Identifying the internal environment components critical to realizing the planned performance of Micro-Finance Institutions in Uganda

Abstract

The nature of a firm’s internal environment is known to be a major determinant of its performance. It is, however, not always clear which components of this environment are critical and therefore need more managerial attention if a firm is to realize its planned performance. Consequently, this article focuses on establishing these components for micro-finance institutions in Uganda. The article has been compiled from a study conducted empirically about the massive closure of these institutions which caused government and client concern, as explained by their management. Concisely, the findings indicate that the components that critically affect the realization of the planned performance of a micro-finance institution in Uganda include the ethical orientation of institutions’ managers, the nature of the relationship that the managers keep with their subordinates, and the level of authority given to employees to execute assigned responsibilities. All these components relate to the quality of the institutions’ internal supervision, implying that if the institutions are to realize their performance as planned, their management has to ensure that their internal supervision is of the best possible quality.