Assessing the influence of financial management practices on organizational performance of small- and medium-scale enterprises
Purpose – Optimal application and commitment toward financial management practices enhance organization performance. This study aims to assess the influence of financial management practices on the organizational performance of small- and medium-scale enterprises. Design/methodology/approach – Data...
Saved in:
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Emerald Publishing
2024-10-01
|
| Series: | Vilakshan (XIMB Journal of Management) |
| Subjects: | |
| Online Access: | https://www.emerald.com/insight/content/doi/10.1108/XJM-09-2023-0192/full/pdf |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Summary: | Purpose – Optimal application and commitment toward financial management practices enhance organization performance. This study aims to assess the influence of financial management practices on the organizational performance of small- and medium-scale enterprises. Design/methodology/approach – Data were collected from 45 small-sized and 72 medium-sized firms. Data supported the hypothesized relationships. Construct reliability and validity were established through confirmatory factor analysis. The conceptual model and hypotheses were evaluated by using structural equation modeling. Findings – The results indicate that working capital significantly influenced organizational performance. Capital budget management significantly influenced organizational performance. A non-significant influence of asset management on organizational performance was observed. Research limitations/implications – The generalizability of the findings will be constrained due to the research’s SMEs focus and cross-sectional data. Practical implications – The study’s findings will serve as valuable pointers for stakeholders and decision-makers of SMEs in developing well-articulated and proactive financial management systems to ensure competitiveness, sustainability, viability, and financial competencies. Originality/value – The study adds to the corpus of literature by evidencing empirically that financial management practices significantly influenced SMEs’ performance. |
|---|---|
| ISSN: | 0973-1954 2633-9439 |