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How to cite this article:

López Díaz, V. H. & Ramírez Vargas, D. L. (2023). Variables influyentes en la gestión administrativa de las pymes. MLS Law and International Politics , 2(2), 80-93. doi: 10.58747/mlslip.v2i2.2420.

VARIABLES INFLUENCING THE ADMINISTRATIVE MANAGEMENT IN SMES

Victor Hugo Lopez Diaz
Universidad Internacional Iberoamericana (Colombia)
victor.lopez1@doctorado.unini.edu.mx · https://orcid.org/https://orcid.org/0000-0003-0829-9150

Débora Libertad Ramírez Vargas
Universidad Internacional Iberoamericana (México)
debora.ramirez@unini.edu.mx · https://orcid.org/0000-0001-8709-457X

Receipt date: 05/10/2023 / Revision date: 12/11/2023 / Acceptance date: 29/11/2023

Abstract: The implementation and efficiency of administrative management is a common challenge in small and medium-sized enterprises (SMEs), induced by factors like the lack of a specialized and experienced team in the actions and decisions that companies must take and be functional. Generating poor management and difficulties in strategic orientation, leadership, training and planning, threatening the sustainability of SMEs that lead or collaborate. The above consequences are reflected in negatively on the efficiency and performance of human and financial resources, directly affecting their performance and business growth. The pourpose of this article analyzes the importance of administrative management in SMEs and its relationship with variables that induce leadership, alliances, trained personnel, innovative strategies and financial resources. In order to provide a comprehensive understanding of how these aspects influence the success and growth of SMEs, this research presents a methodology of quantitative and empirical-analytical approach, and implements a nonexperimental design of transversal type. Finally, this research shows that the administrative management of SMEs is closely related to leadership, strategic alliances, people management, strategy implementation and resource management. Furthermore, it states that good management of each of the variables, are fundamental to the success and growth of companies and their effective management can make the difference between the success and/or failure of each of them.

keywords: Administrative management, SMEs, leadership, business strategy, alliances and resources


VARIABLES INFLUYENTES EN LA GESTIÓN ADMINISTRATIVA DE LAS PYMES

Resumen: La implementación y eficiencia de la gestión administrativa es un reto común en las pequeñas y medianas empresas (pymes), inducido por diversos factores, entre los que destaca la carencia de un equipo especializado y experimentado en las acciones y decisiones que deben tomar las empresas y ser funcionales, generando una mala gestión y dificultades en la orientación estratégica, liderazgo, capacitación y planificación, amenazando la sostenibilidad de las pymes que dirigen o colaboran. Las consecuencias anteriores, se reflejan negativamente en la eficiencia y rendimiento de recursos humanos y financieros, afectando directamente su desempeño y crecimiento empresarial. El objetivo del presente artículo analiza la importancia de la gestión administrativa en las pymes y su relación con las variables clave que la conforman, como el liderazgo, alianzas, personal capacitado, estrategias innovadoras y los recursos financieros. Con el fin de proporcionar una comprensión integral de cómo estos aspectos influyen en el éxito y crecimiento de las pymes, esta investigación presenta una metodología de enfoque cuantitativo y empírico-analítico, e implementa un diseño no experimental de tipo transversal. Finalmente, esta investigación demuestra que, la gestión administrativa de las pymes está estrechamente relacionada con el liderazgo, las alianzas estratégicas, la gestión de personas, la implementación de estrategias y la gestión de recursos. Además, expone que un buen manejo de cada una de las variables, son fundamentales para el éxito y el crecimiento de las empresas y su gestión eficaz puede marcar la diferencia entre el éxito y/o el fracaso de cada una de ellas.

Palabras clave: Gestión administrativa, pymes, liderazgo, estrategia empresarial, alianzas y recursos


Introduction

Administrative management is one of the most common problems faced by SMEs, which often do not have a specialized team in this area, causing mismanagement (Peña et al., 2022). Other business management challenges for SMEs include lack of strategic direction, lack of leadership, training, education, and planning (Soledispa & Pionce, 2022)lack of leadership, training, education, and planning (Blanco & Font-Aranda, 2022). It is important to emphasize that management in an organization is the pedestal of all business activities, so it is extremely important to create a solid foundation on which to build all activities and decisions that are priorities for business success. 


