Evaluation of small and medium-sized enterprises' performance in the built environment

South Africa's SMMEs are characterized by, among other challenges, poor management, poor entrepreneurial performance and low global competitiveness. The Global Entrepreneurial Monitor (GEM) reported that South Africa ranks low in terms of global competitiveness. This study evaluated the management performance of small, micro- and medium-sized enterprises (SMMEs) in the South African building construction industry, the third largest employer in South Africa. The main research aim was to find the reasons for the poor management performance of the building construction industry SMMEs and to make recommendations to improve the management performance of these SMMEs. International management performance models were analysed to select an appropriate model to evaluate the respondents' management performance. The South African Excellence Model (SAEM) was deemed the most appropriate and was selected and used as research instrument. The researcher selected an evaluative, comparative design for the study. A two-part questionnaire was used for data collection. “Part 1” questionnaire profiled the sampled SMMEs to identify independent variables that influenced their management performance. The self-assessment performance measurement questionnaire (“Part 2” questionnaire) evaluated their management performance. The results of the study were twofold. Firstly, the mean-ranking results that ranked the eleven management performance criteria were tested for equality. Management performance criteria that showed low mean ranks were reasons for the respondents' poor management performance. Secondly, independence tests identified the factors that influenced the SMMEs' management performance. The greatest deficiency in terms of management performance was lack of social responsibility amongst SMMEs. The second largest deficiency occurred at business processes, followed by the planning and strategy, people management, and people satisfaction criteria. The most sufficient criterion was customer satisfaction, followed by leadership, customer and market focus, resources and information management and lastly supplier and partnership performance criteria. Hypothesized reasons for the respondents' poor management performance were tested statistically. Of the five independent variables tested to determine whether they significantly improved the respondents' management performance, education and technical skills training significantly improved the management performance. Age, gender and race of owner-managers, however, did not. The study recommends strengthening the SACEM by introducing financial management criteria and bench marking SMMEs' management performance with industry and world-class best practice. The study found that management performance criteria that showed low scores (social responsibility, business processes, and planning and strategy) require urgent intervention.