International Journal of Management, Knowledge and Learning, 3(1), 23–42
The Role of Serbian Higher
Business Education in Overcoming
the Challenges of SME Managers
Maja Kočevar
Carinthia University of Applied Sciences, Austria
Dietmar Sternad
Carinthia University of Applied Sciences, Austria
In this exploratory study, in-depth interviews with Serbian managers of small-
and medium-sized enterprises (SMEs) were conducted to identify their main
work-related challenges and the extent to which formal higher business ed-
ucation has helped them to overcome these challenges. Serbian SME man-
agers find the main challenges to be related to HR- and marketing-related
issues, followed by country-specific problems, such as dealing with bureau-
cracy, difficulties in obtaining financial resources, and coping with delayed
payments. They see considerable deficits in the current system of higher
business education, specifically referring to a lack of practice-oriented teach-
ing methods and insufficient cooperation between the universities and the
business sector.
Keywords: business education; SME; managerial challenges; Serbia; learning
Introduction
A country’s economic development is significantly influenced by both the
amount and success of small and medium-sized enterprises (SMEs) (Bir-
chall & Giambona, 2007), as well as the quality of higher business educa-
tion (HBE) (Brewer & Brewer, 2010). SMEs form the backbone of the Ser-
bian economy. In 2010, 83,278 Serbian SMEs employed 611,912 persons,
while the country’s 509 large enterprises provided 412,884 jobs (Statistical
Office of the Republic of Serbia, 2012). The challenges that SME managers
are faced with differ from those of large enterprise executives. HBE, which
we define as tertiary education that includes bachelor and master studies
focusing on business-related social science studies (e.g. business studies,
management studies, finance, banking, organisation, marketing, and busi-
ness administration), often focuses on the management of large companies
rather than taking care of the specifics of SMEs.
In Serbia, the national higher education scheme is reorganised according
to the Serbian National Qualifications Framework (SNQF) for Higher Educa-
tion in accordance with the Bologna process (Damnjanovic, 2010; EHEA,
www.issbs.si/press/ISSN/2232-5697/3_23-42.pdf
24 Maja Kočevar and Dietmar Sternad
2003). This is also an opportunity to evaluate the current situation and
effectiveness of HBE in Serbia from the SME managers’ point of view.
In the literature, we can find general concerns about the effectiveness
of HBE. For decades, authors have been claiming that business schools
and business-related university programs often fail to adequately prepare
students for a successful managerial career (Livingston, 1971). In this pa-
per, we review the literature on HBE effectiveness, explore the challenges
of SME managers with a specific focus on the situation in Serbia, and eval-
uate to what extent the Serbian HBE, in its current form, contributes to
mastering these challenges.
Theoretical Background
Many researchers have been studying the effectiveness of business educa-
tion at the university level. Therefore, we will review the existing research
in this field. Subsequently, we will also discuss the specific challenges that
SME managers in general, and in Serbia in particular, are facing.
Effectiveness of Higher Business Education
In a classic Harvard Business Review article, Livingston (1971) strongly
criticises existing business education programs and questions the effec-
tiveness of business schools. This article triggered a general discussion
about the effectiveness of formal business education, first in the US and
later also in Europe. Critical voices (e.g. Brotheridge & Long, 2007; Muller
& Porter, 1997; Quelch, 2005) especially questioned the teaching methods
that are mainly theory-based (Atwater, Kannan & Stephens, 2008; Benjamin
& O’Reilly, 2011; Culliton, 1952; Jurše, 2009; Livingston, 1971; Pfeffer &
Fong, 2002; Porter & McKibbin, 1988), the learning environment (Atwater et
al., 2008; Muller & Porter, 1997; Stukalina, 2008), and the teaching quali-
fications of faculty members (Benjamin & O’Reilly, 2011; Bennis & O’Toole,
2005; McGrath Gunther, 2007). Pfeffer and Fong (2002) argue that many
management teachers are lacking professional managerial experience, and
are therefore often not able to effectively transfer the skills necessary for
the managerial profession to the students. On the other hand, McGrath
Gunther (2007) advocates a combination of both academic faculty and ex-
perienced professionals.
Furthermore, a stream of criticism also revolves around a strongly
market-driven education environment. In a competitive climate in which
schools focus on profit rather than on student learning (Jurše, 2009), the
influence of outside organisations and politics on HBE can increase (Muller
& Porter, 1997). Additionally, a trend towards ‘edutainment,’ emphasizing
fun and simple information rather than in-depth thinking and learning, has
been identified as an effect of this market-driven education environment
(Holbrook, 2004; Jurše, 2009).
