Owner-Managers and the Practice of Strategic Management

Abstract

The distinction between management of operational effectiveness and strategic management has been a core belief of much management literature. Operational management is concerned with the ongoing activities of the business in relation to existing products or services and in respect of existing markets. Strategic management, in contrast, is concerned with the future success of the business and may entail major changes in the benefits to be offered customers, in organizational capacity, and in competitive posture. The application of strategic management to small firms can be seen as posing particular challenges. This can be inferred from, for example, the organizational studies of Mintzberg (1979) who has argued that the typical owner-managers of small businesses, especially entrepreneurial ones, manage in quite a different way from the methods indicated by the strategic planning literature. Such businesses are governed, it is said, using more personal and arbitrary forms of control. However useful these arguments have been to the progress of understanding small businesses in the past, the time is fast approaching (and perhaps has arrived already) when this kind of argument is becoming fruitless and sterile. In this article it is assumed we now need to understand whether and how managers in small businesses have taken up the language and practice of planning and strategic analysis, and we need to understand with what results these have been taken up. At the heart of the article is the analysis of the results of a survey of owner-managers and other managers. The article is concluded with a look at the implications of the findings.

Towards a new framework for SMEs success: a literature review

“…Scholars (Hormozi et al, 2002;Monk, 2000;Sauser, 2005;Woods and Joyce, 2003) concur that starting a business is a risky venture and warn that the chances of small-business making it past the five-year mark are very slim so they advise entrepreneurs to develop both long-term and short-term strategies to guard against failure. Kraus et al (2006) and Okpara and Wynn (2007) argue that strategic planning plays a very important role in determining the degree of success of new or small businesses and even though a good business plan does not necessarily guarantee success, it reduces the possibility of business failure.…”

A Qualitative Perspective of Enterprise Success Factors for SMEs: A case study in the UK Chemical Distribution Industry

“…They further argue that lack of time due to multitasking, lack of expertise and business-planning skills and inadequate knowledge of the planning processes, are a few of the reasons for not engaging in strategic planning: "…it is difficult to detach yourself from the day to day things to do planning…" (R16); "…in small businesses you have to do a lot of firefighting…" (R60); "...only plan is to survive, worry about other things later…" (R35) "…too much multitasking to do anything else…" (R38); "…take business as it comes…" (R88). The finding that ISSN 2333-3324 2017 owner-managers of smaller SMEs in the UK chemical distribution industry have a less sophisticated approach to formal strategic planning than their counterparts in larger SMEs is supportive of the main body of business literature (i.e., Mazzarol et al, 2009;Stonehouse & Pemberton, 2002;Woods & Joyce, 2003).…”

Gestão ambiental e estratégia empresarial em pequenas e médias empresas: um estudo comparativo de casos

“…Consequentemente, uma tentativa de impulsionar os dirigentes dessas empresas a transcenderem seus estilos informais de gestão e a adotar métodos formais de análise estratégica e formulação da estratégia pode ser considerada utópica (WOODS & JOYCE, 2003). A estratégia do estudo de casos coletivos de Stake (2003), autor essencialmente qualitativo, foi escolhida para a consecução deste trabalho.…”