Small and Medium Enterprises (SMEs) are a vibrant component in economic growth in countries all over the globe Even though they contribute expressively to economic expansion, they are disposed to poor enactment and ultimately fail due to lack of proper planning. As such, the research seeks in investigating the strategic planning scope and the perceived worth of a strategic plan by SMEs. Also, aims to examine factors impeding SMEs from partaking indecisive planning actions in pursuit of their goals.
Extant literature specifies that there is no universal definition of SMEs, as description varies and grounds on the countries’ specific understanding (Bryson 2018, p78).
Strategic planning is a procedure of coordinating undertakings to accomplish the set long-term objectives of the organization. It is defined as tapping together an accomplishment plan for administering the business and piloting various functions (Akhtar, Azeem & Mir 2014, p69). The authors go further and elaborate that shaping a strategy signifies a commitment to chase a particular set of actions aimed at developing that specific business. This includes mutual efforts in attracting and pleasing customers, compete effectively and conducting processes in a way to improve the corporation’s financial enactment.
The literature is extended on SMEs by exploring strategic planning in the zone that is another issue that affects SMEs performance. The study may also be of assistance to SMEs ever since it investigates features of the planning process and the prominence of strategic planning that ought to include incorporation in improvement on the strategic planning activities, hence turning valuable to SME owner/managers (Bryson, Edwards, & Van Slyke 2018, p389).
Key terms
Strategic planning- It is an organization’s procedure of defining its policy, or direction, and making decisions on apportioning its resources to tail the strategy hence goals achievements.
Small? to medium?sized enterprises- They are businesses whose workers numbers fall beneath certain limits as prescribed (Van Slyke et al. 2018).
Parent companies- A parent company is a business that owns enough elective stock in another firm to control managing and operation by doing and manipulating or electing its executive board.
Strengths of the study
Exploration in SMEs strategic planning is not comprehensive in most developing countries Great literature on SMEs emphases on factors that donate to SME endurance such as financing, rather than a better understanding of the development process and the accomplishment of justifiable competitive advantage. As such, the study pursues in investigating strategic planning range by SMEs and whether the feature is one of the foremost contributors to the poor recital or death of most SMEs. According to (Gjini 2014, p261) several pieces of research highlight that the field of a small commercial is adjacent to entrepreneurship, as at later recognizes the significance of the manager, who is very often the business holder/owner. The simplification of these studies is restricted as owner-manager physiognomies vary from one business to another. Looking into an owner-managers part in strategic planning as well as bearing in mind other issues affecting strategy formulation will assist in better understanding the concept, which is what the review is incorporating (Sirén & Kohtamäki 2016, p543).
Some reviews concentrate on specific commerce sectors that decrease the potential to descend generalizable implications. It is incredibly likely that the replies are influenced by the industry type a particular SME is operating from. As to curb that limitation, this literature review considers a multi-sectoral method which anticipated to be helpful to SMEs transversely all industries as they can assess and apply the results as a self-monitoring device to improve on their shortages. For instance, Strategic managing in a construction production tends driven by different features that are absent in the facility or manufacturing industry among others.
Study limitation
The study limitation is that there existed uncooperative managers who viewed that the research was baseless as it goes into investigating their business operations. Most managers tend to hide their business information as with fear of the data transferred to their competitors in the market (Hill, Jones & Schilling 2014, p90). Data sharing is discouraged in business as competitors can partake it and take advantage of the firm’s weaknesses hence gaining a competitive advantage. However, some respondents were active and participated effectively.
Reputation theory
According to (Carroll 2015, p76) reputation theory suggests that management of the risks has turned out to be a major preoccupation for productions in every subdivision. A corporation with a good standing is regarded as dependable, credible, consistent, and responsible for clients, employees, stockholders and financial markets. On the other hand, lousy reputation results in clients’ loss, uninterested employees, shareholder displeasure and ultimately business demise itself. Business reputation tends identification as the most important midst the intangible resources hence considered as the most fundamental strategic competence of the entire organization (Wolf & Floyd 2017, p1777).
The theory is drawn on the basis that reputation constituents be weighted by verdict makers and be utilized as the base of decision making and assimilated into shaping managerial change in the struggle of formulating a corporate policy. The creation and upkeep of corporate reputation denote directly to organizational planned choices and strategic organization viewpoints.
Reputation theory is therefore significant in explaining the range that firms engage in strategic planning accomplishments. It may be anticipated that firms which desire an excellent reputation and sight it as a strategic capability that helps the business in staying on a competitive edge would engage in extensive and formal planning (Haines 2016, p654).
