How Do Small Business Owners Manage Working Capital in An Emerging Economy? A Qualitative Inquiry
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Date
2013
Journal Title
Journal ISSN
Volume Title
Publisher
Qualitative Research in Accounting & Management.
Abstract
The purpose of this study was to examine the actions owner-managers of small businesses
undertake in managing working capital.
Design/methodology/approach – The study adopted an exploratory research design. The point of saturation
was achieved after ten owner-managers were interviewed. Data were analyzed using content analysis
technique with the aid of NVivo software. Verbatim texts were used to explain the emergent themes.
Findings - The findings indicate that in the absence of systems, structures and procedures, small business
owner-managers intuitively plan, monitor and control their working capital. The activities undertaken
include; reliance on memory and oral agreements, informal planning, assuming inventory limits,
unconventional record keeping, cash flow based information management and giving credit to close
associates.
Research limitations - A more detailed investigation of the steps in the action sequence may
advance our understanding of the process. Future studies need to test the effect of personal
characteristics on working capital management process.
Practical implications – Owner-managers of small businesses do not require the same degree
of sophistication employed in planning, monitoring and controlling working capital.
Description
Keywords
Working capital management, Small businesses, Qualitative research
Citation
Orobia, L. A., Byabashaija, W., Munene, J. C., Sejjaaka, S. K., & Musinguzi, D. (2013). How do small business owners manage working capital in an emerging economy? A qualitative inquiry. Qualitative Research in Accounting & Management.