Strengths of small to medium-sized companies in Germany and the consequences for the financial management

German small and medium-sized companies are characterised by a considerable resistance to crises in spite of less favourable general conditions compared to large groups. Despite the recent years of crisis, the employee numbers at German small and medium-sized companies have on average risen. In addition, during the economic collapse in 2008 and 2009 they were considerably less affected. According to a survey by the German institute for research into medium-sized companies (IfM), in contrast to this large groups in this period reduced their average employment rate.

A further strength which allows German small and medium-sized companies to set themselves apart from large groups is the excellent flexibility in relation to customers and the market. These companies are able to implement production more quickly because they produce smaller batches. They are therefore able to fulfil special customer requirements. This strength will remain in future and continue to influence the German economy.

In addition, it should be mentioned that the way German small and medium-sized companies manage their personnel also enables the employees to achieve high productivity. In this context the scope of activities of the employees is characterised by job enrichment, job enlargement and participation which considerably helps to avoid monotonous work. Whereas larger groups tend to be engaged in bureaucratic standardisation and regulation due to the complexity of their organisation, the small and medium-sized companies due to their smaller degree of differentiation are able to offer better arrangements in relation to the workplaces. This avoidance of monotonous work leads to higher motivation and therefore increases the productivity of the human resources.