Application of strategic performance measures in small and medium-sized manufacturing enterprises in Nairobi: a case of the balanced scorecard perspectives
This study sought to determine the performance measures used and the extent of their application in manufacturing small and medium-sized enterprises (SMEs) in Nairobi. The research design was a survey conducted on a target population of all the manufacturing companies in Nairobi from which the stratified sampling technique was used to come up with a sample size of 100 SMEs. The study used questionnaires in data collection. Descriptive and inferential statistics were used in analyzing the data. One-way analysis of variance between and within groups was used to develop comparisons to determine the relationship between knowledge of each BSC measurement perspective and its application in manufacturing SMEs. Frequencies, mean and standard deviation were used to draw the descriptive statistics. The study found that there was a gap between the knowledge of customer perspective measures, internal business perspective measures and innovation/learning and growth perspective measures and their application in SMEs in Nairobi. Since value is created through internal business processes and innovation and learning Igrowth, manufacturing SMEs in Nairobi should strive to understand how they view these elements as a major aspect of their performance measurement. Business managers should identify the critical internal business processes which the firm must excel at and should identify the infrastructure that the organization must build to create long- term growth and improvement of its people, systems and organizational structure. Financial measures should be complemented by nonfinancial measurement tests related to customer, internal business processes and innovation and learning/growth with the integration of the different business areas being encouraged and the management's strategic objectives being reflected. For manufacturing SMEs this will eventually translate to the competitiveness hence profitability of the firms.