International Journal of Management, Knowledge and Learning
The Role of Serbian Higher Business Education 25
A further frequently mentioned reason for the alleged low effectiveness
of HBE is poor adaptation of programs to a rapidly changing external environ-
ment, as technologies and markets develop at an unrelenting pace (Atwater
et al., 2008). Stukalina (2008), for example, argues that curricula, con-
tents, and teaching methods should become more flexible to adapt to the
technological, managerial, and pedagogical changes. Moreover, Pfeffer and
Fong (2002) point out the importance of connecting business management
with other professions, following their observation that cross-functional so-
lutions are often needed in dynamic environments.
Mintzberg and Gosling (2002) even claim that it is not possible to teach
management in business schools solely on a theoretical basis, and that
only the students with previous managerial experience are able to develop
the essential managerial skills. Therefore, different authors call for an in-
tegration of multidisciplinary education, teamwork, and managerial practice
in HBE (Benjamin & O’Reilly, 2011; Pfeffer & Fong, 2002; Stukalina, 2008).
Higher Business Education in Serbia
In 2003, a modernization process of the higher education system in accor-
dance with the Bologna framework was launched in Serbia. In 2010, the
new Serbian National Qualification Framework came into action based on
the Bologna model (EHEA, 2003). With the preparation of the new frame-
work, the European Commission played an important role in shaping the
new educational system, as well as in the reorganisation of the study pro-
grams in Serbia (Jurše, 2009). Through these developments, the Serbian
HBE has become structurally comparable with HBE in the European Union.
The number of social sciences, business, and law graduates rose from
9,899 in 2009 to 11,216 in 2010 (Statistical Office of the Republic of
Serbia, 2013).
However, at the same time research results reveal that students only ac-
quire limited problem-solving skills and competences for implementing the-
ory into practice (Damnjanovic, 2010). Further challenges that are shaping
the Serbian higher education environment are connected with a changing
role of management in society, a changing political and economical environ-
ment in Serbia (especially the influence of politics on education), and the
increasing internationalization of higher education.
Serbian HBE was also criticised for poor cooperation between business
and education sectors (especially regarding the development of education
programs according to the real market needs), insufficient cooperation be-
tween students and local companies (in real case projects, master theses
or seminar papers), and a lack of assistance for graduates to find their first
job among partner companies (Damnjanovic, 2010). Suggestions for the im-
provement of the Serbian HBE system include modernization of the general
teaching approach, including enhanced teamwork, providing opportunities
Volume 3, Issue 1, 2014
26 Maja Kočevar and Dietmar Sternad
for applying problem-solving strategies, and searching, combining and eval-
uating knowledge from different sources (Smirnov, 2008), reduction of gov-
ernment influence on education, increasing the proficiency of teaching pro-
fessionals in using modern teaching methods, and offering programs that
are more relevant for current labour market requirements (Damnjanovic,
2010).
General Challenges for SME Managers
In today’s dynamic, globalised environment, SME management has been
increasing in complexity, while in the past, many SME managers often re-
lied mainly on business instinct (Engstrom, 1967). Rutherford, Buller & Mc-
Mullen (2003, p. 41) argue that ‘daily there are more than thousands of
firms that do not succeed in business mainly because of their managerial
incompetence.’ Success of SMEs thereby depends on recognizing key man-
agerial challenges and finding well-defined solutions for those challenges
(Rutherford et al., 2003).
Commonly mentioned challenges for SME managers can be categorised
into the following (Dearborn & Simon, 1958; Huang & Brown, 1999; Ruther-
ford et al., 2003; Terpstra & Olson, 1993; Walsh, 1988):
•Marketing and sales challenges for SME managers include a lack
of financial resources for marketing (Weinrauch, Mann, Robinson, &
Pharr, 1991), poor marketing knowledge and competences (Huang &
Brown, 1999; McGrath & O’Toole, 2011), weak customer communi-
cation and public relations, sales, choosing the right target market,
searching for the best location, pricing, and competition assessment
(Dodge & Robbins, 1992; Huang & Brown, 1999).
•Human resource management challenges for SME managers include
the complexity of the HR management system and a lack of compe-
tences to handle all aspects of it, especially the selection process, HR
planning, performance and reward systems, training, paperwork, and
skill development of employees (Baird & Meshoulam, 1988; Tocher &
Rutherford, 2009).
