Browsing by Author "Van Zyl, Christo Jasper"
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- ItemA practical performance measurement framework for SMEs in a South African context(Stellenbosch : Stellenbosch University, 2020-03) Van Zyl, Christo Jasper; Von Leipzig, Konrad; Stellenbosch University. Faculty of Industrial Engineering. Dept. of Industrial Engineering.ENGLISH ABSTRACT: The key word in the title of this research study, is “practical”. A workable performance measurement framework (the business development scorecard, BDSC) is proposed for the owners and managers of small and medium-sized businesses (SMEs) in South Africa. The new framework lays the foundation for a novel approach to SME performance measurement in South Africa that needs further development. To the best knowledge of the researcher, no similar framework exists. A secondary outcome of this research is the list of requirements for a SME performance measurement framework in South Africa. SMEs play a very significant role in the South African economy. Sources differ, but contributions of 42 percent to gross domestic product and 50 percent to employment are commonly mentioned. A larger number of successful SMEs are therefore good for the economy – especially for South Africa with its current unemployment rate of 29 percent. However, South African SMEs have a very high failure rate compared to most other countries worldwide. Measurement drives performance, and therefore the correct performance measurement system applied in a SME will increase its chances of success. A practical performance measurement framework for SMEs will promote better and wider use of performance measurement in SMEs with resulting economic benefits. By studying the relevant SME- and performance measurement literature, as well as logical conclusions from the researcher, the requirements for a South African SME performance measurement framework were identified. Popular existing frameworks were critically evaluated against these requirements with the objective to identify a framework or components of frameworks that could be used in the design of the new framework. A new framework, the business development scorecard (BDSC), is proposed that fits all the identified requirements. The BDSC uses principles from three different existing frameworks to adapt the Balanced Scorecard framework. It can be implemented incrementally with only the assistance of the SME’s accountant, which addresses the chronic resource scarcity of SMEs. The BDSC contains generic measures that drive survival of any SME as well as unique measures that drive the execution of a specific SME’s strategy. The framework further adapts the Balanced Scorecard by adding a fifth measurement perspective of “basic literacy” to the existing four measurement perspectives (financial, customer, processes, learning) of the Balanced Scorecard. The basic literacy perspective emphasises the South African context of the framework. The validity and practical use of the BDSC were proven through semi-structured interviews with a sample of 20 potential users of the framework. Participants in the survey were requested to express their level of agreement with the key attributes of the BDSC. Survey results strongly supported the BDSC. The BDSC should make a practical contribution to a better success rate among South African SMEs.