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The use of quantitative and qualitative criteria in the measurement of performance in small firms

Robin Jarvis (Professor of Accounting and Finance and head of the School of Accounting and Finance at Kingston University)
James Curran (Emeritus Professor of Small Business Studies at Kingston University)
John Kitching (Senior Research Fellow in the Small Business Research Centre at Kingston University)
Geoffrey Lightfoot (Lecturer in MIS and Accounting in the Department of Management at Keele University)

Journal of Small Business and Enterprise Development

ISSN: 1462-6004

Article publication date: 1 June 2000

Abstract

Concern has been expressed, over the years, about the financial management strategies adopted by small firms, but very little is known about these practices. Business performance measures are an important element of these financial management strategies. The paper discusses the findings from research carried out in the UK examining the quantitative and qualitative criteria in the measurement of performance in small firms. Semi‐structured interviews were carried out with 20 owner‐managers from both manufacturing and service sectors. Orthodox theory assumes that the objective of the firm is to maximise profits, and it follows that the performance measures advocated are largely based upon this theory. However, research has shown that small firms pursue a range of goals. It was, therefore, not surprising to find that owner‐managers of small firms used a variety of measures and indicators to assess business performance. Profit measures were found to be less important than conventional views suggest. In particular, cash flow indicators were considered to be critical. Other performance measures adopted by owner‐managers include the quality of inputs and outputs and intangible indicators.

Keywords

Citation

Jarvis, R., Curran, J., Kitching, J. and Lightfoot, G. (2000), "The use of quantitative and qualitative criteria in the measurement of performance in small firms", Journal of Small Business and Enterprise Development, Vol. 7 No. 2, pp. 123-134. https://doi.org/10.1108/EUM0000000006834

Publisher

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MCB UP Ltd

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