Analyzing the impact of strategic management practices on performance of Small to Medium Enterprises (SMEs).

Abstract

Purpose – Drawing on the Resource-based view of the firm (RBV), the study sought to
analyze the impact of strategic management practices on the performance of SMEs.
Strategic management practices included environmental scanning, strategy
formulation, implementation, and strategy evaluation and control. On the other hand,
firm performance was measured using the sales and profits of the business as viewed
by the respondents. Design/methodology/approach –A survey design was used to
collect data from a sample of 240 small business operators in Masvingo using a 5
point Likert Scale questionnaire and analyzed in IBM SPSS. Guided by the conceptual
framework, a multiple linear regression model was developed to test the relationship
among the variables. Findings – Environmental scanning, strategy formulation,
implementation, evaluation and control had significant positive impact on firm
performance. The study concluded that firms that scan the environment, formulate,
implement, and evaluate and control their strategic management plans are more likely
to succeed than those that do not. Practical implications – Highly volatile
environments like Zimbabwe requires business operators to be sensitive to the dictates
of both the internal and external environment using the available resources. Managers
should devote their resources towards the achievement of both short term and long
term plans as enshrined in the vision and mission statements. Corrective action should
always be taken by management and staff to align the reality with the desired strategic
plans. Originality/value/contribution – This study added to the existing knowledge
through replication, why strategic management plans are important.