•Financial challenges for SME managers include a lack of knowledge,
especially in accounting, financial planning, poor cash-flow, financial
resource allocation, approval of credit and loans, and participating
in government grant application processes (Dodge & Robbins, 1992;
Huang & Brown, 1999). Furthermore, SME managers are usually ex-
pected to have more difficulties in cooperating with banks, as well as
worse conditions for obtaining credits compared to their large corpo-
ration counterparts (Visinescu & Micuda, 2009).
•General management and SME growth challenges: During the launch
International Journal of Management, Knowledge and Learning
The Role of Serbian Higher Business Education 27
and growth phases of a company, it is essential for managers to have
the ability to recognise the opportunities and customer needs, plan,
choose a service or product delivery path, implement new technolo-
gies, establish financial control, delegate tasks, communicate effec-
tively, and take the right decisions at the right time (Dodge & Robbins,
1992; Kontinen & Ojala, 2011; Kroeger, 1974; Shane & Venkatara-
man, 2000). Huang and Brown (1999) argue that many SMEs are
usually established by enthusiastic individuals who in later stages of
the company’s development lack the necessary managerial know-how.
Problems may also arise in SMEs because the entire decision-making
process and responsibilities are focused on one person (Huang &
Brown, 1999; Percy, Visvanathan & Watson, 2010). Further general
management challenges for SME managers include inventory plan-
ning, cost control, organisational design, and dealing with influences
from the external business environment (Dodge & Robbins, 1992).
Also, ethical challenges are more frequently experienced, especially
in an international business context (Jamnik, 2011).
Although most of the issues outlined above are not country-specific,
there are also cultural and institutional factors that can influence the chal-
lenges that SME managers are facing.
Specific Challenges for SME Managers in the Serbian Business
Environment
In the Global Competitiveness Report 2012–2013, Serbia ranked 95th out
of 144 countries (World Economic Forum, 2012), and 92nd out of 183
countries in the Ease of Doing Business report (The World Bank, 2012).
Although the Republic of Serbia is in the process of transition towards a
market economy and has been holding the official status of a candidate for
membership of the EU since 2011, its culture, business, and society are
in many ways still influenced by the communist era, in which Serbia was
an integral part of the Socialist Federal Republic of Yugoslavia (Ognjanov,
2006).
In Serbia, flexibility, tradition, interest, knowledge, and experience are
highly appreciated business values, as is a communication style that is
people-oriented, preferably face-to-face, and very expressive (Ognjanov,
2006; Radonjic, 2010). Building long-term relationships with business part-
ners, gaining trust, and strong personal network connections are seen as
essential for managers doing business in Serbia, as relationship building is
a highly valued business characteristic (Radonjic, 2010).
Another specific challenge for SME managers in Serbia relates to the
legislation and the rule of law. A lack of implementation of the European
Volume 3, Issue 1, 2014
28 Maja Kočevar and Dietmar Sternad
laws in the Serbian legislation and a strong influence of ministries on the
legislation process were particularly criticised in the report of SIGMA, a joint
initiative of the EU and the OECD (OECD, 2011).
The combination of historical heritage, business values, culture, and po-
litical and economic environment causes corruption, which is considered
an important issue in Serbia. In the 2012 Corruption Perception Index, Ser-
bia ranked 80th out of 174 countries (Transparency International, 2012).
Bribery and corruption were found to be widespread in the common pro-
cesses, such as obtaining licences, among the political elites, and in the
form of insider deals and money laundering (OECD, 2005; Upchurch &
Marinkovic, 2011). It is therefore a challenge for managers to stay inde-
pendent and avoid illegal businesses in a country where corruption is still
considered an important issue in the business environment.
Another highly relevant challenge for the Serbian SME managers lies in
obtaining the necessary financing for their business operations and busi-
ness development. This is due to very high interest rates, unstable political
and economic environment, low level of bank trust and high guarantee re-
quirements (OECD, 2005). The most important source of SME financing
still comes from internal financial resources, such as owners’ equity, family
money, and retained earnings (Marchese & Potter, 2006).
Methods
The main goal of the empirical study was to get an inside view of SME
managers’ challenges in Serbia and to explore to what extent HBE is help-
ing managers to cope with these challenges. Following Hatch (2002), in-
formant interviews were used to identify the main challenges perceived by
the Serbian SME managers and the role that HBE plays in helping them to
overcome these challenges. Given the exploratory nature of our study, in-
depth interviews with key informants were preferred to using a survey-based
questionnaire, as richness of data and search for subjective meaning were
important for developing the basic understanding of the managerial chal-
lenges. The interview were based on open-ended questions regarding the
challenges (e.g. ‘Please describe at least three of the most important chal-
lenges that you are facing as a manager in Serbia and explain how you
deal with these challenges?’), higher education (e.g. ‘Please describe what
kind of methods and education style were used at your university?’), and
a combination of both topics (e.g. ‘In your opinion, which were the most
useful skills that you gained during HBE?’). Finally, the interviewees were
also asked to offer some suggestions for the improvement of HBE in future.