According to the above, deficiencies in administrative management threaten business sustainability (Mendoza, 2017), due to the complexity and diversity of their management, both in terms of human and financial resources (Arturo Delgado et al., 2020) and the lack of knowledge in logistic and planning aspects, low productivity and low quality in processes, products and services, which are some of the problems that arise in business sustainability. In addition, increasing competition and the difficulty of accessing financial resources also represent challenges for these companies.


At the micro business level, common problems in SME management can be identified, among which are: lack of planning, many SMEs do not carry out adequate planning, which can result in a lack of clear direction and objectives; lack of education and training, SME entrepreneurs and workers often lack specific knowledge and skills in areas such as accounting, financial management and general administration; lack of a dedicated management team can result in inefficient management of resources, processes and daily operations; lack of company vision, many SMEs do not have a clear vision of their business in the long term, which hinders strategic decisions and sustainable growth (Riquelme-Castañeda et al., 2022). Lack of effective leadership can negatively affect the organization, team motivation and the ability to make important decisions, causing the company to fail. 


These problems can have a significant impact on the performance and growth of SMEs, so it is important to actively address them and seek appropriate solutions. These solutions include staff education and training, hiring of management experts, and implementation of effective planning and leadership strategies (Demuner et al., 2022). 


The objective of this paper is to identify the importance of administrative management in SMEs and its relationship with key variables such as leadership, partnerships, people, strategies and resources, in order to provide a comprehensive understanding of how these aspects influence the success and growth of SMEs. This research analyzes companies dedicated to the leather goods sector, i.e., products that are manufactured with leather and fur processed for footwear and other clothing products. The study area is in Colombia since according to El Programa de Transformación Productiva (2018), this sector is strategic due to its high export potential, innovation and product quality.


Small and medium-sized enterprises (SMEs) in the leather goods sector in San Juan de Pasto, Colombia, like all others, are facing market globalization processes and must adapt to the different economic models that are being developed at the international level. In view of this situation, they must generate value in their processes through the development or adoption of an efficient administrative management model that will enable them to generate a competitive advantage and contribute to their sustainable development over time. This involves defining goals and objectives, planning resources, optimizing production, reducing costs and improving quality.


Once these goals have been achieved, it will be possible to reach levels of competitiveness to face the challenges that global markets bring with them, and this is where understanding the variables that influence the efficiency of administrative management is fundamental, since it allows identifying the strong points to be strengthened and the weak points that need to be modified and innovated. 
 

Theoretical framework

Small and medium-sized enterprises are considered the engine of an economy, either for their contribution to a country's production or to the generation of employment, (Kantis et al., 2002). SMEs have evolved over the years, covering a variety of sectors and businesses, these companies have been, are and will be an important part of the global economy, contributing to economic, social and technological development (Gonzalez et al., 2021). In recent years, SMEs have experienced greater growth compared to large companies, due, among other variables, to increased competition and technological progress (Carrión González, 2020).


Small businesses have been forced to adopt new strategies to remain competitive in the global marketplace, (Heredia Bustamante et al., 2020)this situation has led many SMEs to implement new technologies to improve their production and sales processes, as well as to improve their online presence (Núñez, 2019). In addition, SMEs have also been boosted by the development of new business models, such as e-commerce, digital marketing and business-to-business collaboration. These new trends have given SMEs access to a larger potential customer base, as well as better opportunities for innovation and development. Their evolution has also had a positive impact on regional economies, as these companies provide local jobs and boost the economic development of their regions by circulating money in the geographic area where they operate (Urdaneta et al., 2021). At the same time, they are contributing to the growth of the productive sector through their participation in global value chains (Contreras & García, 2019).


Globally, the development of SMEs has been diverse, but a common denominator is the fact of finding internal and external factors in each country, which have not allowed an appropriate evolution. This situation is no different in Latin American countries, where SMEs are faced with internal factors such as: lack of knowledge management, lack of qualified personnel to perform certain tasks, lack of adequate infrastructure or lack of investment in updating and improving the means of production. In addition to these elements, there is the difficulty in accessing credit, due to their poor financial and tax practices (Maza et al., 2021).


