Adequacy of project based financial management systems of small and medium construction enterprises in Botswana

The thesis documents findings of a study conducted to develop a project based financial management system (PBFMS) whose rolewas viewed as a contributor to the successful delivery of projects leading to improved financial performance of small and medium construction enterprise (SMCEs). In particular, the PBFMS was viewed as a facilitator {function) for the efficient and effective conduction of the strategic management, project planning and control processes. Thus an adequate PBFMS was seen as one which, facilitates the efficient and effective delivery of projects with a view to provide enhanced enterprise performance. In pursuit of this aim, theory and practices relating to the development, operation and use of a PBFMS were investigated and analysed from both literature and field work leading to findings being reported in the thesis. In addition, the actual financial management systems of SMCEs were investigated to determine the extent to which their attributes match those of the proposed PBFMS model.The motivation for embarking on the study was brought about by three aspects observed in Botswana. Firstly, was the frequently documented poor delivery of projects, that is, for a sustained period of time, projects were being delivered beyond stipulated times, above agreed cost, and below specified quality. In some worst scenarios, projects were being abandoned at various stages execution but before completion. Secondly, the investigation was also prompted by the frequent financial failures of enterprises that were being recorded in the construction industry. Thirdly, the conduct of the proprietors of the construction enterprises was also frequently circumspect, particularly in matters relating to financial management.Thus in pursuing the study, a number of premises were made. Firstly, the financial management systems of the SMCEs were considered inadequate to fulfil their functions, that is, they were incapable of facilitating the strategic management, project planning and control process. It was also speculated that management of SMCEs were not committed to the PBFMS i.e. they did not participate, get involved and did not comply with the policies regarding the planning, developing, and operation of financial management systems. As a result, PBFMS were unable to play their role of facilitating to the successful delivery of projects for improved contribution to the financial performance of SMCEs. The second premise was that financial models available are either too generic to guide SMCEs in financial management matters or the strategic component is not linked to the operational plans to execute the strategy. For those which are meant for construction enterprises, they normally prescribe practices for project planning and control without including the strategic element and vice versa. In essence there is a gap in each of the models available for use by the SMCEs. It is the closing of this perceived gap in knowledge that the results of the thesis contribute in finding a solution to the mentioned problem. Thus the study aimed at answering two research questions: (i) Do SMCEs have adequate PBFMS that facilitate the effective delivery of projects for enhanced financial performance?and (ii)Is there a relationship between the adequacy PBFMS and poor performance of SMCEs?To facilitate the answering of these two question two hypothesis were formulated namely: Ho1: The PBFMS of SMCEs are adequate to facilitate the delivery of projects;