Change Management in SMEs: Strategies for Overcoming Resource Constraints and Building Capacity

Abstract

The SMEs constitute more than 90% of enterprises worldwide and play a key role in economic growth, employment and innovation. However, the capacity to manage organizational change is often limited by limited resources, including lack of capital, employee competences and technological infrastructure. This study examines change management practices in SMEs, paying particular attention to identifying cost-effective strategies to overcome these constraints and develop sustainable organizational capabilities. Using a mixed-methods approach combining descriptive statistics and qualitative analysis, the study examines the challenges faced by SMEs, assesses adaptive strategies and measures the specific impact of change initiatives on growth, innovation and competitiveness. Data were collected from 200 small and medium-sized enterprises from different industries in Kosovo, Spain and the United Kingdom to ensure a representative sample in the context of the regional economic context. Quantitative surveys assessed variables such as resource allocation, strategy implementation effectiveness and post-change performance indicators, while semi-structured interviews with SME managers identified barriers and success factors. Statistical analysis was performed using SPSS (version 28) to generate descriptive statistics (means, standard deviations, frequencies) and regression models to determine correlations with variables such as leadership, employee engagement, and innovation performance. MATLAB (R2023a) complemented this analysis with a predictive model that can forecast long-term growth trajectories based on indicators of strategic adaptation. The main findings show that 68% of SMEs cite limited financing as the biggest challenge, followed by employee resistance (54%) and poor communication (49%): the Regression analysis demonstrated a strong positive correlation between effective communication strategies and employee engagement (R² = 0.62, *p* < 0.01), underscoring the importance of transparent dialogue during transitions. Cost-effective strategies such as agile methodologies—implemented incrementally to minimize disruption—were reported by 72% of SMEs as critical to success. Additionally, AI-driven tools, including sentiment analysis chatbots, reduced employee resistance by 35% through personalized interventions. MATLAB predictive models further highlighted that SMEs adopting structured change frameworks experienced a 22% increase in revenue growth and an 18% rise in innovation rates over two years (*p* < 0.05). The study emphasizes the pivotal role of leadership in fostering a "change-agile" culture, with 45% of SMEs attributing improved readiness to targeted leadership training programs, A case study of companies adopting Industry 4.0 in the Spanish province of Gipuzkoa demonstrates how hybrid work models and digital tools can reduce operating costs while increasing productivity. However, the study acknowledges the limitations of its regional scope and recommends that future research include SMEs in emerging economies. In conclusion, this study provides useful insights for SMEs to manage change in resource-constrained environments. By focusing on agile frameworks, leveraging predictive analytics, and fostering an employee-centric approach, SMEs can increase their resilience, drive innovation, and ensure their long-term competitiveness in a dynamic market.