The usage of cost control measures to improve organisational performance of small and medium-sized enterprises in Western Cape, South Africa

Abstract

The study investigated the use of cost control measures on organisational performance in small and medium-sized manufacturing enterprises in Western Cape because a lack of control measures could negatively affect business development. Consequently, there is a need to carry out a study on the use of control measures towards improving organisational performance of small and medium-sized enterprises. This was achieved by the identifying the type of cost control in organisational performance, purposes of cost control techniques used by small and medium-sized enterprises, challenges of cost control as it affects organisational performance and cost control measures adopted by small and medium-sized manufacturing firms and establishing requirements to ensure an effective cost control system. The study collected data using a self-administered structured questionnaire with closed-ended questions designed in line with the research objectives. The sample was chosen using purposive sampling technique and data collected from small and medium-sized manufacturing enterprises. Data of the descriptive survey was analysed using Statistical Package for Social Sciences version 25. Frequency tables and pie charts were used to present the findings. The findings show that most respondents agreed to the use of various cost control measures towards improving organisational performance in small and medium-sized enterprises. Some challenges faced in implementing the various control measures were noted. The study established a requirement for effective cost control system that will enhance the performance of small and medium-sized enterprises and recommended that cost control should be in place in all the departments, especially the production department, in order to ensure that units of finished goods are properly accounted for. It also recommends that, for effective cost control to be achieved, proper data collection, analysis and administration is essential at all levels of the business.