Inhibiting factors in the strategic financial management decision making process: Evidence from South African SMMEs

Abstract

The purpose of this article is to uncover the principal obstacles preventing small business owner managers from making sound strategic financial management decisions. These obstacles are generally related to the owner managers' reluctance to follow accepted theoretical norms (steps) in terms of information search and analysis. This reluctance is attributable to the decision makers' significant lack of knowledge and experience. Data gathered with a structured questionnaire was based on a sample of 143 small business owner managers registered with SEDA (Small Enterprise Development Agency) in South Africa. The results point to an absence of a proper theoretical framework for gathering and analysing information necessary for effective decision making. This framework commonly entails elements such as experience and techniques acquired from time spent in business and business intuition. Recommendations are made to assist small business owner managers to improve on their strategic decision making and resource allocation processes.