THE EFFECTS OF FINANCIAL PERSPECTIVE AS A DETERMINANT PERFORMANCE IN SMALL AND MEDIUM ENTERPRISE. A CASE OF ELGEYO MARAKWET COUNTY, KENYA
DOI:
https://doi.org/10.47941/ajss.802Abstract
Purpose: This study effect of financial perspective as a determinant of Performance in Small and Medium Enterprises. The objectives of the study are; to determine the effects of financial perspective on performance, to evaluate the effects of customer perspective on performance and to assess the contribution of the internal business perspective on performance. The study was informed by Balance Score Card theory and a survey research design was used.
Methodology: A population of two thousand small and medium enterprise business persons in Elgeyo Marakwet County was assessed. A sample size of 95 from the target population was used. The study employed a stratified sampling technique for the sub-county and then simple random sampling. Data was analyzed by multiple regressions.
Results: The study found out that the County Government did not support to SMEs in giving loans and these retarded their sales growth in my SME continuously. This was therefore an implication that there was no revenue growth, no increased market share in my SME and little increased return on investment in my SME. Correlation results revealed a significant and positive relationship. However much that financial perspective was a problem , the SMEs in Elgeyo Marakwet County had tied to increased product quality ,customers were satisfied on how staff respond to their grievances in my SME .Finding from objective three found to be less significant to the performance SMEs, as the county working environment was not aware of their conducive for SME, it was found out that Electronic commerce system were not used by SME in the County and neither did achieve any social economic goals and that SME did not increased process capacity. It was found out that HO1: on relationship between financial perspective and performance. The results rejected the null hypothesis. (β = 0.017, p < 0.847). HO2: on relationship between customer perspective and performance and the hypothesis was therefore not supported, therefore the hypothesis result was rejected (β = 0.299, p< 0.009). HO3: There is no significant relationship between internal business perspective and performance. The results accepted the null hypothesis. (β = -0.076, p< 0.500).
Unique Contribution to Theory, Policy and Practice: The study made the following recommendations: - There need for the county government and microfinance institutions to support SMEs financial, that is by offering them cheap, affordable and low interest loan to the resident. There is need for increased product quality in my SME, maintain customer loyalty, increased customer satisfaction pertaining to staff-: customer relationship in my SME and on time deliveries to customers are valued by my enterprise. On internal business perspective on performance in Small and Medium Enterprises. County government should improve good working environment which conducive for SME, there is need for adoption. The study suggests that other study be done to analyze, future research could verify the dimensions developed in this study and to enhance the generalizability of the research findings, future inquiries could employee more diversified samples across genders and diverse international customer environments.
Downloads
References
Aldehayyat and Twaissi, (2011). A performance measurement framework for a small and medium enterprise. Canada, University of Alberta (Canada).
Baker et al, A. and A. Taghavi (2007). "The impacts of acquiring ISO 9000 certification on the performance of SMEs in Tehran." The TQM Magazine 19(2): 140-149.
Beamish, Akinyele and Fasogbon, (2007) "Measuring supply chain performance." International Journal of Operations & Production Management 19(3).
Cooper & Schindler. (2006). Research Design: Qualitative and Castrogiovanni, G. J. (1996). Prestartup planning and the survival of new small businesses: Theoretical linkages. Journal of Management, 22(6), pp. 801-822
Cummins et al., (2000"Understanding innovation in small and medium-sized enterprises: a process manifest." Technovation 25(10): 1119-27.
Gilley et al., 2000; Thornton et al., (2003). "Use and impact of performance measurement results in R&D and NPD: an exploratory study." R & D Management 34(2): 191.
Hammann et al. (2009) "Performance measurement: implementing strategy", Management Accounting, Vol.72 No.12, pp. 49-53 for strategy formulation." California Management Review Spring: 114-135.
Kaplan, R. S. and D. P. Norton (2001). The strategy-focused organization: how balanced scorecard companies thrive in the new business environment, Boston, Mass.: Harvard Business School Press, c2001.
Moullin, M. (2003). "Defining Performance Measurement." Perspectives on Performance 2(2):
Neely, A. (1998). "Three models of measurement: theory and practice." International Journal of Business Performance Management 1(1): 47-64.
Norman and Thomas (2003) "˜Does Firm Size Confound the Relationship between Social Performance and Firm Financial Performance?', Journal of Business Ethics 33(2), 167- 180.
Poister, T. H. (2010). The future of strategic planning in the public sector: Linking strategic management and performance. Public Administration Review, December 2010, Special issue.
Srinivasan, R., Woo, C. & Cooper, A. (1994). "˜Performance determinants for male and female entrepreneurs. Frontiers of Entrepreneurship Research', Proceedings of Babson College Entrepreneurship Research Conference, 43-56.
Tapinos and Jack (2005). Implementing global performance measurement systems
Sturdivant and Ginter (1977) Implementing global performance measurement system a cookbook approach. San Francisco, Jossey-Bass/Pfeiffer.
Tapinos and Jack (2005). Implementing global performance measurement systems.
Teece, David J. (2007). "Explicating Dynamic Capabilities: The Nature and Micro-foundations of (Sustainable) Enterprise Performance," Strategic Management Journal, 28(13): 13191350.
Trninic, A.H.C., Jardine, A.K.S and Kolodny, H. (1999), "Measuring maintenance performance:
a holistic approach", International Journal of Operations & Production Management, Vol. 19 No. 7, pp. 691-2
Wagner, M., N. Van Phu, T. Azomahou and W. Wherever: 2002, "˜the Relationship between the Environmental and Economic Performance of Firms: An Empirical Analysis of the European Paper Industry', Corporate Social Responsibility and Environmental
Wang, C. K. and B. L. Ang (2004). "Determinants of Venture Performance in Singapore*." Journal of Small Business Management 42(4): 347.
Wang, S. D. (2003). The implication of e-financing implication for SMEs. Bulletin on AsiaPacific Perspective, 2003-2004, United Nations.
Williams, S. (1975). Drive Your Business Forward with the Balanced Scorecard, Management Services, (45)6,
Yasin et al. (2004)"A literature review and integrative performance measurement framework for multinational companies." Marketing Intelligence & Planning
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Albert kiptanui Cheruiyot
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
