Strategy process in manufacturing SMEs (Small Medium Enterprises)

Ates, Aylin (2008) Strategy process in manufacturing SMEs (Small Medium Enterprises). PhD thesis, University Of Strathclyde.

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    Strategy process has been widely publicised during the last three decades, but what has been accomplished by strategy management literature in manufacturing small to medium sized enterprises (SMEs)? The application of strategy management in manufacturing SME practices can be seen as posing particular challenges. It is argued in literature that there is a need to understand whether and how managers in manufacturing SMEs have taken up the language and practice of planning, strategic analysis and execution. This research suggests a process and activity based approach to look at the practice of strategy management in SMEs in order to tackle this challenge. This exploratory study based on four comprehensive case studies investigates the strategy stories via exploring key strategic initiatives and activities, how they link together and which strategy tools, methods and techniques are used. This research concludes that a process based approach is useful and valid to understand strategy in SMEs because this view decomposes the process phases into activities which managers are more comfortable to talk through. However, we need to understand SME managers' language around strategising. There is an indication that if we change the language of SME managers, the findings of this study would map onto main stream strategy management theory clearly. It is found that the dynamics of the manufacturing SME strategy process have both emergent and planned dimensions. SME managers execute the strategy process mainly from an informal fashion by holding multiple functions and with limited application of strategy management methods and techniques. At an activity level, SMEs seem to be putting more emphasis on external environmental scanning (customers, suppliers, competitors, universities and lenders) and defining grand strategy and goals. This implies that SME strategy process is characterised by market based orientation, opportunity seeking and strategic awareness rather than resources or core competencies/ capabilities. Although this study's findings may be criticised because they are grounded on four companies, robust dimensions and insights into dynamics of the strategy process in manufacturing SMEs are achieved through saturation among emergent themes in data.

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