The status of strategic planning in Small and Medium Enterprises: Priority of afterthought?

Abstract

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.

Key words: Strategy; strategy formulation, small and medium businesses; planning; qualitative research