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Although small and medium-sized enterprises (SMEs) usually employ majority of the labour force of an economy, there is an insufficient business-related knowledge base that SMEs management possess (Beaver, 2003). Indeed, formal plans or cost controls are often only provided on an irregular basis and planning instruments are usually only used by a small number of individuals and developed rather intuitively (Brinkmann, 2002). These deficiencies point towards the significance of examining the value of strategic management for SMEs in more detail.
Globally, academicians and practitioners have called for increased use of the strategic planning in SMEs, as the role of strategic planning in large companies and the conception that decisions-making triumphs in enterprises regardless of size have been advocated for. In this sense, many empirical studies point out a link between strategic planning and performance (Bracker et al., 1988).
According to Gibson and Cassar (2002), large companies are more successful than SMEs because the large companies plan strategically. Strategic management is viewed as the set of decisions and actions that result in the formulation, implementation and control of plans designed to achieve an organisations vision, mission, strategy and strategic objectives within the business environment in which it operates (Pearce & Robinson, 2005). Strategy plan implementation is an integral component of the strategic management process and is viewed as the process that turns the formulated strategy into a series of actions and then results to ensure that the vision, mission, strategy, and strategic objectives of the organisation are successfully achieved as planned (Thompson & Strickland, 2003).
Strategic management can be defined in various ways. According to Wheelen and Hungers‘ study (2006), strategic management is a set of managerial decisions and actions that determines the long-term performance of a corporation. It involves environmental scanning (both external and internal), strategy formulation (strategic or long range planning), strategy implementation, and evaluation and control. They emphasize the analysing and evaluating of external opportunities and threats in terms of an organization‘s strengths and weaknesses (Wheelen and Hunger, 2006). From the perspective of Dess and Miller (1993), strategic management is a process that combines three major interrelated activities: strategic analysis, strategy formulation and strategy implementation.
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