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Strategy-making process and firm performance in small firms

Published online by Cambridge University Press:  02 February 2015

Martie-Louise Verreynne
Martie-Louise Verreynne*
Affiliation:
UQ Business School, University of Queensland, St Lucia QLD, Australia
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Abstract

This paper argues that individual small firms just like large firms, place differing emphasis on strategy-making and may employ different modes of strategy-making. It offers a typology of the different modes of strategy-making that seem most likely to exist in small firms, and hypothesises how this typology relates to performance. It then describes the results of an empirical study of the strategy-making processes of small firms. The structural equation analysis of the data from 477 small firms with less than 100 employees indicates among other results that the simplistic, adaptive, intrapreneurial and participative modes of strategy-making exist in these small firms. Of these modes, the simplistic mode exhibits the strongest relationship with firm performance.

Keywords

strategy-making processfirm performancesmall firms
Type
Research Article
Information
Journal of Management & Organization , Volume 12 , Issue 3 , November 2006 , pp. 209 - 222
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2006

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