Publication Details
Abstract
Labor productivity remains one of the most reliable indicators of a firm’s competitiveness, yet small business enterprises consistently realize only a fraction of their productive potential. This article examines the strategic mechanisms through which small firms can reveal hidden reserves of labor productivity and convert them into measurable performance gains. Drawing on a systematic review of productivity research, a comparative analysis of management practice, and secondary statistical data, the study distinguishes between diagnostic mechanisms that make reserves visible — working-time analysis, factor decomposition, benchmarking, and key performance indicators — and mobilization mechanisms that activate them, including targeted incentive design, lean and continuous-improvement methods, investment in skills and multi-functionality, selective digitalization, and the reorganization of work. The analysis shows that, unlike in large enterprises, the reserves of small firms lie less in capital-intensive technological change and more in organization, motivation, and the quality of managerial attention. The article proposes an integrated strategic cycle in which revealing and mobilizing reserves are treated as a single, continuous management process rather than as isolated campaigns. The findings are intended to support owner-managers, advisory institutions, and policymakers seeking to raise productivity in the small-business sector, particularly in emerging economies where this sector carries a growing share of employment.