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Inventory management, managerial competence and financial performance of small businesses

Author

Listed:
  • Laura A. Orobia
  • Joweria Nakibuuka
  • Juma Bananuka
  • Richard Akisimire

Abstract

Purpose - The purpose of this study is twofold (1) to establish the relationship between inventory management, managerial competence and financial performance and (2) to test whether inventory management mediates the relationship between managerial competence and financial performance. Design/methodology/approach - We employed cross-sectional and correlational research designs. A questionnaire survey of 304 small businesses in Uganda was utilized. Hypotheses were tested using a bootstrap analysis technique with the aid of Analysis of Moments Structures (AMOS) software. Findings - Results indicate that inventory management and managerial competence are significantly associated with financial performance of small businesses. Further, inventory management partially mediates the relationship between managerial competence and financial performance. Originality/value - Rather than focusing on only the direct effects of managerial competence and inventory management, moreover independently, the indirect effect of inventory management is tested. Further, the behavioral perspective of inventory management, as opposed to financial ratios, is utilized.

Suggested Citation

  • Laura A. Orobia & Joweria Nakibuuka & Juma Bananuka & Richard Akisimire, 2020. "Inventory management, managerial competence and financial performance of small businesses," Journal of Accounting in Emerging Economies, Emerald Group Publishing Limited, vol. 10(3), pages 379-398, May.
    • Handle: RePEc:eme:jaeepp:jaee-07-2019-0147
    DOI: 10.1108/JAEE-07-2019-0147
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    Cited by:

    1. Daniela Favaretto & Alessandro Marin & Marco Tolotti, 2023. "A theoretical validation of the DDMRP reorder policy," Computational Management Science, Springer, vol. 20(1), pages 1-28, December.

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