STRATEGY COMPETENCES AND PERFORMANCE MEASUREMENT IN THE HUNGARIAN SMES SECTOR

ABSTRACT. Small and medium-sized enterprises (SME) are potentially the most dynamic sector of the economy. SME represent 99 % of all companies in the EU. They are the biggest sector of the EU economy, with 23 million enterprises employing around 75 million people. These small organizations are responsible for the creation of one in every two new jobs. SME produce considerably more than half the EU's GDP. Their growth is key for the overall economic well-being. The European countries have several programs and measures in place to promote SME growth. But how do they think about their potential and their future? This paper focuses on factors affecting the growth and performance of small and medium enterprises (SMEs). The aim was to identify strategic factors differentiating young and long-lived growth SMEs and find out the coherency with performance. A comparison of the two fields shows an interesting picture in the Hungarian SMEs sector. The results suggest that the organization structure and the applied leadership methods exercise an influence on SME growth strategies. The results increase our understanding of the factors affecting SME growth and performance in two different contexts. This paper draws on survey and interview material, from research with entrepreneurs in small and medium-sized enterprises (SMEs) to examine the process of entrepreneurship and entrepreneurial competences in SMEs. Underlining two main business fields: cost management and performance management. This paper reviews the contribution of cost accounting and strategy thinking, which, it is argued, have been developed for large firms rather than SMEs. More appropriate theories are examined from fields that accepted the impact of uncertainty and dynamics in decision-making, such as performance prism to learning and development. Case study evidence is presented on the nature of entrepreneurial behaviour in growth SMEs and compared with theories in the literature.