How do small business owners manage working capital in an emerging economy?

Laura A. Orobia, Warren Byabashaija, John C. Munene, Samuel K. Sejjaaka and Dan Musinguzi

Qualitative Research in Accounting & Management, 2013, vol. 10, issue 2, 127-143

Abstract: Purpose - The purpose of this study was to examine the actions owner‐managers of small businesses undertake in managing working capital. Design/methodology/approach - The study adopted an exploratory research design. The point of saturation was achieved after ten owner‐managers were interviewed. Data were analyzed using content analysis technique with the aid of NVivo software. Verbatim texts were used to explain the emergent themes. Findings - The findings indicate that in the absence of systems, structures and procedures, small business owner‐managers intuitively plan, monitor and control their working capital. The activities undertaken include; reliance on memory and oral agreements, informal planning, assuming inventory limits, unconventional record keeping, cash flow based information management and giving credit to close associates. Research limitations/implications - A more detailed investigation of the steps in the action sequence ma y advance our understanding of the process. Future studies need to test the effect of personal characteristics on working capital management process. Practical implications - Owner‐managers of small businesses do not require the same degree of sophistication employed in planning, monitoring and controlling working capital. They require soft skills. Therefore, academicians, practitioners and policy makers need to emphasize knowledge management and cash accounting. Originality/value - This study examines the process perspective of working capital management, an aspect that has not been adequately highlighted in previous studies.

Keywords: Working capital management; Small businesses; Qualitative research; Owner‐managers (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:qrampp:v:10:y:2013:i:2:p:127-143

DOI: 10.1108/QRAM-02-2012-0008

Access Statistics for this article

Qualitative Research in Accounting & Management is currently edited by Lukas Goretzki and Thomas Ahrens

More articles in Qualitative Research in Accounting & Management from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().