The Use of Balanced Scorecard and the Business Performance of Manufacturing SMEs in Cape Town – Before COVID 19 Pandemic

Abstract

Small and medium-sized enterprises (SMEs) in the manufacturing sector in South Africa face tremendous challenges for survival in today’s global and dynamic business environment. To surmount the unavoidable challenges, manufacturing SMEs adopt newer management tools to illuminate their strategies into actionable activities to improve their performance. Some studies have acknowledged the balanced scorecard (BSC) as one of the SMEs' tools to improve business performance. Thus, this paper analyses the BSC usage patterns by manufacturing SMEs in Cape Town and their performance. The study utilised questionnaires to collect data from a sample size of 100 manufacturing SMEs, operating in Cape Town and SPSS version 25.0 for data analysis to examine the convergence of the observed variables in the BSC usage and manufacturing SMEs' business performance. Results show that SMEs' poor performance in the manufacturing sector is partly attributed to the non-usage of the BSC. There is a strong positive relationship between the use of the BSC and manufacturing SMEs' business performance before the Pandemic – COVID19.