Abstract
The increasingly dynamic market conditions and competition among companies encourage business owners, including small and medium enterprises (SME) owners in Indonesia and in other countries to understand how SMEs can be maintained or enhanced their marketing and financial performances. In order to compete, strategic and policy management experts encourage companies, including SME to apply strategic management practices. This study aims to measure how strong the effect of the implementation of strategic management practices on the performance of SMEs in Makassar, Indonesia especially the performance associated with sales turnover, break even point (BEP), and profit. This research uses quantitative data with primary data source through interview process and questionnaire. The interview process was conducted with the head of the small and medium enterprises (SME) in Makassar, whereas questionnaires were distributed directly to 178 respondents by the survey officer. Of the 178 questionnaires distributed to the respondents, 158 of them (88.76%) were eligible to be processed and analyzed. The results show that the strategic management practices such as strategic planning, strategic execution, and strategic evaluation have a positive and significant impact on sales volume, BEP achievement, and profits of SMEs, especially in medium-sized of enterprises. But the level of education does not serve as an important factor in moderating these strategic management practices against sales volume, BEP and profits. The study also shows that the determination of mission and strategic formulation (part of strategic management practices) have no significant effect on sales volume, BEP and profit. The results of this research are expected to contribute both to the academic community and to business actors, especially managers and/or owners of SME in Makassar. Another practical contribution is to provide inputs to policy makers such as Department of Cooperative and SME in Makassar, in order to develop the quality of SME to remain competitive and still exist in an increasingly dynamic and more competitive market.
Highlights
As business competition is tighter and market conditions is more dynamic, many small and medium enterprises (SME) in Indonesia and in other countries develop their efforts to understand how SME can maintain or improve their marketing and financial performances
The results of previous research indicate that the relationship between the strategic management practices and corporate performances was inconsistent
The interview process was conducted with the head of cooperative and small and medium enterprises (SME) of Makassar
Summary
As business competition is tighter and market conditions is more dynamic, many small and medium enterprises (SME) in Indonesia and in other countries develop their efforts to understand how SME can maintain or improve their marketing and financial performances. In order to be able to compete, some strategic and policy management experts have encouraged companies to implement strategic management practices. There is still an unresolved debate over the effect of strategic management practices on corporate performance. The results of previous research indicate that the relationship between the strategic management practices and corporate performances was inconsistent. Until now, there is still a research gap in regard to the effect of strategic management practices on business performance
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