The significance of corporate governance in small and medium enterprises in Zimbabwe: A study of Magaba smes industry in Mbare, Harare

Abstract

The study titled ‘The significance of corporate governance in Small and Medium Enterprises in Zimbabwe: A study of Magaba SMEs Industry in Mbare, Harare’ was undertaken after a realisation that SMEs were experiencing corporate governance shortcomings a situation that was affecting their survival and sustainability. The study sought to establish how key corporate governance aspects namely; the educational background for SMEs, owner-manager set up, internals control and succession planning were affecting the sustainability of SMEs. The research further sought to identify ways or a framework that SMEs can employ in order to enhance their chances of survival. The descriptive survey design was used on the selected sample of SMEs in the study area. The dependability of the findings was enhanced by the triangulation of information from sources such as questionnaires and interviews. In order to avoid bias, the researcher used simple random sampling procedure to pick the SMEs who were part of the study sample while purposive sampling was used to select leading SMEs who have operated in the area for a long time. The collected data was presented in the form of tables, graphs and pie charts. These presentation procedures were accompanied by a brief descriptive interpretation and analysis of the information presented. This was done in order to make correct and reliable conclusions which were used as a basis for the recommendations. The study found out that SMEs in Magaba Industry did not have good and relevant educational backgrounds to run their business as well as to understand the significance of corporate governance in business. The research further found that SMEs in the study area did not have effective internal controls to curb avoidable losses through crimes like thefts and fraud. Regarding succession planning, the study found out that SMEs did not have succession plans which are necessary for their survival beyond the present management. Against these findings, the study recommended that SMEs must improve their educational backgrounds and introduce effective internal controls and succession plans for their businesses for sustainability to improve. It was further recommended that government should emphasise the Education 5.0 policy in secondary education so that entrepreneurial skills are cultivated in learners at an early stage.