An Explorative Survey in the Implementation of Good SMES Governance on Small Business Entity

Fazli Syam BZ


Objective – This study aims to explain and predict about the implementation of good governance on small business entities as a key performance indicator. Implementation of good governance is needed and becomes important for small business entities to be able to develop and still exist in business environments.

Design/methodology – This study was designed with field study research approach oriented explorative study with a combination of primary and secondary data. This research proposed two precision, namely: First, an understanding of small business entities on the principles of SMEs governance is positively associated with perceptions of small business entities about the importance of implementing good governance in business activities. Second, the perception on the implementation of good governance is positively associated with the performance of small business entities.


Results – The results showed that the understanding of small business entities are positively related to perceptions of the importance of implementing good governance, but not positively related to the performance of small business entities. This means that the constraints and obstacles faced by small business entities in the application and implementation of good governance is more due to the principles of SMEs governance do not have a positive and significant relationship with the performance of small business entities.

Research limitations/implications – For further research is needed to add more small business entities as respondents, particularly small business entity that has the legality (listed in the government and/or have a business license.) Necessary to reexamine the instrument that has been used to make some adjustments such as set back a list of questions compiled by Credit Lyonnais Securities Asia (CLSA) to make some adjustments in accordance with the needs of small business entities. Further research is recommended to use the same method or using other research methods in the test results, such as using Discriminate Analysis.

Keywords Good SMEs Governance, Key Performance Indicators, CG Indicators, Small  Business Entity


Full Text:



Abor. Joshua & Adjasi. Charles. K.D., (2007). SMEs governance and the small and medium enterprises sector: theory and implications. Journal SMEs Governance, Vol. 7, No. 2, pp. 111-122.

APEC, 1999. The APEC survey on small and medium enterprise, Singapore: APEC Secretariat.

Carrier, C. (1994. Intrapreneurship in large firms and SMEs: A comparative study. International Small Business Journal, 12(3), 54-61.

Carson, D. (1990). Some exploratory model for assessing small firm’s marketing performance (a qualitative approach). European Journal of Marketing 24(11), 1-51.

Cross, M. (1983). Small Firms in the United Kingdom in D. J. Storey (eds) The Small Firm: an international survey, Croon-Helm, London.

Davis, C.D., Hills, G.E., & Laforge. R.W. (1985). The marketing/small enterprise paradox: a research Agenda. International small business journal, 3(3), 31-41.

Hari Wijanto. Setyo. (2008)., Struktural Equation Modeling Dengan Lisrel 8.8., Graha Ilmu.

Hodgetts, R. M., Kuratko, D. F., & Hornsby, J. S. (1999). Quality implementation in small business: Perfectives from the Baldrige award winners. SAM Advanced Management Journal, 64(1), 37-47.

Holmes, S. (2001). Definition of Small Business, final report for the small business coalition, Australia.

Hooley, R., & Ahmad, M. (1990). Small medium size enterprise and the development process in four Asian countries, Manila: Asian Development Bank, 5-63.

Institut Akuntan Publik Indonesia – IAPI, (2008), PanduanAudit Entitas Bisnis Kecil, Penerbit Salemba Empat.

Jones, J. P. (1995), The effect of market orientation on small business performance. Nova Southeatstern University, Ft. Lauderdale.

Kwon, Y.C., & Hu, Y. (2000). Market orientation among small Korean exporters. International Business Reviews, 9(1), 61-75.

Kusyik., Sophia Maria. & Lozano Josep.A., (2007). SMEs responsibility in small and medium-sized enterprises SME social performance: a four typology of key drivers and barriers on social issues and their implications for stakeholder theory, Journal SMEs Governance, Vol. 7, No., 4, pp. 502-515.

Little, I. M. D. (1988). Small manufacturing enterprise and employment in developing countries. Asian Development Review, 1-9.

Lu, J. W., & Beamis, B. W. (2001). The internationalization and performance of SMEs. Strategic Management journal, 22, 565-586.

Matsuno, K., & Mentzer, J. T. (2000). The effect of strategy type on the market orientation-performance relationship. Journal of Marketing, October, 1-16.

