Assessing managerial skills in SMEs for capacity building

Abstract

Purpose

The paper aims to identify perceived critical managerial factors (PCMFs) affecting the performance of SMEs, show the direction and extent of relationship between PCMFs and firm characteristics, and forward some research and policy implications.

Design/methodology/approach

The paper uses a survey questionnaire to collect data on SMEs' perceptions of the degree of impact of selected managerial issues on their performance. The data were factor analyzed (principal component analysis), purified (Varimax rotation) and validated for reliability (Cronbach's α values) to identify the PCMFs. Both descriptive and inferential statistics were used to present and analyze the data.

Findings

The paper identifies and ranks four PCMFs affecting the performance of SMEs in a developing African economy. Important relationships are found between PCMFs and firm characteristics, and among the PCMFs themselves. The paper forwards some research and policy implications.

Research limitations/implications

The paper shows the need to replicate the study in other places to see whether the findings remain consistent. Although based on a mixed sample and limited to examination of perceptions rather than actual problems, the findings are highly relevant in designing business support initiatives and training programmes for SMEs.

Practical implications

Future research should develop a framework for conceptualizing and operationalizing the managerial construct in the context of SMEs. Small business support providers, policy makers and practitioners should identify, prioritize and customize the most influential managerial problems in designing entrepreneurial training and assistance programmes.

Originality/value

Research in the study of PCMFs in SMEs in developing African economies is scarce and lacking. The findings in this paper serve as an addition to the existing limited research output in the area. Moreover, the study adopted a systematic approach to identify, factor analyze, test and validate the measurement instrument for the managerial construct.

Citation

Pansiri, J. and Temtime, Z.T. (2008), "Assessing managerial skills in SMEs for capacity building", Journal of Management Development, Vol. 27 No. 2, pp. 251-260. https://doi.org/10.1108/02621710810849362