Advanced Management Accounting-1. Discuss the role PMS can play in supporting small and medium enterprises (SMEs).
Currently, big corporations and small and medium enterprises (SMEs) are competing in an international market that is highly turbulent. To ensure that they continuously compete in an environment that is continuously changing, and that their competitive advantage is sustained, it is important that the management teams understands and monitors the performance of their organizations (Jamil & Mohamed, 2011). This has made performance management systems (PMS) to be one of the most significant factors for SMEs in the management of their daily activities. The capacity of the management to continuously update the PMS is a major challenge, and this especially applies for SMEs. This document critically analyzes the role PMS can play in supporting SMEs.
SMEs are required to be highly flexible as well as reactive to changes that occur in the market, but they lack enough resources and management expertise. A PMS that is effective can be crucial in assisting such firms to develop and improve the performance of their businesses. Before PMS can be used to support SMEs, there are a number of important factors that the management team must understand (Suttapong & Tian, 2012). To start with, the management should analyze and identify the attributes of PMS that will enable the SME to efficiently and effectively quantify and manage their performance. Previous studies have shown that several PMS theories in the past were developed to o