Evaluating the business performance of an SME: a conceptual framework

G.D. Sardana

International Journal of Globalisation and Small Business, 2009, vol. 3, issue 2, 137-159

Abstract: Performance measurement is fundamental to any management control. Performance evaluation, primarily helps in understanding weak areas, identifies gaps to carry out improvement and ensures that business activities are properly aligned with business objectives. A Small or Medium Enterprise (SME) has its own strengths and weaknesses, which need not be in common with those of a large organisation. Similarly, it has access to several opportunities and faces certain threats. Therefore, business performance imperatives in an SME are different from those applicable to a large organisation. The performance measurement model should reflect the same. This paper details the essentials of performance measures for an SME and examines how these differ from those for a large enterprise. The study brings out what determinants lead to success. Based on the objectives and determinants of success, the paper presents a business performance measurement framework, OPQR (for Organisational Design, Process Management, Quality Management and Recipient Satisfaction), and defines an appropriate set of performance measures for SMEs. The framework is nonprescriptive and recognises that there can be many approaches to achieve sustainable high levels of performance.

Keywords: performance measurement; key performance areas; KPAs; organisational health; process management; quality management; recipient satisfaction; results satisfaction; SMEs; SME evaluation; small and medium-sized enterprises; business performance; performance evaluation; organisational design. (search for similar items in EconPapers)
Date: 2009
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