Inventory management, managerial competence and financial performance of small businesses
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Date
2020
Journal Title
Journal ISSN
Volume Title
Publisher
Journal of Accounting in Emerging Economies
Abstract
The purpose of this study is twofold (1) to establish the relationship between inventory
management, managerial competence and financial performance and (2) to test whether inventory
management mediates the relationship between managerial competence and financial performance.
Design/methodology/approach – We employed cross-sectional and correlational research designs. A
questionnaire survey of 304 small businesses in Uganda was utilized. Hypotheses were tested using a bootstrap
analysis technique with the aid of Analysis of Moments Structures (AMOS) software.
Findings – Results indicate that inventory management and managerial competence are significantly
associated with financial performance of small businesses. Further, inventory management partially mediates
the relationship between managerial competence and financial performance.
Originality/value – Rather than focusing on only the direct effects of managerial competence and inventory
management, moreover independently, the indirect effect of inventory management is tested. Further, the
behavioral perspective of inventory management, as opposed to financial ratios, is utilized.
Description
Keywords
Inventory management, Managerial competence, Financial performance, Small businesses, Uganda
Citation
Orobia, LA, Nakibuuka, J., Bananuka, J., & Akisimire, R. (2020). Inventory management, managerial competence and financial performance of small businesses. Journal of Accounting in Emerging Economies , 10 (3), 379-398. DOI 10.1108/JAEE-07-2019-0147