The interviews were conducted by the first author during May and June
of 2012. As suggested by Davis (2000), two pre-study interviews were held
with candidates with a similar profile to the interviewees in the main study.
International Journal of Management, Knowledge and Learning
The Role of Serbian Higher Business Education 29
The semi-structured interview guideline was slightly adapted based on the
findings of the pre-study. Pre-study interviews were not subsequently in-
cluded in the analysis.
Twelve in-depth interviews were then conducted, of which nine had an
adequate quality to be used for further analysis and discussion. Due to
the time restrictions, two candidates expressed their wish for shorter inter-
views. The average length of the remaining interviews was 50 minutes (with
a range from 30 to 60 minutes); all interviews were conducted in English
language. The interviewees were also promised complete anonymity.
The contacts were obtained in different ways. Twelve universities from
across Serbia (5 state-run and 7 private) were contacted and asked either
for their alumni contacts, or to forward an introductory e-mail to their grad-
uates. Furthermore, e-mails were sent to 172 Serbian SMEs, and finally,
connections were also made through the Chamber of Commerce, personal
networks, social media including Facebook, Xing, and LinkedIn, and with
the assistance of the interviewees. The final interviews were made either
via telephone or Skype. All interviewees graduated from programs that fo-
cused on economics, management, or business at either a private or public
HBE institution in Serbia. Three interviewees graduated at private institu-
tions, while six interviewees graduated at a public university (see also Table
1 for further information about interviewee profiles).
Standard content analysis procedures were used to elicit the main con-
structs that the respondents referred to in the interviews. The data was
arranged into three overall groups according to research framework: man-
agers’ challenges, HBE in Serbia, and the role of HBE in overcoming of man-
agers’ challenges. The answers of the first group were categorised based
on the type of the challenge (e.g. marketing and sales-related challenge,
human resource management-related challenge, or growth challenge). In all
three groups, the data was compared with theory in an iterative process.
Based on these comparisons, the final conclusions were made. Reliability
is ensured with a protocol of data collection and analysis procedure and
the grounding of interpretation in examples from the interview data (Stiles,
1993). Different verification strategies were used to check validity based on
the proposals of Morse, Barrett, Mayan, Olson, and Spiers (2000), namely
making sure that the sample includes interviewees who have expert knowl-
edge in the topic, collecting and analysing interview data iteratively, and
reconfirming findings with new data.
Results
The results of our empirical research are presented in three sections. First,
we summarise the opinions of SME managers regarding key challenges of
conducting business and managing organizations in Serbia, and their main
Volume 3, Issue 1, 2014
30 Maja Kočevar and Dietmar Sternad
Table 1 The Profile of the Interviewees
Gender Age group Industry
Male 6 21–30 2 Engineering 3
Female 3 31–40 4 Consulting 2
41–50 2 Tourism 1
60+ 1 Marketing 2
Publishing 1
Firm size Management experience International experience
Micro 3 1–3 years 4 Europe 4
Small 4 4–6 years 3 Overseas 3
Medium 2 7–9 years 1 No experience 2
10+ years 1
strategies to overcome these challenges. Second, we provide an insight
into SME managers’ perception of HBE in Serbia. Finally, we focus on the
SME managers’ perception of the role of HBE in overcoming their main
challenges. We also include quotes from the interviewees to illustrate the
main findings.
Challenges for Serbian SME Managers
Respondents highlighted eight areas of challenges that they face in their
role as SME managers: (1) human resources, (2) bureaucracy, government,
and legal regulations, (3) payment delays and financing, (4) marketing and
sales, (5) business and personal networks, (6) growth of the company, (7)
organisation of work, and (8) corruption.
The most frequently mentioned challenges within the area of human re-
sources were the lack of motivation and responsibility of employees, man-
ager’s self-motivation, loyalty, lack of eagerness to learn, conflicts between
the ‘rigid’ older generation and ‘irresponsible’ young generation, employee
attraction and selection process, organisation of people, and teamwork.
