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RESEARCH PRODUCT

Performance and Organisation of Very Small Firms in the Supply Chain

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The authors present some results of an empirical research aimed at investigating the evolution of the relationship between large purchasing firms operating on the international market and very small subcontractor firms. The factors that have proved critical in establishing the process of subcontracting are identified and analysed. Under pressure from the high level of international competition, purchasing firms are beginning to demand better qualified and better skilled subcontractors. For many very small firms it effectively means that they are excluded from the large firms’ production cycle or are relegated to a lower position in the supply chain. There are three possible evolutionary paths open to the very small firms, paths which are not alternatives: operational and management repositioning, strategic repositioning in the area of the “product” and strategic repositioning in the area of the “market”.