Effect of Internal Controls on Financial Performance
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the study
Over the past decade, Africa and other developing regions have been in the midst of tremendous changes. Market liberalization and governmental decentralization policies have interfaced with globalization and urbanization trends to dramatically transform social, political, economic and cultural lives. In this context of rapid change, SME operations can no longer remain behind serving only to meet sustenance income for their owners. SMEs engagements have to become a dynamic and integral part of the market economy.
The identification of factors that determine new venture performance such as survival, growth or profitability has been one of the most central fields of entrepreneurship research (Sarasvathy, 2004). A multitude of research papers has focused on exploring various variables and their impact on performance (Bamford et al., 2004). However, in order to be able to analyze and model the performance of new ventures and SMEs, the complexity and dynamism they are facing as well as the fact that they may not be a homogenous group but significantly different in regard to many characteristics (Gartner et al., 1989) have to be taken into account.
In line with the above, there have been challenging debates all over the world on the role played by Small and Medium Enterprises (SMEs) towards economic development. Therefore, a vast literature on the growth and performance of SMEs has been developed over the years. Small and Medium Enterprises (SMEs) have had a privileged treatment in the development literature, particularly over the last two decades. Hardly any arguments are put forward against SMEs, even if development policies do not necessarily favour them and economic programs, voluntarily or not, often continue to result in large capital investment.
Arguments for SMEs come from almost all corners of the development literature programs, particularly in the less
1.0 INTRODUCTION
1.1 Background of the study
Over the past decade, Africa and other developing regions have been in the midst of tremendous changes. Market liberalization and governmental decentralization policies have interfaced with globalization and urbanization trends to dramatically transform social, political, economic and cultural lives. In this context of rapid change, SME operations can no longer remain behind serving only to meet sustenance income for their owners. SMEs engagements have to become a dynamic and integral part of the market economy.
The identification of factors that determine new venture performance such as survival, growth or profitability has been one of the most central fields of entrepreneurship research (Sarasvathy, 2004). A multitude of research papers has focused on exploring various variables and their impact on performance (Bamford et al., 2004). However, in order to be able to analyze and model the performance of new ventures and SMEs, the complexity and dynamism they are facing as well as the fact that they may not be a homogenous group but significantly different in regard to many characteristics (Gartner et al., 1989) have to be taken into account.
In line with the above, there have been challenging debates all over the world on the role played by Small and Medium Enterprises (SMEs) towards economic development. Therefore, a vast literature on the growth and performance of SMEs has been developed over the years. Small and Medium Enterprises (SMEs) have had a privileged treatment in the development literature, particularly over the last two decades. Hardly any arguments are put forward against SMEs, even if development policies do not necessarily favour them and economic programs, voluntarily or not, often continue to result in large capital investment.
Arguments for SMEs come from almost all corners of the development literature programs, particularly in the less
References: 1. European Commission (2003-05-06). “Recommendation 2003/361/EC: SME Definition”. Retrieved 2009-04-05. IDEAS at the Economic Research Department of the Federal Reserve Bank of St. Louis Graphic Business (March 23, 2010) by Micro-finance Africa. http://EzineArticles.com/?expert=Anoff_Emmanuel GNA, THURSDAY, AUGUST 13, 2009, GHANA NEWS. . Storey D.J (1994), Understanding the Small Business Sector, Routledge Study of informal Finance in Ghana’ ODI Working Paper No Steel W.F (1977), Small Scale Employment and Production in Developing Countries. Evans, M. ; Hastings, N.; and Peacock, B. Statistical Distributions, 3rd ed. New York: Wiley, 2000. The Academy of Management Review © 1997 Academy of Management Joan Joseph Castillo (2009)