Tuesday, December 10, 2019

Business Capstone Project Structure Decisions

Question: Discuss about the Business Capstone Project for Structure Decisions. Answer: Introduction SMEs have a tendency to service as the source for creating employment opportunities, livelihood of the poor, generating income and contributing to the economic growth of the countries (Welsch, Price and Stoica 2013). Although, the roles of the SMEs have been increasing in the financial sector, the accessibility to the credit remains a major concern. Microfinance is a form of financial development which aims at alleviating the poverty of the poor who remained aloof of the proper financial services. The paper deals in examining the role of the microfinance in promoting the small and medium enterprises in Australia. Research aims and objectives The research aims at contributing to the array of literature on the Microfinance and the development of SMEs in Australia. The research also aims at investigating the effectiveness of the implementation of the microfinance in the larger companies in the country. The research also deals in estimating the current issues that are being faced by the organizations. The research objectives related to the study are as follows: To evaluate the role of Microfinance in the business organizations To identify the issues as faced by the organizations leading them to seek micro financing To identify the various facts and figures related to the ability of micro financing in developing the SMEs to larger companies Literature review SMEs in Australia According to the reports presented by Australia Bureau of Statistics (ABS), the small business is actively trading businesses with 0-19 employees (Salimzadeh, Courvisanos and Nayak 2013). Likewise, the medium business has 20-199 employees while the larger organizations have more than 200 employees working under their respective business environments. The small businesses make significant contribution to the Australian economy which accounts for more than half of the industry employment and contributing to over a third of the industry value. SMEs play crucial role in the creation of employment and the income generation in the developing countries including Australia. This role is critical in the efforts of the countries to eradicate the poverty. Capital structure and financing For a business to expand, the firms should be increasing their assets by involving an implicit decision for raising money capital such that to promote financial growth. According to Elsas, Flannery and Garfinkel (2014), there are three main sources of the funds composing of equity financing, use of retained earnings and debt financing. The three major theories related to the capital structure of the firms include (i) trade off model, (ii) pecking order hypothesis, (iii) and signaling model. These theories allows the firms to choose their capital structures by trading off the debt benefits with the cost of debts of the agency and bankruptcy costs as well. Key factors inflowing the development of SMEs Microfinance is a significant tool for prompting the business development. The development of the small business is subjected to receive and access lucrative market related to the finance sector. The microfinance helps in improving the business working capital. Microfinance also helps in solving the financial issues as faced by the organizations. According to a recent survey, more than 10,000 firms in over 80 countries around the world have named financial constraints as one of the most sever issue which have been hampering with their growth (Fuller 2016). Role of microfinance in the SME development According to Gorodnichenko and Schnitzer (2013), lack of access of finance is one of the major constraints that is hampering with the development of small businesses. Commercial banks have been traditionally concentrating on their lending especially on the large formal enterprises possessing the collateral and less risks. According to Vanroose and DEspallier (2013), one of the solutions dealing with the lack of financing options for the SMEs is the introduction and development of microfinance. It has the capability to strengthen the firms and encourage the best practices in the working environment of SMEs. From the demand perspective, microfinance is diversified into microcredit, micro savings, micro insurance and investment as well. Microfinance also plays a crucial role in the profits and revenue growth of the SMEs. Research gap The literature lacks the illustration of the framework and models related to the micro financing and its auctions in the SMEs. Moreover, the literature lacks the evaluation of the impact of the microfinance on the business performance of the organizations. It also lacks the illustration of the structure of microfinance as followed in the business organizations. Research questions What are the key factors influencing the small enterprises in order to transform medium enterprises into large enterprise? What is the significance of micro financing in the SMEs? What are the issues faced by the firms that determine the likelihood of receiving micro financing? Research design and methodology Research methods The research method can be diversified in the form of two dimensions including the inductive and the deductive method. The applications of the deductive approach are to establish a hypothetical evaluation of the issues underpinning in the research study. On the other hand, the inductive approach is dependent on the theories related to the subject matter related to the research. The research study requires