Micro-politics and strategy formation in SMEs

Abstract

This paper aims to examine the strategy formation process in SMEs with reference to the impact of the micro-politics of ownership and control. Based on 34 semi-structured, in-depth interviews with senior managers from nine small firms during the course of three years, this article examines issues of ownership and control and the resulting punctuation upon strategy formation processes that occurs when these issues are in disequilibrium. The paper begins to redress the imbalance in the literature that has neglected the impact of micro-politics in SMEs’ strategy formation processes. The authors then argue that – during periods when power positions are evolving – a key factor is the duration for the power structure to settle. Whilst accepting that these shifts are inevitable in organisations, an extended period of redistribution of power – and the politics associated with that – can cause strategic drift.