One of the characteristics of SMEs at a global level is the fact that their origin is family-based, and once they manage to consolidate themselves in regional markets, they launch themselves into national markets, and later face international markets (Marco & Stupo, 2020).


Faced with the new forms of the economy, small and medium-sized companies must orient their actions towards schemes that allow them to be sustainable in international markets, identifying and maximizing their internal advantages, such as: leadership, trained, suitable and committed personnel, and above all the flexibility of their organizational structure, variables that will allow them to better face the obstacles that the environment brings with it. 


One of the most important and influential variables to achieve competitiveness at a global level is the degree of knowledge that the owners of SMEs have about their company (Marulanda et al., 2016)in order to achieve this, it is essential that their managers plan their strategies, based on the availability of economic and human resources available to them. In addition, this is where efficient knowledge management is needed, by linking these strategies with adequate practices of creation, dissemination and appropriation of knowledge (Carrascal et al., 2021). 


In Latin America and the Caribbean, according to the Inter-American Development Bank (IDB), small and medium-sized companies are a fundamental part of the productive ecosystems, since they represent 99% of the companies and generate 67% of the employment in this region. However, all companies in this area face common problems: disconnection with markets, lack of financing opportunities, difficulty in finding reliable contacts, among others, (Linares et al., 2020).


The European Model for Quality Management (EFQM) is a quality management model developed by European organizations to improve performance. This model is a standard for regional, national or international quality awards. Its use has been generalized as a model for evaluating organizations and comparing them with other organizations. It is used as a management model, and one of its purposes is to identify the company's expectations and, based on them, to plan its operation. Another purpose of the EFQM model is that it is used as an instrument of organizational self-assessment, since it allows to identify the areas in which the organization requires improvement (Enriquez & Enriquez, 2019).


The EFQM principles are divided into categories such as leadership, strategy, resources, processes, results and relations with the environment. Each of these categories includes several criteria that must be met to achieve the desired level of excellence. The main characteristics of the model are primarily oriented towards a results-based approach, i.e., it focuses on achieving the desired results through customer satisfaction, improved process effectiveness and efficiency, innovation and leadership.


In addition, the model considers companies as a complex system of parts, sections or areas related to each other, implying that each leader must seek or design strategies to understand and, above all, allow a perfect fit between processes, people, resources, alliances and external factors to achieve the desired results (Enriquez & Enriquez, 2019). 


The EFQM promotes the process-based approach, which means that company managers must identify and evaluate their processes so that they are able to determine how to improve effectiveness and efficiency. Another characteristic of the model is oriented towards continuous improvement, establishing pertinent and realistic objectives that are measurable and, above all, susceptible to systematic improvement in favor of business development (Guevara, 2020).


The adoption and implementation of this model in a company or an economic sector that seeks to improve its quality, either in processes or products and services, is a viable option, due to its worldwide recognition and acceptance. It is a holistic approach, focusing on understanding all aspects of the business and how they relate to each other, allowing them to identify problems from a broader perspective (Quintanilla, 2022). 


For the EFQM model, a good strategic leadership direction, managed from human talent, available resources, strategic alliances and processes, should generate excellent results in terms of products, customers, people and society in general. According to (Quintanilla, 2022), the EFQM is used when seeking to achieve sustained success in a company, based on strong leadership and the design of clear and effective strategic plans.


The criteria that make up the 2013 EFQM model are as follows: Leadership: refers to the way in which the organization is led and managed, from top management to the lowest levels, encompassing the organization's mission, vision and values, the way in which strategies and objectives are established, as well as communication and the way in which decisions are made. 


Strategy: refers to the way in which companies formulate and achieve their vision and strategic objectives, including the definition of objectives and strategies, identification of key success factors, identification of risks and implementation planning. 


People: indicates the route through which companies manage and develop the talent of their employees. This criterion includes employee motivation, skills development, recruitment and selection, and the creation of a healthy work environment. 


