Hinhalagoda lekamalage pulsi kavindya sandeepani ariyarathna

Question 12 
With the current political and social status in the country, do you think the SMEs can 
survive for a long time? (See figure 2.14) 
 
Political and Social factors are the most influencing factors towards the SMEs in any 
country. When it comes to political factors,these variables all have to do with how and to what 
extent the government intervenes in the economy or in a particular business.Basically, here is 
where a government's effect on your business is classified.Government policy, political stability 
and instability, corruption, foreign trade policy, tax policy, labor legislation, environmental law, 
and trade restrictions are all examples of this.In addition, the government may have a significant 
impact on a country's education system, infrastructure, and health-care policies.All of these 
considerations must be examined when determining the desirability of a potential market. 
The socail factors are the demographic traits, norms, customs, and values of the 
population in which the institution operates are represented by this dimension of the general 
environment.The rate of population growth, demography, income distribution, education levels, 
safety emphasis, health awareness, lifestyle attitudes, and culture differences are all factors to 
consider.When it comes to marketing to specific customers, these factors are very crucial.It also 
speaks something about the local workforce and their willingness to work under difficult 
circumstances. 

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The intention of the question number 12 is to understand how the responders feel about 
the current social and political status of the country.Since the 2019 Presidential Election,the 
country had went through a lot of changes not only social but also political.Along with the 
impact of covid19, the country’s export sector completely toppled as the apparel industry was 
heavily affected by the sickened employees.This started a chain reaction which made the 
Government to take additional loans from various countries such as China, Oman, Bangladesh 
to fund the imports of the country.Sri lanka even had to use most of the foreign reserves as 
mentioned earlier in the Figure2.9 to cover the expenses of some imported items. 
Figure 2.14 Response to Question 12 (Author Construction) 
32.9% have responded that they are not much affected by Covid, These might be the 
SME owners of SMEs who are providing services and products for essential services such as 
Food and agriculture, Medicine,Public Safety , Energy etc.The highest percentage has 
responded as They are not affected much at the moment but they are expecting the rules to be 
changed as soon as possible.These might be the Owners of SMEs which has a strong Business 
base which was not affected by the sudden shortage of customers and supplies.They are 
currently holding the position but as soon as the emergency funds run out they also would have 
to check for more options.Next there is a 14.3% of responders who says they are already looking 
for other ways of income.These are the SME owners who didnt have a management policy 
about their day to day businesses and most probably might be the Micro Business Owners who 
work with least number of employees.Again the fact of lack of knowledge can be suggested for 
these responders.Finally there is a 7.1% which says they will have to sell their business soon or 
in other words, going to be bankdrupt.These might be the small Business owners who had some 
emergency money saved and have been using it to run the daily business needs but eventually 
the expenses has exceeded the income so now they are ready to announce the bankruptcy. 

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