Strategic management in construction firms with focus on small and medium enterprises

Abstract

Small and Medium Enterprises (SMEs) play a vital role in the economy and have contributed significantly to the growth of the economy, however, there is still a high failure rate. Many face a threat of failure within the first few months of establishment and the lack of strategic planning may prevent them from achieving their full potential. The aim of the study is to investigate Strategic Management in Construction Firms with Focus on Small and Medium Enterprises. The study intends to conduct a full investigation into the use of strategic management amongst SMEs. The findings will provide insight for SMEs on whether or not there are any benefits in adopting a strategic plan. The research will address the factors that influence the adoption of Strategic Management in an organisation, to identify influencing factors that contribute to strategic management to improve performance and to identify challenges faced by SMEs in implementing a strategic plan. There is a need for a clear understanding of the extent to which SMEs use strategic management in their organisation and the challenges that they are experiencing in strategic management. The data were collected from 105 small and medium enterprises in the eThekwini region using an online survey tool. The respondents were asked to complete a self-administered questionnaire. The data for this study was then analyzed using Statistical Packages for the Social Sciences (SPSS) version 26.0. The research concluded that that majority of the eThekwini-based SMEs in the construction industry are applying strategic management practices in their business and through this application they have improved the performance of their business. The study also concluded that there were high levels of agreement with the influencing factors that drove SMEs to adopt a strategic plan and high levels of agreement with the contributing factors of strategic planning in improving performance of the business. Furthermore, the study found that there were high levels of agreement with the challenges facing the implementation of a strategic plan in an organisation. Given, the positive results of strategic management, it is recommended that SMEs adopt strategic management in their businesses and attain the necessary knowledge that is required to implement a strategic plan. It is also recommended that SMEs develop procedures and policies to address the challenges faced in implementing a strategic plan, thereby, ensuring effective strategic planning in their operations.