Resources: refers to the way in which the organization manages its resources. This includes the management of financial, material, technological, human and information resources. 


Processes: refers to the management of its processes, the way they are measured, the mechanisms for identifying problems and the continuous improvement of processes.


It includes the presentation of the paper and the analysis of the literature on the subject, with special emphasis on previous research that justifies the study and that will be contrasted in the discussion of the results.
 


Method

The methodological design was based on a quantitative and empirical-analytical approach. The target population is the leather goods sector in San Juan de Pasto, which has 46 legally constituted companies. A sample is not used, since we worked with the total population. The researcher selected this population because of the importance of this sub-sector in the regional economic environment, its great contribution in terms of employment generation and belonging to a relevant regional cluster in the department of Nariño, Colombia.


The instrument used to collect data for this research was validated through Cronbach's alpha, the result obtained was 0.87, which is considered good (Bibiloni et al., 2020). The instrument has been reviewed and validated by eight professionals, including four experts and four judges. The experts are people knowledgeable about the reality and customs of the leather sector, while the judges are researchers who collaborate in the evaluation of the items in the questionnaire. The validation of the instrument seeks to guarantee the congruence and quality of the research objectives and indicators.


Subsequently, the instrument was applied directly by the researcher to each of the owners and/or managers of the leather goods companies. With the information, the respective data analysis was carried out, which provided an understanding of the behavior of the variables that influence the administrative management of the SMEs. The results obtained are presented in double-entry tables, in which the perceptions of SME managers regarding the influence of the variables leadership, alliances, strategies, personnel and resources on their business management are represented. Subsequently, conclusions are drawn from the discussion of the results obtained.       


Results

 

Based on the theoretical postulates and taking the information collected from the population under study, we proceed to identify the relationship between business management and leadership, strategies, people, resources and alliances at the level of SMEs in the leather sub-sector of San Juan de Pasto. 


Table 1 shows that the four additional dimensions that make up the model, grouped in results in clients, people, society and key, present low Cronbach's alphas (0.509, 0.510, 0.576 and 0.438) respectively, and that at a general level it is recommended that those with a Cronbach's alpha coefficient of less than 0.7 be omitted from a study, because it indicates low internal consistency of the questions or items that make up its dimension, bringing as a consequence that they are not reliably measuring the construct to be evaluated, (Bibiloni et al., 2020).


By having a low Cronbach's score, the questions that make up these dimensions are not consistently correlated with each other, which may affect the validity and reliability of the results obtained. Therefore, a low internal consistency can generate greater variability in the responses and make it difficult to interpret the results, so its omission from the study helps to guarantee the reliability and validity of the results of the study. On the other hand, the dimensions of leadership, strategies, people, alliances and products, process and services, measured through their Cronbach, are framed as reliable and it was on them that the processes of identification of the relationship with the administrative management of the SMEs of the leather goods sector of San Juan de Pasto were oriented. 


Table 1
Reliability level between dimensions
 

CRITERIA

ALPHA CRONBACH

Leadership

0,903

Strategies

0,760

Persons

0,806

Alliances and resources

0,784

Processes/products and services

0,812

Customer results

0,509

Results people

0,510

Company results

0,576

Key results

0,438

Note. The table presents the results of the dimensions in order to determine which are susceptible to reliability. 
 

A tool that serves as a thermometer to identify the critical points in an organization is related to the level of acceptance or rejection of a certain situation, in the case of the variables that influence administrative management, Table 2 shows the results obtained from the application of the survey to each owner/manager of the leather goods companies in San Juan de Pasto, table 2 shows that a high percentage (48%) of them consider that the leadership dimension, "Almost always", is adopted by them as a personal commitment in the definition, development and communication of the mission, vision, values and culture of quality in their organizations; while it is true that 24% consider that they "always" do it, much attention should be paid to those segments that say that "in some" cases they do not do it, because in administrative management the influence of good or bad management of a variable cannot be underestimated, because it can become a weakness with major impacts.  
Similarly, a high percentage of the strategy, people, alliances and process variables (57%, 48%, 59% and 59%) coincide in stating that they "almost always" adopt these concepts within their organizations, a factor that, although it is considered good, there is a percentage that not only in "some cases" takes them into account.     
At a general level, it can be stated that this group of managers consider that a high percentage of their management of the following dimensions: leadership, strategies, people management, alliances and resources, and processes, products and services are well oriented by them.  
 

