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    The impact of working capital management dynamics on performance of Tongan enterprises in New Zealand

    Finau, Feletiliki Kefu Manisela

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    Date
    2012
    Citation:
    Finau, F. K. M. (2012). The impact of working capital management dynamics on performance of Tongan enterprises in New Zealand. (Unpublished document submitted in partial fulfilment of the requirements for the degree of Master of Business). Unitec Institute of Technology, Auckland, New Zealand. Retrieved from https://hdl.handle.net/10652/1812
    Permanent link to Research Bank record:
    https://hdl.handle.net/10652/1812
    Abstract
    Several Tongan businesses operate in different business sectors of Small and Medium Enterprises (SMEs) and contribute wealth to New Zealand economy in terms of value creation. For the success of any Tongan enterprise in New Zealand, the financial management of assets is so crucial. Thus, this research focuses only on the Working Capital Management (WCM) of Tongan SMEs in New Zealand and its direct impact on performance that is vital for business survival and sustainability. WCM deals with the administration of the businesses’ short-term current assets and liabilities that is an important issue for Tongan SMEs’ financial decision making. The business financial performance is measured using working capital ratios, profitability ratios via Du Pont financial analysis. The purpose of this study is to explore and analyse the impact of working capital management dynamics on financial performance of Tongan SMEs in New Zealand. It also aims to explore how Tongan SMEs manage their various working capital components such as cash, inventory, account receivables, account payables, operating cycle, and credit policy management. Consequently, this develops an appropriate conceptual framework model to illustrate the impact of WCM dynamics on performance and providing some key recommendations that will improve Tongan SMEs use of working capital management. The primary data was collected from 8 Tongan enterprises and 4 business consultants in Auckland using a qualitative Pacific research method known as “Talanoa Approach (TA)” in the form of semi-structure interviews and a focus-group. The secondary data was captured from a consecutive five years of financial statements of a selected enterprise as a case study. Furthermore the introduction of a Computer Analysis and Qualitative Data Analysis Software (CAQDAS) of NVivo9 articulates and enhances the thematic coding, analysing and conceptualising model in the light of Talanoa Theory (TT) from the collective data. This study concluded by extending the exploratory Pacific research methodology of Talanoa (T) as a default of qualitative research in financial management context. The Talanoa approach was used for data collection and analysis simultaneously. The Tongan SMEs operating in Auckland have been divided into two groups according to the business models they use. Some of them follow the ‘Western Conventional Model’ and some follow the ‘WC Flexible System’ model of managing their ‘working capital’ which impacts on financial performance.
    Keywords:
    small and medium-sized enterprises (SMEs), working capital management, Western Conventional Model, WC Flexible System, financial performance, Tongan businesses, talanoa (traditional method of face-to-face conversations)
    ANZSRC Field of Research:
    150314 Small Business Management
    Degree:
    Master of Business
    Supervisors:
    Mitchell, Helen; Slessor, Andrew
    Rights:
    This digital work is protected by copyright. It may be consulted by you, provided you comply with the provisions of the Act and the following conditions of use: Any use you make of these documents or images must be for research or private study purposes only, and you may not make them available to any other person. You will recognise the author's and publishers rights and give due acknowledgement where appropriate.
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