Organizational Effectiveness in Emerging Markets: Insights from Macedonian SMEs

Abstract

Although organizational effectiveness has been extensively studied in~developed countries, there is a lack of empirical data from emerging economies -- particularly among small and medium-sized enterprises (SMEs). Previous research has often focused on individual determinants (such stress or turnover) without integrating objective financial indicators with subjective HR-related concerns. This study addresses that gap by examining key determinants of organizational effectiveness in Macedonian SMEs, including absenteeism, stress, job satisfaction, turnover, and financial performance metrics such as return on equity (ROE) and return on assets (ROA). The study is grounded in social exchange theory (Organ 1977) and organizational effectiveness frameworks (Quinn and Rohrbaugh 1983; Zammuto 1984), which illustrate how objective financial indicators and subjective HR-related factors interact to influence SME effectiveness in emerging markets. The findings are based on survey data collected from 408 respondents across 30 Macedonian SMEs. A survey methodology was chosen for its ability to systematically gather employee perceptions and experiences from a representative sample of SMEs. The constructs were operationalized using established measures (e.g. COPSOQ II, ASQ, MOAQ-JSS), allowing for reliable assessment of psychosocial and organizational variables. The findings indicate that, compared to employees, leaders report significantly higher levels of both stress and job satisfaction. Although there are no gender differences in job satisfaction or intentions to leave, women report higher levels of workplace stress than men. Age-based evaluations show that employees aged 55 and older have higher absenteeism rates than those in the mid-career group, while younger employees report significantly higher intentions to leave. The lack of SME reporting has led to inconsistent financial metrics, highlighting the need for standardized transparency procedures in emerging economies. The study underscores the need for targeted HR strategies to enhance job satisfaction, reduce turnover, and foster a positive work environment. To provide a~more comprehensive view of organizational success in emerging markets, future research should place greater emphasis on incorporating financial performance metrics.