Table 2

ORIENTATION Leadership Strategies Persons

Alliances and resources

Processes, product and service.

Totals
Yes, always  

12 (24%)

12 (24%)

13 (28%)

4 (8%)

7 (15%)

48
Yes, almost always 

22 (48%)

26 (57%)

22 (48%)

27 (59%)

27 (59%)

124
Yes, in most cases

5 (11%)

8 (17%)

9 (20%)

12 (24%)

8 (17%)

42
Yes, in some cases

7 (15%)

0

2 (4%)

3 (7%)

4 (8%)

16
No, or practically no 

0

0

0

0

0

0

TOTAL

46

46

46

46

46

230

Orientation or level of acceptance for each dimension

Note. The table shows the orientation of the managers of the leather SMEs on the management they consider they are exercising, as well as the participation of the level in each dimension. 

The dimensions of leadership, strategies and resources, people, alliances and processes, products and services can influence administrative management in various ways, from the establishment of clear objectives and action plans to the development of a motivational plan for the work team and the establishment of efficient processes. It is therefore essential to manage these factors effectively to ensure the success of the organization. 
Leadership plays a crucial role in the administrative management of SMEs, a good leader is able to motivate his team, set clear goals and encourage creativity and innovation, therefore, an effective leadership drives the growth and development of the company, while promoting a positive and productive work environment (Arjomandi, 2022). An effective leader sets clear goals, provides guidance and support, and fosters a positive work environment. For example, a manager can use leadership skills to inspire employees to achieve company goals and promote collaboration among team members. Strong leadership can influence decision making, internal and external communication, and employee motivation to achieve the organization's goals (Leiva-Guerrero et al., 2022).
Strategic alliances are also important in the administrative management of SMEs. Establishing alliances with other companies can provide opportunities for growth and expansion by allowing access to new markets, resources and expertise, and can also help SMEs to share risks and costs, which can be especially beneficial in a competitive and external business environment, and motivate employees to achieve the organization's goals (OECD/CAF, 2019). For example, a manager may negotiate an alliance with a service provider to reduce costs or improve product quality. It is the duty of the administrative management to search for potential alliances, negotiate terms and conditions, and manage the relationship with strategic partners.
People, or internal collaborators, are another key variable in the administrative management of SMEs; having a talented and committed team is fundamental for the success of any company. Effective management involves recruiting, selecting, training, evaluating performance and retaining top talent, as well as fostering an inclusive and collaborative work environment (López, 2018). In this case, a manager can develop training programs to improve the skills and competencies of employees, which in turn contributes to the growth and development of the company.
A fourth variable is strategies, which are considered essential elements in the administrative management of SMEs. A well-defined strategy can help companies stay on track and achieve their goals, which involves careful planning, allocating resources efficiently and adapting to changes in the business environment (Armijos et al., 2020). These resources can include both tangible assets (money, equipment and technology) and intangible assets (the company's knowledge and reputation). Efficient management of resources involves optimizing their use and ensuring their long-term availability.
An efficient use of resources implies that the administrative management of the SME was also efficient. Efficient management of available resources, both tangible and intangible, is an art that must be handled by the business management, since this area is in charge of distributing the budget, equipment, technology and other assets necessary for the operation of the company. For example, a manager can implement an inventory tracking system to optimize the use of resources and avoid waste.
Understanding these relationships and managing them effectively can contribute to the success and sustainable growth of SMEs. Figure 1 illustrates how administrative management is interconnected with leadership, strategies, people, resources and partnerships, each of which plays an important role in the success of administrative management and contributes to the achievement of organizational objectives.

