Abstract
Strategy formulation has traditionally been associated with large corporates (Damke, Gimenez, & Damke, 2018). The literature on strategy formulation is rich, but this literature does not capture the intricacies of small and medium enterprises (SMEs) in emerging markets (Ahmed & Mukhongo, 2017). The study aims to gain an understanding of strategy formulation practices among the SMEs in emerging markets, particularly Zimbabwe. The philosophy of interpretivism guided the study. The study adopted a qualitative case study strategy in which data collection was conducted through semi-structured interviews with 15 manufacturing SME owners/managers in Harare, Zimbabwe. The results of the study revealed that the majority of participants understand strategy formulation and are greatly involved in strategy formulation. However, the study revealed that strategy formulation is not logically and systematically done thus does not resemble the conventional textbook strategic formulation models. Theoretically, the findings revealed that strategy formulation in SMEs is both an externally (market-based) and internally (resource-based) guided practice. The study advises SMEs to balance professionalism and responsiveness when strategising, that is balancing the process perspective with the learning perspective. The study was conducted in one city; similar studies could be conducted in other parts of the world to find similarities and differences.
Highlights
The need to understand the strategic management processes of small and medium enterprises (SMEs) has been the primary focus for many authors (Conz, Denicolai, & Zucchella, 2017)
The results of this study indicate that strategy formulation amongst SMEs in emerging markets has some similarities with strategy making in many parts of the world (Auka & Langat, 2016 in Nigeria; Majama & Magang, 2017 in Botswana; Melo et al, 2018 in Brazil; Ahmed & Mukhongo, 2017 in Kenya)
The study sought to determine the level of understanding of strategy formulation, the extent of strategy formulation, the theoretical model underpinning the formulation of strategies amongst SMEs, and lastly the nature of strategy formulation in SMEs
Summary
The need to understand the strategic management processes of small and medium enterprises (SMEs) has been the primary focus for many authors (Conz, Denicolai, & Zucchella, 2017). Singh (as cited in Pratiwi, Sutopo, Roni, & Rasli, 2017) define strategy formulation as “the development of the company’s vision, mission, identifying an organisation’s external opportunities and threats, determining internal strengths and weaknesses, establishing long term objectives, generating alternative strategies, and choosing particular strategies to pursue” The study defines strategy formulation as the process of selecting the most appropriate course of action for the attainment of organizational goals and objectives and thereby realising the organizational vision and mission (Auka & Langat, 2016). Literature substantiates that the terms strategic planning, strategy formulation, strategy development, strategy making mean the same thing (Pratiwi et al, 2017; Abosede, Obasan, & Alese, 2016).
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