IDEAS home Printed from https://ideas.repec.org/a/rbs/ijbrss/v13y2024i5p547-557.html

A comparison of the usage between financial and non-financial performance metrics in Small and Medium Enterprises (SMEs) in South Africa

Author

Listed:
  • Tinaye Mahohoma

    (Durban University of Technology)

Abstract

The purpose of this study is to explore the performance measurement approach of small and medium enterprises (SMEs) in the South Durban region of South Africa. It has long been known that small and medium enterprises (SMEs) play an important role in economic growth and income distribution in the world's major economies. However, due to globalisation, the fourth industrial revolution and increased competition from multinationals, South African SMEs face new challenges in measuring their performance. To respond to these challenges, SMEs must adopt efficient and effective performance measurement models. However, currently, according to the researchers, there is no such performance measurement framework. This study aims, among others, to close this gap in the literature. This study uses a deductive, positivist research design to comprehensively explore performance measurement practices in small and medium enterprises (SMEs) in a given region. Based on Morgan's sample size table, size 217 was chosen. The use of financial and non-financial performance measures is preferred by SMEs as it shows better performance compared to only one measure. In addition, the study found a positive correlation between business size and age, indicating that larger businesses tend to be older.The results of this study help to understand the complex relationship between job dimensions, age, and performance, highlighting the importance of choosing appropriate performance measures. Future research is recommended to gain a deeper understanding of these relationships and how they vary across contexts and sectors. Key Words:Performance measurement, Financial metrics, Non-financial metrics, SMEs, business age, business size

Suggested Citation

  • Tinaye Mahohoma, 2024. "A comparison of the usage between financial and non-financial performance metrics in Small and Medium Enterprises (SMEs) in South Africa," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 13(5), pages 547-557, July.
    • Handle: RePEc:rbs:ijbrss:v:13:y:2024:i:5:p:547-557
    DOI: 10.20525/ijrbs.v13i5.3540
    as

