The Relationship Between Working Capital Management and Business Performance in Malaysia SMEs Family Business

Abstract

The study examines the relationship between working capital management and business performance in Malaysian SMEs family businesses. A questionnaire was developed and randomly distributed, and a total 0f 399 questionnaires were completed. The statistical tests, which include descriptive and Pearson correlation analysis, were used to test the hypotheses. The results revealed a significant relationship between working capital management and the business performance of SME family businesses in Malaysia. The results also show that the studies supported theories of the Resource-Based View (RBV) theory (Wernerfelt, 1984) and Peaking Order Theory (Myers, 1984). This study concludes that SMEs in Perlis, Kedah, Kelantan, and Terengganu would do better if they had more working capital and managed it better. Family-owned SMEs in Perlis, Kedah, Kelantan, and Terengganu should focus more on managing their working capital in day-to-day operations. The results of this study contribute theoretical and practical. With all the contributions, the stakeholders can know the SME's business funding requirements in managing working capital management simultaneously, increasing business performance.