KPIs and BSC in the SME segment. Myth or reality?
Volume 02 Issue 1
Authors
Peter Gallo, Jaroslav Kollman, Juliana Pavlinska, Jan Dobrovic
Keywords
small and medium-sized enterprises, Key Performance Indicators, Balanced Scorecard
Citation in APA style
Gallo, P., Kollman, J., Pavlinska, J. & Dobrovic, J. (2024). KPIs and BSC in the SME segment. Myth or reality? Journal of Business Sectors, 2 (1), 1–10. https://doi.org/10.62222/YTKL9850
DOI
Abstract
Research background:
Companies are under considerable pressure to continuously improve their performance in today's highly competitive business world. KPIs have evolved as indispensable tool for assessing and measuring the performance of businesses against strategic objectives. Purpose of the article: The aim of this study is to present the current use of Balanced Scorecard systems and related KPIs in the implementation of the strategic management system in industrial companies in the SMEs segment and introduce a system of proposals for improving their performance, value, and competitiveness in the long term.
Purpose of the article:
Methods:
Based on the research results, we can conclude that companies with more than 20 employees use strategic management systems and have linked KPIs. We also tested and proved the hypothesis of using supporting complementary management systems significantly more often by these companies. However, our research supports our hypothesis that companies that do not use BSCs do not have statistically significantly lower economic ROE. We also did not confirm that the turnover was lower in firms that did not use BSCs. On the other hand our research has shown that better strategic management systems must be built, as there is a lack of consistency between the objectives and essential performance indicators in all aspects of the balanced scorecard.
Findings & Value added:
The attitudes of owners and managers in understanding the most important aspects of financial management are relatively high in both countries, and these attitudes were similar. Perceptons of financial risk differ between owners and managers in the Czech Republic. Financial risk is better perceived in the category of managers than in the category of SMEs owners. The correct perception of financial risk in Slovakia is at a slightly higher level than in the Czech Republic, while the perception of owners and managers is very similar. Business owners in both countries confirmed that they are better able to manage financial risks in the firm than managers (however, these differences were not statistically significant). Managers in Czech firms were more positive about financial performance compared to owners (statistically significant difference). Similarly in Slovakia (however, this was a statistically insignificant difference). These findings may be inspiring for the scientific field and also for economic policy in these countries.