Please use this identifier to cite or link to this item: https://hdl.handle.net/10321/3680
Title: Factors influencing the adoption of management accounting practices (MAPs) by small and medium enterprises (SMEs) in the manufacturing sector in Durban
Authors: Msomi, Mbali Portia 
Issue Date: Oct-2020
Abstract: 
Most countries recognise small and medium enterprises (SMEs) as a key element
in strengthening the economy and in reducing the high unemployment rate that is
currently prevailing globally and especially in South Africa. Although these
enterprises contribute significantly towards the economy, they often fail to survive
beyond their start-up phase due to a number of challenges affecting their business
life-cycle. These challenges stem from both internal and external factors and, if not
curbed during the initial phase of the enterprise, they may cause the business to fail
prematurely. Common causes of failure include, but are not limited to, difficulties
encountered in gaining access to start-up capital; a lack of entrepreneurship or
business management skills; a lack of appropriate business education along with a
lack of any culture of innovation or of networking skills amongst their
owner/managers. Finally, there is frequently a failure to adopt management
accounting practices (MAPs). It is with this last issue that this research is concerned.
MAPs are techniques used to provide management with financial and non-financial
information to facilitate the planning, controlling and decision making process of an
organisation. These techniques are recognised to improve business performance
and sustainability substantially, and the application of these techniques is often seen
as determining the success or failure of an enterprise. However, there has been
some concern around the adoption of MAPs amongst manufacturing SMEs,
especially in the South African context. Hence, the aim of this study was to explore
the critical factors influencing the adoption of MAPs by SMEs in the manufacturing
sector in South Africa using a case study of businesses located in and around
Durban. The aim was also to provide informative guidelines to promote the
facilitation of MAP practices.
A quantitative research approach was adopted involving non-probability, purposive
sampling to ensure that the relevant participants were chosen. A sample consisting
of 202 participants was considered appropriate for a population with over 1050
manufacturing SMEs registered in Durban (Department of Trade and Industry report
2016/17). A questionnaire was used to collect data from the participants in the study. A pilot test was conducted to ensure that the research instrument was adequately
prepared. The data collected were analysed using the Statistical Package for the
Social Sciences (SPSS) version 26.0, and the results were presented using graphs,
tables and charts.
The results of the study showed that both traditional and contemporary MAPs are
regarded as relevant in this changing business environment. Manufacturing SMEs
still see the significance of using traditional MAPs, although with the new industrial
revolution taking over globally, more sophisticated new MAPs have been
implemented by several manufacturing SMEs, and this has proved more effective
in their gaining a competitive edge and demonstrating innovation and thus in
achieving market success. The findings of this study are therefore in a position to
contribute towards promoting the adoption of appropriate up-to-date MAPs that are
more technically advanced to meet current management needs.
The findings also revealed that the key internal factors identified by the respondents
in this adoption process were: the owner’s business experience and skills, the firm’s
structure, its size, and changes in the firm’s size. Amongst the external factors, the
results of the study showed that competition, technology, market innovation, market
success, and networking with other businesses, were regarded as the predominant
factors influencing the adoption of MAPs by manufacturing SMEs in the Durban
area. Although the study was able to identify these critical factors influencing the
adoption of MAPs, the results were limited to those views expressed by the
responding stakeholders from manufacturing SMEs located in the Durban area, and
therefore can only be generalised with caution.
The study recommends that both traditional and contemporary MAPs should be
adopted upon the inception of a business, and that the relevant stakeholders should
invest in educating themselves so that they can have a better understanding of the
available MAPs, and their adoption and implementation within their business
processes. The study further recommends that manufacturing SMEs identify and
adopt the most appropriate MAPs to promote cost effective measures, optimise
business performance and ensure sustainable growth. The effective adoption of MAPs would also be aided if stakeholders were to make more use of government supporting agencies allowing them to benefit from further
financial assistance, mentorship and training of staff.
Description: 
Submitted in fulfilment of the requirements of the degree of Master of Accounting: Cost and Management Accounting in the Faculty of Accounting and Informatics at the Durban University of Technology, 2020.
URI: https://hdl.handle.net/10321/3680
DOI: https://doi.org/10.51415/10321/3680
Appears in Collections:Theses and dissertations (Accounting and Informatics)

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