implementing the Deductive research approach which could help in reducing the resource consumption. As the Inductive research approach requires the inclusion of new theories and models and hence, would be more time consuming. Thus, the deductive research approach would be more suitable for the research study. In the research study, the deductive method has been utilized for conducting the same involving the formation of the hypothetical evaluation related to the research topic. The formation of the research questionnaires is subjected to be interpreted according to the primary issues being recognized in the research. The questionnaires should be incorporating the qualitative ands quantitative questions which could be helpful in acquiring quality data related to the research study. Thus, the deductive approach is the most appropriate for the research study. Research strategy According to O'Leary (2013), the research strategy is the factor that enables the research process to acquire useful information related to the research topic. The research study requires the information related to the role of the Microfinance in the development of SMEs. Thus, the conduction of primary data collection would be suitable for the research study. This follows the conduction of the interviews and surveys based on the research questionnaires being formulated in the research study. This conduction of interviews and surveys would be helpful in acquiring quality data related to the research topic. Data collection methods The data collection process would be helping in collecting the required information related to the research which should be compatible with the time and budget as estimated for the research. There are two main techniques which are followed in the data collection process including the primary data collection and secondary data collection. The research study requires the formulation of the research questionnaires and hence, the conduction of primary data collection would be more appropriate. Sample size The sample should be selected by implementing the random sampling technique. 100 respondents should be selected who should be working in the commercial banks and financial organizations in Australia. Data analysis The data analysis another significant process which is helpful in analyzing the information being acquired through the data collection process. The analysis would be helpful in gaining relevant information related to the microfinance and its role in the development of the SMEs in Australia. The tools being implemented in the research process includes the various charts, figures, tables, diagrams and analytical software including SPSS and Word. These tools would be helping in analyzing the information such that to gain knowledge about the research topic being selected for the research. Contribution The various research tools, techniques, approaches and strategies related to the research study would be helpful in conducting the research process in the appropriate direction. The implementation of the primary data collection method would be helping in collecting useful information related to the research topic. Moreover, the implementation of the appropriate research strategy, design and procedure would be enabling in collecting relevant and useful information related to the research topic. The research methodology would be helpful in constructing the data analysis through the implementation of the statistical analysis. Research outcome The research study is helpful in contributing to the array of literature based on the Microfinance and the development of SMEs in Australia. The research would be able to find the relationships between the SMEs and the Microfinance institutions for transforming the firms to economy development in the country. The roles of the SMEs have been increasing in the financial sector, the accessibility to the credit remains a major concern. The research study would be helpful in evaluating the role of Microfinance in the business organizations. It also helps in identifying the issues as faced by the SMEs. The research also helps in identifying the various facts and figures related to the ability of micro financing in developing the SMEs to larger companies. The paper deals in examining the role of the microfinance in promoting the small and medium enterprises in Australia. References Elsas, R., Flannery, M.J. and Garfinkel, J.A., 2014. Financing major investments: information about capital structure decisions. Review of Finance, 18(4), pp.1341-1386. Fuller, G.W., 2016. Introduction. In The Great Debt Transformation (pp. 1-24). Palgrave Macmillan US. Gorodnichenko, Y. and Schnitzer, M., 2013. Financial constraints and innovation: Why poor countries don't catch up. Journal of the European Economic Association, 11(5), pp.1115-1152. O'Leary, Z., 2013. The essential guide to doing your research project. Sage. Salimzadeh, P., Courvisanos, J. and Nayak, R.R., 2013, July. Sustainability in small and medium sized enterprises in regional Australia: a framework of analysis. In Annual SEAANZ Conference Proceedings in Sydney, Australia. Vanroose, A. and DEspallier, B., 2013. Do microfinance institutions accomplish their mission? Evidence from the relationship between traditional financial sector development and microfinance institutions outreach and performance. Applied Economics, 45(15), pp.1965-1982. Welsch, H., Price, D.P. and Stoica, M., 2013. Innovation, Performance and Growth Intentions in SMEs. International Journal of Economics and Management Engineering, 3(5), p.176.

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