The following quotations illustrate some of these challenges:
You need motivated people, you need very good communication, you
need sophisticated management practices and it is very important to
have all these things on the table at the same time. [Manager D]
Challenges we were faced with were always a lack of any kind of
[break] – well let’s say – organisation, yes, self-organisation, self-
motivation. Too many people are money- and not result-driven. [Man-
ager G]
We are a small team and if one of us makes a mistake everyone is
going to feel it. But the problem is that most employees don’t under-
stand that. [Manager C]
International Journal of Management, Knowledge and Learning
The Role of Serbian Higher Business Education 31
SME managers stated that they cope with some of these challenges
through asserting their authority, using bonus systems, and organising so-
cial events for employees. Managers also referred to the use of mentoring
or training approaches. For the employee recruitment and selection pro-
cess, personal networks are often used in combination with creative inter-
view techniques.
These people are working for a pay-cheque, plus they have bonuses
for every effort they make. I think this is the best model for any type
of motivation. [Manager F]
To be honest, when it comes to older people, I am managing them
through my authority. That’s the only way. They do it because I said it
and nothing else. [Manager E]
We really like to hire people that are relatives or are children of good
workers. So many people are family-connected. [Manager A]
I ask them how many books they read in the last [. . .] year, which daily
paper they read, which weekly paper, which magazine, what are they
watching on TV. In let’s say five minutes I get a very good picture on
what level they are. [Manager I]
The second category of challenges relates to the areas of bureaucracy,
government, and legal regulations. The SME managers generally perceived
administrative processes in Serbia as very slow, time consuming, rigid, and
inefficient. They did not believe that much can be done about it, and have
become accustomed to it. Managers also pointed out poor communication
between business and politics, particularly when the latter is imposing new
policies, no real strategy for business, and a high dependence on personal
networks and connections. According to their statements, the legal system
in Serbia is strongly focused on protecting big corporations, with SMEs be-
ing left behind. Consistent with their view of politics, SME managers see
lobbying as a crucial activity for small companies to survive in Serbia.
We actually have a lot of issues with bureaucracy, also with all other
similar things, but we are accepting this environment as something
that can’t be changed. [Manager D]
I think the problem is that we don’t have strong enough institutions
here in Serbia. [Manager B]
If you have some background and get some scores from a political
party, then you can continue with your project and if you don’t, you
can’t. [Manager D]
Volume 3, Issue 1, 2014
32 Maja Kočevar and Dietmar Sternad
A further important challenge for Serbian SME managers is managing
liquidity. This is particularly due to client payment delays, especially in case
of higher amounts. Therefore, they see good long-term relationships with
both suppliers and customers as key for survival in business. As the banks
demand an excellent historical record, stable accounts, high interest rates,
and guarantees in the form of taking mortgages against private property,
external credit financing is often not an option for smaller firms.
The liquidity is the main problem. Financing not so much but liquidity
is, especially during big business operations. [Manager C]
I am not sure that a lot of people would just have this – let’s say –
strength to get into all this. It is very uncertain. You really do not know
if you will be able to pay this loan. [Manager B]
A fourth category of challenges relates to the area of marketing and
sales, and includes finding ways to increase the number of customers, fol-
lowing new trends in marketing, such as direct marketing, as well as dealing
with a shrinking and financially limited domestic market and an increasing
number of competitors.
How to explain to the people that they can benefit from this type of
marketing, you know, the differences between direct marketing and
other kind of marketing development in the past. [Manager F]
The market is small and the competitors are too large in numbers
[. . .] small companies, not really a threat, but when you have 10,000
of those small ones, well, that becomes a problem. [Manager C]
The main strategies to overcome the marketing- and sales-related chal-
lenges are long-term relationship building, tactical planning, innovative and
unique ideas, observation of new trends, combination of modern media and
good management of contact lists, and finally – very important in Serbia –
strong reliance on the word of mouth.
I established a good web site with social and business network ac-
tivities, [. . .] we organise our contact list, call and directly sell our
services, [. . .] our marketing strategy for the first two years is the
word of mouth system. [Manager H]
We prepare some programs for them [customers] – usually two days
– and we do it somewhere in the mountains. And that is something
that only we are doing in Serbia. [Manager I]
Building strong business and personal networks is seen as crucial for
a long-term market presence. This includes searching for partners, main-
taining good relationship with current business partners and clients, and
International Journal of Management, Knowledge and Learning
The Role of Serbian Higher Business Education 33
participating in business associations. Personal networks are also seen as
important for attracting new employees, although less so in the final hiring
decision.
If you have connections in a certain company you will be able to get
a job or you will be able to get a client and if not, you are in a big
trouble. It’s really hard to prove yourself by just being a good quality
person with great knowledge. [Manager B]
Every recommendation from a family, friends [. . .] is OK, but at the
end of the story I cannot employ somebody that has no experiences
in my type of business. [Manager F]
Growth of the company was mentioned only by a few SME managers as
the key challenge. The need to prepare short- and long-term plans, future in-
come and cost estimations, and presentations for business partners were,
however, pointed out by the respondents. SME managers also used external
help, turnaround management programs, different organisational practices,
and intuition to choose the right time and way of change.