    Download full text from publisher

    File URL: https://www.ssbfnet.com/ojs/index.php/ijrbs/article/view/3540/2408
    Download Restriction: no
    File URL: https://doi.org/10.20525/ijrbs.v13i5.3540
    Download Restriction: no
    File URL: https://libkey.io/10.20525/ijrbs.v13i5.3540?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Love, James H. & Roper, Stephen & Zhou, Ying, 2016. "Experience, age and exporting performance in UK SMEs," International Business Review, Elsevier, vol. 25(4), pages 806-819.
    2. Wiklund, Johan & Shepherd, Dean, 2005. "Entrepreneurial orientation and small business performance: a configurational approach," Journal of Business Venturing, Elsevier, vol. 20(1), pages 71-91, January.
    3. Frederic Delmar & Per Davidsson, 2000. "Where do they come from? Prevalence and characteristics of nascent entrepreneurs," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 12(1), pages 1-23, January.
    4. Cooper, Arnold C. & Woo, Carolyn Y. & Dunkelberg, William C., 1989. "Entrepreneurship and the initial size of firms," Journal of Business Venturing, Elsevier, vol. 4(5), pages 317-332, September.
    5. Edmund Mallinguh & Christopher Wasike & Zeman Zoltan, 2020. "The Business Sector, Firm Age, and Performance: The Mediating Role of Foreign Ownership and Financial Leverage," IJFS, MDPI, vol. 8(4), pages 1-16, December.
    6. Sigal Haber & Arie Reichel, 2005. "Identifying Performance Measures of Small Ventures—The Case of the Tourism Industry," Journal of Small Business Management, Taylor & Francis Journals, vol. 43(3), pages 257-286, July.
    7. Igan, Deniz & Mirzaei, Ali & Moore, Tomoe, 2023. "A shot in the arm: Economic support packages and firm performance during COVID-19," Journal of Corporate Finance, Elsevier, vol. 78(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rewan Kumar Dahal & Dipendra Karki & Rajesh Gurung & Binod Ghimire & Surendra Prasad Joshi, 2025. "Direction of Business Performance Metrics: A Thematic Review," SAGE Open, , vol. 15(4), pages 21582440251, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kholekile L. Gwebu & Jeffrey Sohl & Jing Wang, 2019. "Differential performance of science park firms: an integrative model," Small Business Economics, Springer, vol. 52(1), pages 193-211, January.
    2. Ngoc Thang Doan & Ngoc Mai Tran & Van Ha Doan & Huong Giang Mai, 2026. "The Liability of Informality and De-internationalisation During the COVID-19: International Evidence," Foreign Trade Review, , vol. 61(1), pages 7-30, February.
    3. Diamanto Politis, 2005. "The Process of Entrepreneurial Learning: A Conceptual Framework," Entrepreneurship Theory and Practice, , vol. 29(4), pages 399-424, July.
    4. S. Arunachalam & Sridhar N. Ramaswami & Pol Herrmann & Doug Walker, 2018. "Innovation pathway to profitability: the role of entrepreneurial orientation and marketing capabilities," Journal of the Academy of Marketing Science, Springer, vol. 46(4), pages 744-766, July.
    5. Clara Cardone-Riportella & María José Casasola-Martinez & Isabel Feito-Ruiz, 2014. "Do Entrepreneurs Come From Venus Or Mars? Impact Of Postgraduate Studies: Gender And Family Business Background," Working Papers 14.04, Universidad Pablo de Olavide, Department of Financial Economics and Accounting (former Department of Business Administration), revised Sep 2014.
    6. Lu, Jinfeng & Dimov, Dimo, 2023. "A system dynamics modelling of entrepreneurship and growth within firms," Journal of Business Venturing, Elsevier, vol. 38(3).
    7. Kranzusch, Peter & Kay, Rosemarie, 2011. "Das Gründerpanel des IfM Bonn: Konzeption und Nutzungsmöglichkeiten," IfM-Materialien 208, Institut für Mittelstandsforschung (IfM) Bonn.
    8. Abiodun Tope Samson, 2015. "The Impact of Entrepreneurial Orientation, Reconfiguring Capability and Moderation of Environmental Turbulence on Export Performance of SMEs in Nigeria," Journal of Economics and Behavioral Studies, AMH International, vol. 7(3), pages 76-87.
    9. Nicholas Apergis & Irene Fafaliou, 2014. "The determinants of business start-ups in tertiary education: evidence for Greece through a panel data approach," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 38(2), pages 287-301, April.
    10. Piñeiro-Chousa, Juan & López-Cabarcos, M. Ángeles & Romero-Castro, Noelia María & Pérez-Pico, Ada María, 2020. "Innovation, entrepreneurship and knowledge in the business scientific field: Mapping the research front," Journal of Business Research, Elsevier, vol. 115(C), pages 475-485.
    11. Carla Daniela Calá & Miguel Manjón-Antolín & Josep-Maria Arauzo-Carod, 2016. "Regional determinants of firm entry in a developing country," Papers in Regional Science, Wiley Blackwell, vol. 95(2), pages 259-279, June.
    12. Chahal, Hardeep & Gupta, Mahesh & Lonial, Subhash & Raina, Swati, 2019. "Operational flexibility-entrepreneurial orientation relationship: Effects and consequences," Journal of Business Research, Elsevier, vol. 105(C), pages 154-167.
    13. Carlos Bazan, 2022. "Effect of the University’s Environment and Support System on Subjective Social Norms as Precursor of the Entrepreneurial Intention of Students," SAGE Open, , vol. 12(4), pages 21582440221, October.
    14. Avlonitis, George J. & Salavou, Helen E., 2007. "Entrepreneurial orientation of SMEs, product innovativeness, and performance," Journal of Business Research, Elsevier, vol. 60(5), pages 566-575, May.
    15. R. Sandra Schillo & Ajax Persaud & Meng Jin, 2016. "Entrepreneurial readiness in the context of national systems of entrepreneurship," Small Business Economics, Springer, vol. 46(4), pages 619-637, April.
    16. Helena Šlogar & Bojan Morić Milovanović & Stella Hrvatin, 2023. "Does the Relationship between Entrepreneurial Orientation and Subjective Financial Firm Performance Have an Inverted U-Shape? Evidence from Southeast European SMEs," Administrative Sciences, MDPI, vol. 13(2), pages 1-16, January.
    17. Holger Patzelt & Dean A. Shepherd, 2009. "Strategic Entrepreneurship at Universities: Academic Entrepreneurs’ Assessment of Policy Programs," Entrepreneurship Theory and Practice, , vol. 33(1), pages 319-340, January.
    18. Zahra, Shaker A., 1996. "Technology strategy and new venture performance: A study of corporate-sponsored and independent biotechnology ventures," Journal of Business Venturing, Elsevier, vol. 11(4), pages 289-321, July.
    19. Gubik, Andrea S. & Vörös, Zsófia, 2023. "Why narcissists may be successful entrepreneurs: The role of entrepreneurial social identity and overwork," Journal of Business Venturing Insights, Elsevier, vol. 19(C).
    20. Nida Platin & Hande Sinem Ergun, 2017. "The Relationship between Entrepreneurial Orientation and Performance; Evidence from Turkish SMEs," Business and Management Studies, Redfame publishing, vol. 3(2), pages 78-89, June.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rbs:ijbrss:v:13:y:2024:i:5:p:547-557. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Umit Hacioglu (email available below). General contact details of provider: https://edirc.repec.org/data/ssbffea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.