Exploring Performance Management in China's Family SMEs Based on Structural Equation Modelling and Back-Propagation Neural Network

Abstract

Because of the growing competition and challenges within the global business environment, understanding performance management has become essential to small and medium-sized enterprises (SMEs) as they have traditionally dominated the Chinese economy. In recognition of the limited studies with a specific focus on Chinese family SMEs, this study modelled and tested performance management by analysing four factors and eighteen indicators using structural equation modelling (SEM) and back-propagation neural network (BPNN). Secondary data from the Chinese Stock Market and Accounting Research (CSMAR) database were collected for this study. The results provide a better understanding of the proposed relationships between these variables through a review of their impact and correlations. This study suggested that four factors, including financial performance, external environment, internal environment, and enterprise development potential, will significantly impact performance management.