Resource-Based Theory
The theory is under strategic planning where it aspects that firs are resources and capabilities bundles. These possessions and capabilities comprise of physical, human, financial and elusive resources. The theory is acclimatized on the point that resources are not standardized and are narrow in the aspect of mobility. According (Akinboade 2015, p65) the firm can interpret these resources and competencies into strategic benefits if they are appreciated, rare, unmatched and most important the firm is organized in the exploitation of the resources. The theory assists SMEs in surviving to the changing market strategies. Markets tend to change on daily service out of technology advances in the universe hence firms should in place ensure they are also evolving in their operations. Strategic plans as per the resource base theory tend enhancement by providing that resources are improved permitting smooth functions of all subdivisions of the organization (Kozlenkova, Samaha & Palmatier 2014, p13).
Conclusion
The research study has explained the strategic measures SMEs partakes in their daily operations to enhance goals achievements, hence believe the purpose of the literature review was met. Fortunately, the study findings are in accord with results from other partaken studies that state strategic planning struggles are present among SMEs but to a limited notch (Moen & Rialp-Criado 2018, p876). It may be settled that SMEs tend to have the mission and vision and long-term goals documented in their outlines just for decorum or trend following in their operations. The influence of these components on the daily business functions is overlooked (Tarut? & Gatautis 2014, p1222). The mission, vision, and goals set out a business’s long-term goals and ambitions clearly and concisely and may be utilized in inspiration and motivating the company’s staff through provision a picture of where the organization is moving to and from a vital strategic management process fragment.
Reputation management theory operates in ensuring that a firm’s drive, values, objectives are reflected in their strategies and activities to provide achievements of the participants’ expectations. Consequently, the results of the review suggest that most SMEs are not reputation mindful, as most of them lack formal approaches in place and those that employ lack incorporation on their daily activities (Amin, Thurasamy, Aldakhil & Kaswuri 2016, p45).
References
Akinboade, O. A. (2015). Determinants of SMEs growth and performance in Cameroon’s central and littoral provinces’ manufacturing and retail sectors. African Journal of Economic and Management Studies, 6(2), 183-196.
Akhtar, N., Azeem, S. M., & Mir, G. M. (2014). Strategic Role of Internet in Smes Growth Strategies. International Journal of Business Management & Economic Research, 5(2), 67-69.
Amin, M., Thurasamy, R., Aldakhil, A. M., & Kaswuri, A. H. B. (2016). The effect of market orientation as a mediating variable in the relationship between entrepreneurial orientation and SMEs performance. Nankai Business Review International, 7(1), 39-59.
Booth, D. (2016). Strategy Journeys: A Guide to Effective Strategic Planning. Routledge.
Bryson, J. M. (2018). Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement. John Wiley & Sons.
Bryson, J. M., Edwards, L. H., & Van Slyke, D. M. (2018). Getting strategic about strategic planning research, 321-400.
Carroll, C. E. (Ed.). (2015). The handbook of communication and corporate reputation (Vol. 49). John Wiley & Sons.
Gjini, K. (2014). Small and medium sized entreprises; growth factors. European Scientific Journal, ESJ, 10(7), 234-265.
Haines, S. (2016). The systems thinking approach to strategic planning and management. CRC Press.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.
Kozlenkova, I. V., Samaha, S. A., & Palmatier, R. W. (2014). Resource-based theory in marketing. Journal of the Academy of Marketing Science, 42(1), 1-21.
Moen, Ø., & Rialp-Criado, A. (2018). European SMEs and the Born Global concept Norwegian University of Science and Technology, Norway and Universitat Autònoma Barcelona, Spain. In The Routledge Companion to European Business (pp. 99-110). Routledge.
Sirén, C., & Kohtamäki, M. (2016). Stretching strategic learning to the limit: The interaction between strategic planning and learning. Journal of Business Research, 69(2), 653-663.
Tarut?, A., & Gatautis, R. (2014). ICT impact on SMEs performance. Procedia-Social and Behavioral Sciences, 110(0), 1218-1225.
Wamba, S. F., & Carter, L. (2016). Social media tools adoption and use by SMEs: An empirical study. In Social media and Networking: Concepts, methodologies, tools, and applications (pp. 791-806). IGI Global.
Wolf, C., & Floyd, S. W. (2017). Strategic planning research: Toward a theory-driven agenda. Journal of Management, 43(6), 1754-1788.
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