Innovative System for Measuring SMEs Performance

Innovative System for Measuring SMEs Performance

Abdel Moneim M. B. Ahmed (Professor of Management Sciences, UAE Academy Abu Dhabi, UAE) and Abdullah A. Abonamah (Professor of Management Sciences, UAE Academy, Abu Dhabi, UAE)
DOI: 10.4018/ijcrmm.2013100101
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Abstract

This paper refers to the increasing interest in the development of theoretical frameworks in the area of measuring business performance, companies of all sizes have used them to test different business policies and strategies. Literature shows that these frameworks do not provide an effective and robust system, which is needed in today's dynamic market. For example, the existing frameworks do not relate to the actual strategies in place. Also, none can be considered generic, which makes any attempt of integrating measures and performance indicators virtually impossible. The authors discuss this problem and propose an efficient and flexible system for measuring small and medium-sized enterprises (SMEs) performance. A computer-based tool to select the appropriate measures and performance indicators to support the implementation process of company's strategic goals is also presented.
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Introduction

The paper is part of an ongoing research into developing a “Surpetitive Framework” for Small-to-Medium enterprises. Specifically, it addresses the problems associated with existing organizational performance measurement system frameworks. It highlights the importance of developing a computer-based system to select the appropriate measures that indicate company’s performance. The paper is divided into three parts. The first part briefly explains the various components of the “Surpetitive Framework” and the reasons of the selection decisions of these components.

The second part emphasises the key role a well-integrated performance measurement system plays in affecting the behavior of individuals towards continuous improvement within an organization environment. The third part discusses two of the most frequently applied frameworks and highlights their pitfalls with discussion and cross-comparisons to the proposed “Surpetitive” Framework. The paper ends with detailed description as well as a theoretical justification of the content of the developed computer based system and conclusions are then drawn.

Surpetitive Framework

The Surpetitive Framework consists of four inter-related components. The first component is the foundation, which comprises three layers named: Layer one (the purpose), which is a company’s moral vision. Layer two (business values), represents all individual and organizational values. These two layers are further interpreted in Layer three (mission statements).

The second component consists of six pillars:

  • 1.

    Innovation;

  • 2.

    Learning process, individual’s knowledge and information systems;

  • 3.

    Resources utilization;

  • 4.

    Reward schemes;

  • 5.

    Benchmarking techniques; and

  • 6.

    Stakeholders’ relationships.

The third component - the central column (Performance Measurements) represents the appropriate measures that signal how a company is performing towards achieving its goals and targets. Ahmed and Abdalla (1999) pointed out that component four represents the roof (effective leadership) that manages all those activities carried out internally and externally. All these four components are shown in Figure 1 and described in more detail in the following sections.

Figure 1.

The proposed surpetitive framework

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