STRATEGIC APPROACH TO THE MANAGEMENT OF SMALL BUSINESS ENTERPRISES IN NIGERIA

Code No: 195762

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ABSTRACT

A research was set out to evaluate strategic approach as a management tool for the small and medium enterprises with a view to help them achieve a more predictable and stable growth, over the long term. Emphasis had been directed on the threat aspects, which most Small-scale Business enterprises had taken for granted. SMEs are also urged to take a hard look at some of the strategic tools: Finance, production, marketing and personnel which had not gained much popularity or acceptance.

Empirical evidence in the forms of survey research was adopted. In getting first hand information, samples of 50 respondents were drawn from a questionnaire consisting of twenty-two questions which were randomly selected, printed and administered to the entire employee as focus point. This however forms the main data collection instrument employed in the study. Data were sourced from different books on management by notable authors, theories relevant to the study were carefully examined, and views of different authors/ professionals were considered to reconcile the documentary research, in arriving at the final conclusions. Care was also taken to maintain objectivity, which could be easily affected with the Research's problems on the field.

The conclusion is that strategic management is largely relevant to Small-scale Business enterprises. And so long as due attention is paid to threats and crisis handling, the vulnerability of Small-scale Business enterprises should be reduced. That leaves only the last problem to deal with - time constraint among Small-scale Business enterprises which is said to be limiting their application of strategic management. To partly solve the problem, the training and re-training of personnel, along some priority and relevance guidelines, suiting to the operating reality of the Small-scale Business enterprises must be taking into cognizance. However, considering the universal laws of cause and effect, Small-scale Business enterprises must recognize the inevitability to apply as many techniques as possible, in order to get the maximum results. To use time and workload as a convenient excuse can often be a good justification for not strategizing; overcoming the temptation to do so leads to a more rewarding and satisfying venture for the entrepreneurs. The choice is up to each SME.

CHAPTER 1

1.0 Background Of The Study

Until recent times, the attainment of organizational efficiency in a business organization, that is, the capacity of an organization to produce desired results with minimum expenditure of time, money personnel and material, –(Smith and Grimm 1987) depended on the intuition of business owners or managers. Such intuitions were usually based on the past experience or “hunch” of owners or Top managers which could bring about a level of organizational efficiency.

Although some of these intuitive decisions worked for sometime. It has been observed that as the organization increases in size and the business environment starts to experience rapid change as a result of the influence of various external factors. Hence, managers intuition is simply not suitable enough to attain organizational efficiency.

It has therefore become imperative for managers and business owners to utilize a systematic approach towards the attainment of organizational efficiency. There is need to attempt to match the resources of the organization to the rapidly changing environment within which its operates. This systematic approach is what is referred to as STRATEGIC MANAGEMENT.

Strategic management is the process of systematically analyzing various opportunities and threats vis-à-vis organizational strengths and weaknesses, formulating and arriving at strategic choices through critical evaluation of alternatives and implementing them to meet the set objectives of the organization – (Lomash and Mishra 2003). The strategic management process facilitate to optimally position a firm in a given dynamic environment.

This study is being carried out to analyze the relationship between the application of strategic management and the efficiency of a business organization, through the use of empirical and measurable data, collected from organizations which operate in today’s dynamic environment.

1.1 Statement Of The Problems

What necessitated this research is the fact that in todays’ dynamic business environment, mere intuition and guesses have become highly inadequate to match the purpose of attaining organizational efficiency. The need for a better systematic and more predictable approach is required. Such approach can only be verified by a study which proves the existence and strength of the relationship between strategic management and organizational efficiency.

1.3 Objectives Of The Study

The objectives of any research study is to find a solution to the problem or to find relationship that exist between the problem and other problems or breaking the problem into its components parts through an exploration or analysis so that the superior and readers alike will understand the problem more clearly with the hope that it will eventually be solved through the present study.

The main objective or purpose of I the study is to conduct a research on the impact of strategic management on organizational effectiveness and performance.

The various specific objectives of the study are:-

i) To reveal that organizational efficiency is attainable in todays dynamic environment.

ii) To prove that strategic management plays a crucial role in the attainment of organizational efficiency.

iii) To show empirical evidence of the relationship between differentiation strategy and the factors that determine the efficiency of an organization.

1.4 Research Questions

A research question serves as a guide to the researcher in his guess for answer to the problem being investigated. Research question should therefore focus on the problem and should be general enough to give rise to other minor research questions. The following questions will be answered at the end of this study:-

i) Is there a strong relationship between strategic management and organizational efficiency?

ii) What effect does Differentiation strategy in particular have on the efficiency of an organization?

iii) Can Differentiation strategy be responsible for market positioning?

iv) What kind of effect does the application of differentiation strategy have on employee performance?

v) Is the application of differentiation strategy a myth or a reality?

vi) Is differentiation strategy an applicable tool for increasing profitability level?