Should the MSMEs be Governed the Corporate Way?

Abstract

This article makes a case for micro small and medium enterprises (MSME) governance as distinct from corporate governance even in instances where MSME firms are organised as bodies corporate.The credence for the suggestion for a separate framework for the governance of the MSME sector comes from (a) the contribution of the MSMEs to the economic and social development in their respective settings, (b) systemic nature of their ailments, (c) institutional and organisational contingency theory of corporate governance and (d) the theory of articulation (upward delegation) of decision making.The model of articulation of governance for the MSME sector (MAG_MSME) developed in the article provides for sharing of the costs and responsibility of governance by the participants in the articulation. Besides, it also addresses to the firm-level antecedents of governance and examines the roles of the entrepreneurs and their families in the MSME governance.