We had an excellent consultant from England [. . .] He was here as one
of our employees and he knew very well all the processes and all the
managers in the company. [Manager E]
You have to have some project manager, some facilitator or any kind
of person who has to be out of day to day work or operations and
just concentrated on management [. . .] So we have two educated and
dedicated people just for operational management‘ [Manager D]
The seventh category of challenges relates to the organisation of work.
Constant time pressure, delivering the best results in a short time frame,
the complexity of work, and attending to all important small details were of
managerial concern in this field.
The managers did not see corruption as the main challenge, although
they did agree that it is a common characteristic in the Serbian business
environment. They also recognised a grey area between lobbying, which they
consider as crucial in business, and illegal corruption. Respondents stated
that ‘direct corruption’ rarely happens; more frequently, SMEs are offered
businesses in exchange for part of the profit. The managers also acknowl-
edged that taking suspicious offers can make a company dependent, while
rejecting them often means losing important market opportunities.
‘I will get you this job, but you will have to give me a part of your profit.’
And this is how it works here. It’s very open. [Manager B]
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34 Maja Kočevar and Dietmar Sternad
Once we would start with this, then it’s very hard to be independent.
[. . .] Of course it is hard to know that we lost good business. We had
so many cases that we lost some part of the market [Manager I]
SME Managers’ Perception of Higher Business Education in Serbia
The interviewed SME managers voiced criticism of the teaching methods,
curricula, and the quality of the teaching faculty of higher education institu-
tions. During their formal business education, they were provided with a lot
of theory and only limited practical experiences, although three alumni from
a private university reported the use of practice-oriented case studies as
a teaching method. The curriculum was mainly theory-based and the man-
agers generally missed applicable knowledge (e.g. about business start-up,
the complex structure of an organisation, project management, ‘soft’ man-
agerial and communication skills, teamwork, and team decision-making).
Programs were considered as old-fashioned. During their time at university,
the managers also did not notice much cooperation between higher educa-
tion and local businesses.
A bunch of old-fashioned methods, tools and techniques that are out-
dated and completely unrecognised on the market. [Manager G]
We didn’t get any experience during college, I didn’t have any expe-
rience that would be provided from my college such as internship or
something like that. [Manager F]
There are no subjects that would teach young managers how to be-
have, how to talk to people, how to treat their valuable assets – it’s
human assets, of course. [Manager B]
The best and famous event is the Case Study Show where students
solve real company problems every year [. . .] It’s a real company, a
real problem. [Manager H]
Managers also complained about the standards in the teaching profes-
sion. A common line of criticism referred to professors that often have a
solid academic background, but no professional experiences, as well as to
the faculty members without sufficient knowledge about the requirements
of today’s business world and market trends. Three interviewees, however,
also expressed satisfaction with some of their former professors, especially
those who gave some practical examples or organised guest lecturers.
They don’t know really anything about how to make money. They just
know things theoretically and they are telling big stories about this
and that, but they don’t really know how to turn around 100 Euros.
[Manager I]
International Journal of Management, Knowledge and Learning
The Role of Serbian Higher Business Education 35
We had both types of them [professors]. And we always liked those
who had some experience and also academic knowledge. [Manager
E]
Other perceived weaknesses of HBE that were mentioned in the inter-
views were the lack of business experiences of the students, as well as the
lack of cooperation between companies and universities.
Education following some experience in the managerial area can be
much more useful and is better accepted than education without pre-
vious experiences. [Manager D]
There is no absolutely modern practice or any kind or internship model
in most of the universities, both private and state. [. . .] basically we
were depending on ourselves where to go after [studying]. [Manager
G]
The Role of HBE in Overcoming the Challenges of Serbian SME Managers
The interviewed SME managers pointed out some positive outcomes of
the formal business education, such as the opportunity to access different
data, libraries, and web pages, and to learn individually from these sources.
Furthermore, they recognised the opportunity to build a strong network of
professionals from different programs. Nevertheless, they tend to see for-
mal education only as a first step that provided them with a basic overview
of the market system, but did not help them to understand private business
practices and to survive as entrepreneurs. Most managers stated that they
also needed additional learning, seminars, and experiences.
