Linking sales performance to corporate governance in SMEs and family businesses in the Middle East : the case of an electric products distributor in Lebanon

Abstract

Faced with economic turmoil, SMEs in Lebanon are suffering from low sales and lower profits. This research is intended to explore the direct relationship between Corporate Governance and Sales Performance in the corporate world in general and in family businesses in particular. It proposed that good corporate governance leads to better sales performance. The researcher applied the Socio-Economic Approach to Management (SEAM) methodology to link Corporate Governance, Strategic Planning and Sales Performance all together, and come up with a generic model for enhancing corporate sales. This intervention research is conducted in a private family-run lighting and electrical products distribution company in Lebanon. The success of this methodology lies in its intention to achieve an integral transformational change in the related organization. SEAM principles, concepts, and tools facilitated identifying dysfunctions, revealing hidden costs, exploiting untapped potential and most importantly setting a strategic plan in the aim of drawing a roadmap to improving sales through sound corporate governance, strategic thinking and vision alignment. Deep and thorough multi-level diagnoses and various SEAM Tools lead to setting up several Project Groups to solve dysfunctions, convert hidden costs into added value, invest in human potential, and prove a direct link between Corporate Governance and Sales Performance by way of Strategic Planning, which is the main function of any corporate Board of Directors, a main constituency of Corporate Governance.