Factors Affecting the Adoption of Performance Measurement System Among Malaysian Small and Medium Enterprises

Performance measurement system plays an important role in enhancing the competitiveness of small and medium enterprises (SMEs). The purpose of this paper is to provide new empirical evidence on the factors that lead to the use of performance measurement system in Malaysian SMEs specifically in the manufacturing sector. A postal survey to the selected SMEs was used to facilitate the study. The results indicate that the performance measurement system is widely used by the majority of the respondents. The results also suggest that the SMEs make more use of performance measures when their firms encounter operational complexity as a results of growth in the use of modern technology, when the owner/manager is committed to their use and when the SMEs employed a qualified accounting staff. However the findings suggest that the firm's size and market competition are not likely to increase the higher use of performance measurement system among SMEs.