An Exploratory Study on Strategic Planning and Management Processes in SMES in Edinburgh and East Lothian
Background The importance of SMEs in the UK economy is increasing as they contribute to GDP growth and create additional employment possibilities. However, as the external market competition is increasing in today’s international business environment, gaining competitive advantage is more complex than ever for organizations. Strategic management is an essential tool for top-level management of a firm to monitor and control internal and external factors that are changing. Aim The aim of this dissertation was to explore how strategic management and planning was applied in SMEs in Edinburgh and East Lothian, and investigate what the distinctive characteristics and features were, in the context of strategic management processes in these SMEs. Methods The study adopted a quantitative research approach by the use of an online questionnaire. To ensure that the findings of this research were credible, a large number of responses were required in a short amount of time. Two separate questionnaires were handed out; one targeted to managers and owners of SMEs; whilst the other targeted to employees that had experience of working in a smaller firm. In total, 17 SMEs and a total of 37 responses were collected, which represented a 47.2 percent response rate. Results The results indicated that the majority of top-level management within the studied SMEs, perceived strategic management and planning as essential tools for developing good business strategies. A significant amount of the studied SMEs did adopt strategic management activities. The results also indicated that business planning was very exclusive to top-level management and employee participation was non-existent. Thus, the encouragement of basic level employees’ participation in strategic planning processes in SMEs to aid performance was absent. Strategic planning efforts do occur within the studied SMEs, however, only to a limited degree as several barriers contribute to the lack of planning practices. Conclusion The studied SMEs perceive strategic management and planning as essential tools for the effective development of business strategies; though employee participation in planning activities should be encouraged more.