I met all these people [experts in different areas] during my studies at
the university. I mean in different faculties, but in university you can
always find the right people to cooperate with. [Manager G]
It made me aware of where to look and how to look and to under-
stand things, but logical conclusion making – no [I could not find it].
[Manager F]
To compensate for what they did not get during their formal business edu-
cation, managers turned to external education providers, education abroad,
seminars and trainings, business networks and business partners, family
and friends, self-teaching, and relied on practical experience.
I talked with people from different types of business or with the peo-
ple with whom I can exchange my ideas and [. . .] who have some
experiences in solving similar problems. [Manager F]
My mother is still in the office so she helps a lot. She has been
working here so long. [Manager C]
Volume 3, Issue 1, 2014
36 Maja Kočevar and Dietmar Sternad
And every decision I am now making on those things [experiences]
that I have learned in the last 20 years. It’s not the university, I just
forgot about the university as soon as I started working. [Manager I]
Finally, based on what the managers were missing in their own HBE,
and on the knowledge and skills they had to acquire additionally, SME
managers gave some recommendations for further development of busi-
ness education. The main proposed improvements were related to changing
the curriculum and adding additional courses, modernizing teaching meth-
ods, increasing cooperation with the business sector, introducing internship
systems, increasing admission requirements in terms of students’ experi-
ences, employing more experienced teaching professionals, and introducing
psychological evaluations of students at the end of each semester:
It must be not only delivering the knowledge but asking from students
to point out the problems and at the same time give you the solutions.
[Manager E]
Discussion
The results of the empirical research among Serbian SME managers con-
firmed many of the findings from the extant literature. No gender-specific dif-
ferences were noticed in the perception of managerial challenges, which is
in line with DeMartino and Barbato (2003). The most frequently mentioned
challenges referred to the areas of human resource management, market-
ing and sales, and general management, which is in line with prior research
results, such as, Huang and Brown (1999). As suggested by Dodge and Rob-
bins (1992), the research confirmed that SME managers face challenges
such as market assessment, customer contact, competition assessment,
and a lack of financial resources for marketing. To overcome these chal-
lenges, managers build strong physical and virtual networks among SMEs
(McGrath & O’Toole, 2011) and attempt to create and maintain long-term
relationships with their customers (Percy et al., 2010). Moreover, managers
confirmed that time pressure, decision-making, dynamic and unstable busi-
ness environment, organisational growth, and choosing the right time for
reorganisation were also relevant challenges, which is consistent with the
findings of Huang and Brown (1999), Miller and Toulouse (1986), and Ray,
Baker and Plowman (2011).
In view of the specifics of the Serbian business environment, the re-
spondents confirmed that the observations of Kovalainen (2006), Ognjanov
(2006) and the OECD (2011) concerning inadequate implementation of
laws, unfair competition, irrational implementation of rules, high level of
bureaucracy, and slow, rigid administration, also play an important role in
the operation of SMEs. In Serbia, personal and business networks are also
International Journal of Management, Knowledge and Learning
The Role of Serbian Higher Business Education 37
highly important in the business sector, especially for obtaining financial re-
sources, attracting employees, and to close business deals (as proposed by
Ognjanov, 2006; Radonjic, 2010). Further country-specific challenges that
were confirmed by our empirical study were general difficulties in obtain-
ing government grant assistance, credits and loans, as well as strict bank
policies (Huang & Brown, 1999; Visinescu & Micuda, 2009). One of the ma-
jor challenges mentioned by the participants that have not been previously
covered by the reviewed literature was the issue of payment delays, par-
ticularly from large corporations, governmental and public institutions. For
many of the most frequently cited challenges, interpersonal competences
are needed (for motivating employees and establishing customer relation-
ships, as well as lobbying, overcoming administrative hurdles or ensuring
faster payment due to better relationships). Although crucial for SME man-
agers, developing these ‘soft’ competences is usually not the main focus
of HBE programs.
The main aim of HBE lies in providing the students with all the skills and
competences relevant for their future managerial career (Jurše, 2009). As
mentioned already in the literature review, critics doubt that HBE is able to
reach this aim (Atwater et al., 2008; Livingston, 1971). The main lines of
criticism in the extant literature, particularly the extensive focus on theory
and the lack of attention to practical work and experiences, were also em-
phasized by the Serbian SME managers. Similar to Atwater et al. (2008),
the managers also claimed that there is not enough knowledge about the
integration of different organisational levels and organisational functions in
different environments. In line with Bennis and O’Toole (2005), SME man-
agers perceived the lack of professional experiences of teaching profession-
als as a problem, making the transfer of theory into practice more difficult
(Pfeffer & Fong, 2002). Managers also complained about ‘old-fashioned’
teaching methods, consequently urging for a combination of managerial
practice and modern pedagogical tools to be used in classes. Furthermore,
SME managers agree with Damnjanovic (2010) that cooperation between
business and education sectors is not sufficient and should be better imple-
mented in the teaching plans. In general, our research confirms Livingston’s
(1971) proposition that students are lacking practical experiences, which
in turn lowers the (perceived) quality of HBE. The SME managers also
pointed out that theory and classes would be more effective if the students
already understood the managerial profession from their own practical
experience.
