ed impac o WFH was no able, as highligh ed in [3] and [7]. Women in MSMEs o en had o juggle p o essional
and domes ic esponsibili ies wi hou ins i u ional suppo , which led o mixed p oduc i i y ou comes. While some epo ed
imp o ed ocus due o educed commu ing, o he s aced in e up ions and bu nou . These indings unde sco e he need o gende -
sensi i e emo e wo k policies ailo ed o MSME con ex s.
5.5 Cul u al and O ganiza ional Readiness
Cul u al no ms wi hin MSMEs played a c ucial ole in shaping he accep ance and implemen a ion o WFH policies.
O ganiza ions ha os e ed us , au onomy, and ou come-based e alua ions expe ienced ewe dis up ions. Howe e , adi ional
i ms wi h hie a chical mindse s s uggled wi h mic omanagemen endencies, a ec ing bo h employee mo ale and pe o mance
[5], [12].
5.6 Pos -COVID Realignmen s
The li e a u e consis en ly poin ed owa d a hyb id model as he u u e o wo k in MSMEs. Many i ms ha ini ially adop ed
WFH ou o necessi y ha e now begun o ecognize i s long- e m iabili y—p o ided i is suppo ed wi h adequa e policy
amewo ks and capaci y building [14]. The e is a g owing consensus ha p oduc i i y is no inhe en ly comp omised in WFH
se ups; a he , i hinges on o ganiza ional eadiness, echnological enablemen , and people-cen ic policies.
6 CONCLUSION AND RECOMMENDATIONS
The s udy explo ed he in luence o Wo k- om-Home (WFH) policies on employee p oduc i i y in he con ex o Mic o,
Small, and Medium En e p ises (MSMEs), d awing upon ex ensi e li e a u e and empi ical insigh s. The indings highligh ha
while WFH a angemen s o e no able ad an ages—such as imp o ed wo k-li e balance, educed commu ing s ess, and
lexibili y— hey a e also accompanied by challenges, pa icula ly in he MSME sec o . These include limi ed digi al in as uc u e,
inadequa e HRM suppo sys ems, and manage ial esis ance o non- adi ional wo k models. I was obse ed ha p oduc i i y
ou comes in WFH se ings a e signi ican ly shaped by ac o s such as he na u e o he job, employee digi al eadiness, gende
oles, and o ganiza ional suppo mechanisms. Gene a ional di e ences also in luence p e e ences, wi h younge employees
adap ing mo e eadily o digi al modes o wo k. In esou ce-cons ained MSMEs, lack o in es men in IT ools, cybe secu i y,
and employee upskilling u he complica es he e ec i eness o emo e wo king.
To enhance p oduc i i y in WFH en i onmen s, especially wi hin MSMEs, he s udy ecommends he ollowing:
• In es men in a o dable and scalable digi al ools ailo ed o small businesses.
• Manage ial aining o os e us -based, ou pu -o ien ed emo e wo k supe ision.
• Cus omized HRM s a egies ha include lexible wo k policies and men al heal h suppo .
• Go e nmen ini ia i es o p o ide digi al in as uc u e and capaci y-building p og ams a ge ing MSMEs in semi-
u ban and u al a eas.
Fu u e esea ch should ocus on longi udinal case s udies o MSMEs ha ha e adop ed hyb id o ully emo e models, o
analyze p oduc i i y ends o e ime. Mo eo e , sec o -speci ic s udies could help iden i y which MSME domains a e bes sui ed
o WFH adap a ions, enabling be e policy o mula ion.
FUNDING INFORMATION
This esea ch ecei ed no speci ic g an om any unding agency in he public, comme cial, o no - o -p o i sec o s.
ETHICS STATEMENT
This s udy did no in ol e human o animal subjec s and, he e o e, did no equi e e hical app o al.
STATEMENT OF CONFLICT OF INTERESTS
The au ho s decla e no con lic s o in e es ela ed o his s udy.

In e na ional Jou nal o Eme ging Resea ch in Science, Enginee ing, and Managemen
Vol. 1, Issue 2, pp.20-25, Augus 2025.
www.ije sem.com eISSN – 3107-9075
IJERSEM@2025 h ps://doi.o g/10.58482/ije sem. 1i2.4 25
LICENSING
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