Abstract
<p>Small and medium enterprises (SMEs) are faced will many challenges, and the development of a sound strategy for the SME could define how these challenges are met which, in turn, could mean the difference between success or failure of the enterprise. If a sound strategy is major contributing factor to the success of a small business, but the evidence of sound strategic management (as taught in universities and business schools) is not present in successful SME’s, one could question the way strategic management is conceptualised. The study thus aims to gather a greater understanding of strategic management – and strategy formulation practices in particular – within SME’s. The study employed a qualitative, descriptive design with semi-structured interviews conducted with 12 SME owners in Gauteng. Findings reveal that the majority of participants were in favour of and supported the notion of having a strategy for small and medium enterprises, but none of them made reference to a formal process regarding strategy formation.</p><p><strong>Key words:</strong> Strategy; strategy formulation, small and medium businesses; planning; qualitative research</p>
Highlights
Small and medium enterprises are the end result of the entrepreneurial endeavour
Review of the link between planning and performance (Kraus, et al, 2006), reveals that despite various studies, there are many inconsistencies in the findings of previous research. They explore possible reasons, including the differing definitions of strategic planning and that the analyses focused on varying aspects of strategic planning
For qualitative research to be deemed of good quality, trustworthiness needs to be considered in terms of four criteria (Lincoln & Guba, 1985):
Summary
Small and medium enterprises are the end result of the entrepreneurial endeavour. O’Regan and Ghobadian, (2004b) depict small and medium enterprises (SME’s) as the “bloodline of modern complex economies”, as the establishment and longevity of SME’s are a sign of a healthy and expanding economy. This study intends to establish if SME’s: conduct any strategy formulation exercises at all, and whether these practices follow conventions purported in contemporary academic literature within the realm of strategic management. The outcome of Frese, et al’s (2000) research established that the process characteristics of strategies for SMEs are related to their success, as these are a direct result of the actions of the owner/manager Those owners who concentrate on the most important or difficult component of the business, will perform better than those who do not. Babbie and Mouton (2004) describe an ethnographic study as producing findings derived from collecting data on the behaviour of (and in) a particular society In this instance, SME owner/managers possess their own, unique identity which provides the opportunity to view the formulation of strategy from a different perspective.
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