Based on their experiences acquired through both, formal business ed-
ucation and managerial practice, the managers proposed some future im-
provements for HBE. The main suggestions included the modernization of
teaching methods and better connection of the business sector with the
Volume 3, Issue 1, 2014
38 Maja Kočevar and Dietmar Sternad
HBE; adding additional courses to the curricula, particularly the courses re-
lated to managerial soft skills and the nature of managerial work; raising the
requirements regarding student admission requirements and faculty mem-
ber expertize, especially in terms of previous business experiences. These
suggestions support Stukalina’s (2008) advocacy for a multidisciplinary and
interactive approach to study, Livingston’s (1971) and Preffer and Fong’s
(2002) call for obligatory internships for every business education program,
and Engstrom’s (1967) and Mintzberg and Gosling’s (2002) suggestions to
put more emphasis on courses such as managerial soft skills, communica-
tion, law, and psychology in business education programs.
This paper presents the first exploratory study of the challenges that
Serbian SME managers are facing and whether they perceive HBE as sup-
portive in overcoming these challenges. One of the main limitations of this
research, however, is that it is based on the analysis of only nine interviews.
Together with the fact that due to a low response rate to the interview re-
quests, the respondents graduated from only two universities, one private
and one public, the results cannot be generalised. The selected method
of sampling might be one of the main reasons for the low response rate,
since the search for candidates and interviews was made via the Internet
or telephone and not in person. A lack of personal contact with potential
interviewees can be connected with lower trust and can result in a low re-
sponse rate. Although qualitative research does not generally require a large
sample, a more diverse interviewee base would be desirable. Further quan-
titative research could focus on the differences between the perceptions
of alumni from private universities as opposed to the alumni from public
universities, and could also reveal whether factors such industry affiliation,
company size, tenure, or international experience also influence the SME
managers’ views regarding the practical value of HBE.
Conclusion
The results of our research reveal that Serbian SME managers are not fully
satisfied with the HBE that they received in Serbia and its capacity to sup-
port them in dealing with their daily challenges. Primarily theory-based cur-
ricula received most criticism, closely followed by old-fashioned teaching
methods, and the lack of practice-oriented teaching. Based on the findings
of this study, the following measures could be taken by higher education
institutions in Serbia to improve the practical relevance of their programs:
(a) including more (full-time or part-time) faculty members with practical
business experience, (b) discussing real-world challenges in the classroom
(e.g. based on case studies of Serbian companies), (c) stronger focus on
developing managerial ‘soft’ competences (e.g. communication, building
relationships, networking, and team dynamics), and (d) intensifying cooper-
International Journal of Management, Knowledge and Learning
The Role of Serbian Higher Business Education 39
ation with companies (e.g. in the form of obligatory internships or student
projects for SMEs).
Relevance for practice begins with finding out what practitioners need.
This study provides the first step to a better understanding of the specific
requirements of SME managers as an important target group for HBE in
Serbia.
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Maja Kočevar, MA is a graduate of the International Business Management
program at the School of Management, Carinthia University of Applied Sci-
ences (Villach/Austria). She is currently employed as an export manager
at AQUAFLEX Wastewater Treatment and Pipeline Systems in Turkey. She is
also working as an external export consultant for companies in Slovenia and
Turkey. kocevar.maja@gmail.com
Dietmar Sternad is a Professor of International Management and Program
Director of the Master of Arts program in International Business Management
at Carinthia University of Applied Sciences in Villach, Austria. In his prior
managerial career, he was a managing director of several media companies
in Austria and Slovenia. Dietmar Sternad has also taught at universities in
Poland, Belgium, and France. He is the co-author/editor of the following books
Strategic Adaptation (Springer, 2011), Handbook of Doing Business in South
East Europe (Palgrave Macmillan, 2011) and Cross-Border Cooperation (Franz
Steiner Verlag, 2012). d.sternad@cuas.at
This paper is published under the terms of the Attribution-
NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)
License (http://creativecommons.org/licenses/by-nc-nd/4.0/).
International Journal of Management, Knowledge and Learning