Organizational Capability in SMEs: Performance Measurement as a key system in supporting company development

Purpose – The aim of this study is to investigate both the path taken by companies in order to survive in a competitive environment and the factors that have favoured or limited their development. Design/methodology/approach – The study was carried out using a retrospective approach. Empirical evidence was gathered using a descriptive survey and data collected during previous research programs involving 100 SMEs located in the Veneto region (Italy). Findings – The findings show that a lack of organizational capabilities is one of the main factors limiting development in SMEs. The companies investigated appear to follow similar paths and performance measurement systems (PMS) could play a key role as a potential driver of managerial development in SMEs. Research limitations/implications – The study refers solely to Italian SMEs located in the Veneto region. Conclusions on the role played by PMS as a system for supporting development were based on a theoretical study; an ad hoc empirical study would be useful for further investigation of this topic. Practical implications – The study emphasizes the important role played by organizational capability for favouring the competitiveness and survival of SMEs. The study indicated that in SMEs managerial developments usually come later, following changes in strategy. Firms could prevent managerial crisis by implementing managerial systems. Originality/value – Traditionally the growth of SMEs is measured by turnover and number of employees. This study highlights the importance of investigating not only quantitative, but also qualitative growth to analyse development in SMEs. PMS is presented as a key managerial system that can support qualitative growth and promote the competitiveness of SMEs.