Horobets Tamara, PhD Student, Department of Business Administration and Corporate Security, International Humanitarian University, Odesa, Ukraine

ORCID ID: 0000-0002-3438-5143
e-mail: gorobez.tamara@gmail.com

Features of Performance Management on the Enterprises of Small and Medium Business

Abstract. Introduction. Small and medium-sized enterprises (SMEs) play an important role in national economies by providing employment opportunities and support for large companies in an effort to increase their competitiveness through the creation of appropriate strategic alliances and networks of companies. SMEs are flexible and innovative due to their size and decision-making processes. However, SMEs lag behind large enterprises in terms of designing and implementing new strategies, as well as developing new skills and technologies. Moreover, the disadvantages of existing methods of managing performance make large enterprises incompatible with the activities of SMEs.

Purpose. The purpose of this study is to formulate the main features of performance management on the SMEs, as well as to classify the performance management methods appropriate for small and medium businesses.

Results. The author considered the disadvantages that make existing methods in the theory and practice of enterprise performance management incompatible with the activity of SMEs. The main properties, which should be assigned the system of enterprise performance management for the SMEs, are formulated, namely: availability of information; admissibility of the strategy’s inflexibility; simplicity and low cost; and the predominant orientation towards financial indicators. Modern methods of the enterprise performance management are considered, in particular, performance benchmarking, value-oriented management (VBM), management based on economic value added (EVA), the method of the balanced scorecard (BSC), and the key performance indicators (KPIs). Considering these and other methods of enterprise performance management in terms of the possibility of their use in small and medium business, the author categorized them in the following groups: comparative methods, value-based methods, and mixed methods. It has been determined that the use of classified methods on SMEs should be based on the formulated main properties of the system of enterprise performance management for the small and medium-sized businesses.

Conclusions. The results of this study can be useful for managers and owners of small and medium-sized businesses who wish to increase efficiency and compete with large companies. In addition, the findings of this study will help the future research to find the ways of effective development and forming a mechanism for managing the enterprise performance of the small and medium-sized business.

Keywords: performance management; enterprises; small and medium business; management system; management methods.

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