Budgeting and budgetary control system affecting Pakistan SMEs performance

Abstract

Organizations face intense competition in the commercial sector, both in developed and developing nations. Businesses that intend to remain competitive must encourage the desire to understand the function of budgeting and how it affects their financial success. The current study is conducted to study the effect of budgeting and budgetary control systems on Pakistan SMEs performance circulating an adopted questionnaire physically, considering 210 respondents as the sample size using purposive sampling technique, as a result of which 187 responses were received, with a valid response rate of 89.04%. The proposed investigation comprises descriptive statistics, correlation analysis, convergent & discriminant validity, and regression analysis. The current study's findings revealed a significant positive impact of both budgeting and budgetary control systems on SMEs performance. The study recommends senior managers be careful while preparing a long-term comprehensive budgetary plan and also implement measures to address existing budgetary control system issues. A significant limitation of this study is to consider only non-financial performance as a SMEs performance measuring tool neglecting financial performance, which potential researchers can eliminate.

Keywords

• budgeting
• smes performance
• budgetary control system
• budgeting issues