Figure 1
Dependence on administrative management

At a general level, other variables that can positively or negatively affect the administrative management of SMEs are identified:
Economic environment: including factors such as gross domestic product (GDP) growth, inflation, interest rates and international trade, can have a significant impact on the administrative management of SMEs. For example, in a favorable economic environment with high growth and low inflation, SMEs may experience increased demand for their products or services, which can lead to further expansion and profitability. On the other hand, in an unfavorable economic environment with a recession or high inflation, SMEs may face financial difficulties and a decrease in demand.
Technology: Technology is having an increasing impact on the administrative management of SMEs. The adoption of new technologies can improve operational efficiency, internal and external communication, and decision making (Linares et al., 2020). On the other hand, lack of investment in technology or failure to upgrade can leave SMEs lagging behind in terms of competitiveness and efficiency. 
Currently, ICT as the basis of new technologies in organizations represent a potential benefit to increase not only the productivity of companies, but also their competitiveness, optimizing resources and allowing information flows to increase, so that managers of SMEs have an additional tool for efficient decision-making (Labanda et al., 2021).
As a result of the new conditions of globalization and increasing competitiveness, companies are able to develop new ideas to adapt their business strategies and take advantage of the business opportunities that have appeared in the market to ensure their continued success. 
Financial resources: the availability and management of financial resources is crucial for the administrative management of SMEs. Lack of capital or access to financing can limit the growth and development of the company, as well as hinder the implementation of strategies and the acquisition of necessary resources. In addition, effective financial management, including proper budget planning and efficient cash flow management, can strengthen administrative management and enable sustainable growth (Sarduy González et al., 2018).
Competition and market: Market competition and market dynamics can also affect the administrative management of SMEs (Cañar & Hidalgo, 2021). The presence of strong competitors, changes in consumer preferences or fluctuations in demand may require adjustments in the company's marketing, pricing or positioning strategies.
Figure 2 identifies variables that directly or indirectly affect administrative management. 
 

Figure 2
Variables related to Administrative Management



Note. The figure shows variables that are indirectly related to administrative management in SMEs.

It should be noted that these variables may affect each company differently and that their impact may vary according to the context and the industry. Effective administrative management involves identifying and understanding these variables, as well as implementing appropriate strategies to meet the challenges and take advantage of the opportunities they present.
To achieve this objective, it is necessary to identify the weight that SME managers have with respect to the degree of appreciation of their level of implementation. Figure 3 shows that 54% of these managers consider that overall these factors almost always meet their objective, followed by 21% who consider that they always apply them. However, 21% and 17% are in the crisis zone, because they feel that these factors are rarely, if ever, taken into account in administrative management.  

Figure 3
Level of compliance for each dimension

Note. The figure shows the degree to which SME managers perceive the level of application of each factor in their companies. 

At a general level, the perception of the applicability of the criteria related to administrative management in SMEs in the leather sector is high; however, the managers of SMEs should not overlook the 7%, since the weak points in an organization may refer to specific concerns or problems, which may generate difficulties in productivity and business sustainability. In this situation, corrective measures must be taken to strengthen operational resilience, improve security in the company, design personal solutions for each client and/or implement effective management tools. 
 


Conclusions

It can be observed that the variables leadership, alliances, people, strategies and resources are related to each other, which suggests that there is a positive relationship between them, which implies that good leadership, the effective implementation of strategies, the effective management of people, the ability to establish alliances and use resources efficiently, and the effective implementation of processes and systems, can influence each other in the administrative management of small and medium enterprises in the leather sub-sector of San Juan de Pasto. These findings may be useful in understanding the importance of these variables and how they can affect the performance and success of SMEs. 


Administrative management plays a key role in the success and growth of SMEs. Effective leadership, strategic alliances, people management, strategy implementation and efficient resource management are key variables that must be considered and managed effectively for the efficiency and success of SMEs. Good leadership can motivate the team and foster innovation, while strategic alliances can provide opportunities for growth and expansion. People management is crucial to have a talented and committed team, and the implementation of well-defined strategies helps to achieve the company's objectives. Finally, the efficient management of resources, both tangible (their own infrastructure) and intangible (their knowledge of design techniques, their good name and reputation for quality products), is essential to ensure the financial stability and sustainable growth of SMEs. 


Effective administrative management focused on these variables can make the difference between the success and failure of a company.
 


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