Gender differences in Working Capital Management amongst Small Business Owners in Uganda

Orobia, Laura

doi:10.22610/jebs.v5i4.398

Cited by 4 publications

(2 citation statements)

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“…Recent developments in leadership emphasize the gender difference in workingcapital management, which involves planning, forecasting and monitoring. It is, therefore, argued that the style women employ in working-capital management differs from that of their male counterparts mainly through attitude[9] and perceived usefulness[10] (Orobia, 2013). Accordingly, when owner-managers perceive working-capital management to lead the expected performance, this perception will force them to undertake the behaviours.…”

Section: Data and Preliminary Analysismentioning

confidence: 99%

“…This is consistent with research by Romano et al (2001), which reveals that perceived risk and attitudes toward personal risk determine the capital structure decision-making. Regarding the gender difference, the perceived usefulness of working-capital management seems to be stronger for male owner-managers of small businesses than females (Orobia, 2013). On the other hand, female owner-managers are more inclined to have negative attitudes towards financial management and to engage in poor financial management behaviour than men (Hira and Mugenda, 2000).…”

Section: Data and Preliminary Analysismentioning

confidence: 99%

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Mixed-gender ownership and financial performance of SMEs in South Africa

Kengne

2016

IJGE

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Purpose The purpose of this paper is to investigate whether the presence of women among owner-stakeholders affects firms’ financial performance. Particularly, it extends the corporate governance literature by linking stakeholder theory and gender differences to explain why gender composition of ownership matters for firms’ performance. As the management of small and medium-scale enterprises (SMEs) revolves around owner-managers and their individual characteristics that are likely to affect their achievements, the study further investigates the relationship between the gender composition of ownership and the firm survival. Design/methodology/approach Using survey data on SMEs for 2007 and 2010, this study uses a panel-level heteroskedasticity technique and a probit methodology to assess the effect women’s presence among owners may exert on SMEs performance and survival, respectively. Findings Results indicate that firms jointly owned by men and women appear to perform better than those owned by men although the presence of women among owners does not correlate with firm survival. Research limitations/implications While the findings of this study shed some light on the performance impact of gender composition of firm ownership, reports based on the presence of women among owners may not present the full picture. Whether the ownership is shared equally between different genders might provide further insides on the magnitude and/or robustness of such effect. Moreover, a small sample period (T = 2) was used to analyse a single industrial sector (manufacturing), and even though the Hausman test confirmed the use of random-effects specification, caution should be taken when generalizing the findings to other cases. Practical implications The findings suggest that the leadership in mixed-gender context propels a perspective of women as a valuable resource within SMEs, but relying on it to sustain the survival would be unwise. Social implications South Africa scores particularly high on positive actions towards women entrepreneurship, and this is compounded in the SMEs sector by managerial attitudes that could offer positive developments for women. Originality/value The positive and significant relationship between women’s presence among owners and SMEs financial performance in South Africa complements the almost exclusively reported negative impact of gender diversity on firm performance. Consequently, mixed-gender owners’ team can be used as a fulcrum to promote SMEs growth in South Africa.

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Section: Data and Preliminary Analysismentioning

confidence: 99%

Section: Data and Preliminary Analysismentioning

confidence: 99%

Mixed-gender ownership and financial performance of SMEs in South Africa

Kengne

2016

IJGE

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Why some small businesses ignore austere working capital management routines

Orobia

Padachi

Munene

2016

Journal of Accounting in Emerging Economies

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Purpose – The purpose of this paper is to investigate factors explaining take-up rate of working capital management routines in small-scale businesses. Design/methodology/approach – A cross-sectional survey research was employed using a sample of 450 small-scale businesses in the central business district of Kampala, Uganda. Common working capital management routines and activity rates were analyzed using descriptive statistics. While binary logistic regression analysis was conducted to discriminate between businesses that engage in working capital management frequently and those that do so less frequently. Findings – The results show that on average, the most frequently performed routines relate to safeguarding cash and inventory, and credit risk assessment. Payment management routines are least performed. Second, business size, perceived usefulness and attitude explain high take-up rate of working capital management routines in small-scale businesses. Business age, level of education and financial management training are inconsequential in determining the likelihood to undertake working capital management frequently. Research limitations/implications – Paucity of studies world over on the input perspective of working capital management limited comparison of the findings with previous research. Future studies should be conducted to confirm the results. Practical implications – The study findings imply that policy makers should develop work-based training programs that take into account the business size effect. Originality/value – This study contributes to existing working capital management literature by explaining activity rate in a developing country perspective.

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Financial management practices in successful Small and Medium Enterprises (SMEs)

Wolmarans

Meintjes

2015

SAJESBM

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Although the success of small, medium and micro enterprises (SMEs) is extremely important for the South African economy, their failure rate is amongst the highest in the world; some researchers estimate as high as 90 percent. Research has shown that the lack of financial management skills and application of financial management practices are some of the biggest factors contributing to SME failure. However, it is not clear from the literature which of these skills and practices are more important than others. This study aims to fill this gap by determining which financial management skills are relevant for successful SMEs. A survey was done on a sample of owner-managers of successful SMEs who had been asked, firstly, whether they performed different financial management practices and, secondly, how frequently they performed these in their companies. The study concludes that practices regarding working capital as well as profitability are much more relevant than those regarding a balance sheet or strategic finance. Similarly, financial practices related to cash flow and decision making are more relevant than those related to planning or analysing. It may be true, due to the high risk and volatile environment of SMEs, as well as the challenges that are often underestimated, that financial practices which academics regard as important are not always implemented by these companies. This study contributes to the existing body of knowledge as it determines the relative relevance and frequency of use of financial management practices by successful SMEs.

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Gender differences in Working Capital Management amongst Small Business Owners in Uganda

Cited by 4 publications

References 41 publications

Mixed-gender ownership and financial performance of SMEs in South Africa

Mixed-gender ownership and financial performance of SMEs in South Africa

Why some small businesses ignore austere working capital management routines

Financial management practices in successful Small and Medium Enterprises (SMEs)

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