Financial performance measures and business objectives attainment in fast food SMMEs in the Cape Metropoli s: a preliminary liability and suitability analysis
- Authors: Ukpere, Wilfred I. , Smit, Yolande , Ngary, Clency , Bruwer, Juan-Pierre
- Date: 2014
- Subjects: Fast food restaurants - Economic aspects - South Africa - Cape Town
- Type: Journal
- Identifier: uj:5455 , ISSN 2039-2117 , http://hdl.handle.net/10210/13431
- Description: According to the Small Business Act No. 102 of 1996, Small Medium and Micro Enterprises (SMMEs) were introduced by the South African government to assist with the achievement of uplifting the national economy to reduce the rising trend unemployment and poverty in the country. SMMEs are believed to contribute up to 30% of the Gross Domestic Product of South Africa and are further believed to be responsible for absorbing up to 80% of the national labour force. Regrettably, prior research suggests that these initiatives have not succeeded in reducing unemployment and eradicating poverty, since more than 75% of SMMEs have been reported to fail within their first two years of existence. Economic factors have been blamed for the dismal outcomes. However, the achievement of business objectives is very relevant to how a business is managed, particularly from a financial outlook. In essence, the current authors are of the view that SMMEs were not attaining their objectives owing to the ineffective utilisation of financial performance measures, which consequently affects the smooth existence of these entities as a going concern. The main objective of this paper was to determine the extent to which SMMEs make use of financial performance measures to attain their business objectives. The research adopted a quantitative approach, which entails the collection of data from 30 SMMEs leaders (owners and/or managers) in the Cape Metropolis. All participants were required to adhere to a list of strict delineation criteria. The finding reveals that SMMEs leaders do make use of financial performance measures to manage their respective businesses towards the attainment of business objectives, but only to a limited extent.
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The status of internal controls in fast moving small medium and micro consumer goods enterprises within the Cape Peninsula
- Authors: Ukpere, Wilfred I. , Smit, Yolande , Bruwer, Juan-Pierre , Siwangaza, Luyolo
- Date: 2014
- Subjects: Small Medium and Micro Enterprises - South Africa , Business failures - South Africa
- Type: Journal
- Identifier: uj:5464 , ISSN 2039-2117 , http://hdl.handle.net/10210/13440
- Description: South African Small Medium and Micro Enterprises (SMMEs) play an important role in terms of stimulating the national economy. Despite the aforementioned, prior research shows that the failure rate of these entities is amongst one of the highest in the world, which is believed to be caused by economic factors. Several economic factors which impact on SMME sustainability have subsequently been researched and identified. As a result, SMME sustainability has received attention from the national government in recent times. One of economic factors which have been perceived by the authors as a major contributor to the high SMME failure rate is the lack of internal controls. Ultimately the responsibilities to both implement internal control frameworks and maintain all internal controls, rests with the management of an organisation. In essence, it can be said that a business is uncontrollable when it is essentially unmanageable. With the absence of adequate internal controls, an environment is created where an organisation is susceptible to all kinds of detrimental risks and, if these risks are not taken care of on time, the overall sustainability of the organisation could be negatively affected, which may lead in imminent failure. The main objective of this study was to determine the degree to which the implementation of an adequate system of internal control can help improve SMME sustainability. The research that was conducted was empirical in nature and fell within the ambit of the positivistic research paradigm. Questionnaires were administered and distributed to 110 owners and/or managers of SMMEs (SMME leaders) that operate within the fast moving consumer goods industry, situated in the Cape Peninsula. Based on the findings, it is obvious that most of the SMMEs do have a variety of internal controls, as prescribed by formal internal control frameworks but their support in terms of SMMEs sustainability were quite limited.
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