Matsuno, K., Mentzer, J. T., & Ozsomer, A. (2002). The effect of entrepreneurial proclivity and Market Orientation on Business Performance. Journal of Marketing, 66, July, pp. 18-32.

Mazzarol, T., & Ramaseshan, B. (1996). Small business marketing: A comparative study of high and low success firms. Small Enterprise Research, 4(3), 50-64.

Murphy, G.B., Trailer, J.W., & Hill, R.C. (1996). Measuring Performance in Entrepreneurship Research. Journal of Business Research, 36, 15-23.

Price Water House Coopers (2005), SMEs Governance Toolkit for small and medium enterprises, 2nd Edition, CPA Australia.

Satao, Y. (1996). Work organization and job quality of SME in Japan. Paper presented at SMEs development, innovation and growth, the washington workshop, OECD.

Singh, Rajesh Kr., Suresh Kr Garg., S G Deshmukh. (2007), Comparative Study on Strategies of Indian Small, Medium and Large Scale Organizations, South Asian Journal of Management, Jul-Sep, 14,3, pp. 44-65.

Strikwerda., j. (2003), An entrepreneurial model of SMEs governance: devolving powers to subsidiary boards., Journal SMEs Governance, Vol. 3, No. 2, pp. 38-57.

Swierczek, F. W., & Ha, T. T. (2003) Entrepreneurial orientation, uncertainty avoidance and firm performance: an analysis of Thai and Vietnamese SMEs. International Journal of Entrepreneurship and Innovation, 4(1), 46-58 .

Tabachnick, B. G., & Fidell, L. S. (1996). Using multivariate statistics. 3rd (eds). New York: Harper Collins.

Tambunan, T. (1994). The role of small scale industries in rural economic development: A case study in Ciomas subsdistrict, Bogor, West Java, Indonesia. PHD. Dissertation, Data Koninkliijke Bibliotheek, Den Haag.

Tambunan, T. (2009). UMKM Di Indonesia, Penerbit Ghalia Indonesia.

Tate, C. E., Megginson, L. C., Scott, C. R., & Trueblood, I, R. (1975). Successful Small Business Management, Business Publication Inc., 3-14.

Torgler. Benno., (2006). The Importance of Faith: Tax Morale and Religiosity. Journal of Economic Behavior & Organization. Vol. 61, pp. 81-109.

Tzokas, N., Carter, S., & Kyriazopoulos, P. (2001). Marketing and entreprenurial orientation in small firms. Enterprise and Innovation Studies, 2(1), 19-33

Urata, (2001, Desember 14), Pembiayaan Usaha Kecil Menengah, bermasalah sejak definisi, Kompas, 39.

Van Bruggen, G., & Smidts, A. (1995). The measurement of market orientation: a promising tool for management?. Prooceeding CEMS Academic Conference, April, Vienna.

Van Der Post, W. Z., DeConing, T.J. et al (1997). An Instrument to measure Organization culture. South African Journal of Business Management, 28(4).

Van Dierman , P. (1995). Systems of Enterprises: A Study of Small-Scale Garment and Wood Furniture Enterprises in Jakart., PhD Dissertation, The Australian National University.

Venkatesan, V., & Soutar, G.(2000). The applicability of some market orientation models to Australian SMEs: An empirical study. Pages 1314-1318, Queensland, Australia. ANZMAC (Griffith University, Queensland).

Zainudin, D., Nasution, M., & Bain, I. (1990). The role of small and medium scale industries in industrial development. Asian Development Bank, 257-312.

Zemmerer, Thomas W., Norman M. Scarborough, Doug Wilson, (2008), Essensial of Entrepreneurship and Small Business Management (Terjemahan), Ed. 5, Bk. 1, Penerbit Salemba Empat.



  • There are currently no refbacks.

Published by:

Accounting Department
Economics and Business Faculty
Syiah Kuala University
Kopelma Darussalam, Banda Aceh, Indonesia - 23111
E-ISSN: 2621-1041


Creative Commons License
Journal of Accounting Research, Organization and Economics by Accounting Department of Economics and Business Faculty of Syiah Kuala University is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at