Are MSMEs More Resilient Compared to Large Firms in Terms of Global Supply Chain Disruptions? | RISE Research

This research investigates how Micro, Small, and Medium Enterprises (MSMEs) compare with large firms in their ability to withstand and recover from global supply chain disruptions. By examining qualitative primary data and existing literature, the study analyzes the trade-off between efficiency and flexibility — the two key determinants of organizational resilience. It argues that while large firms typically excel in efficiency due to economies of scale, access to capital, and standardized operations, their rigid structures and bureaucratic hierarchies often reduce their adaptability during crises. MSMEs, in contrast, though less efficient, possess inherent agility through faster decision-making, workforce reorganization, cost flexibility, and personalized customer engagement, allowing them to pivot more effectively in volatile conditions such as the COVID-19 pandemic.

The paper contextualizes this argument by defining MSMEs and large firms, outlining their structural and operational characteristics, and linking these to performance outcomes during supply chain shocks. Drawing from case examples and secondary data on employment and GDP contribution, the research highlights the significant role MSMEs play in sustaining economies — employing over 70% of the global workforce and contributing up to 40% of GDP in developing markets. Through theoretical frameworks and descriptive analysis, it identifies how flexibility across dimensions such as production, workforce management, and service delivery strengthens the adaptive capacity of small enterprises.

Ultimately, the study concludes that resilience during global disruptions depends not solely on scale or efficiency, but on a firm’s ability to maintain operational agility amid uncertainty. MSMEs emerge as vital stabilizers in times of crisis, underscoring the importance of policies that enhance their flexibility without compromising competitiveness. For large firms, the research suggests a hybrid model that integrates efficiency with adaptive mechanisms — fostering innovation, decentralizing decision-making, and strengthening local supply chain partnerships to balance performance with preparedness in an increasingly unpredictable global economy.