The Effect of Budgetary Control on Organisational Performance in Small and Medium Enterprises (SME) in Somalia

Abstract

Background: Emphasising the significance of organisational performance in Somali SMEs, this study highlights the crucial role of budgetary control in boosting their business operations. It emphasises the need for proficient budget planning, monitoring, and evaluation to enhance these enterprises' operational efficiency and strategic decision-making, particularly in a challenging economic and institutional environment. Purpose: This study aims to investigate the impact of budgetary control on the organisational performance of Small and Medium Enterprises (SMEs) in Somalia. Specifically, it assesses how budget planning, monitoring, and evaluation influence the operational effectiveness of these enterprises in a challenging economic environment. Methodology: The study employed a quantitative research design to analyse the impact of budgetary control on SMEs in Somalia, utilising structured online questionnaires for data collection. A sample size of 375 SMEs from Mogadishu was determined using the Slovene formula, and the data were analysed using the Statistical Package for Social Scientists (SPSS), focusing on descriptive statistical techniques. The analysis included measuring central tendency and dispersion of variables, such as budget planning, monitoring, evaluation, and organisational performance, to establish correlations and assess the hypotheses. Social and Practical Implications: The implications of this study suggest that robust budgetary control practices in SMEs can significantly contribute to Somalia's economic development and stability by enhancing organisational efficiency and decision-making in a challenging business environment.