Small business research is an emerging field of study that has in recent years received impetus through a growing awareness that small business plays a very vital role in the fabric of society. However, the research on small business so far is arguably not entirely satisfactory. In fact, the diversity within the literature on both strategic management and small business does little to clarify these topics.
The field of strategic management is held by some researchers and writers to be in a pre-paradigm state with no apparent central anchoring theory. Until recent times there has been a common mindset that what is appropriate for large business should equally apply to small business. This report aims to develop an understanding of both small business and strategic management and then examine their links. This is achieved by examining the literature in these areas. The report then looks at two strategic management process models sponsored by NIBS and undertaken by some Australian businesses. This is done against the above background and in the light of a recently completed survey evaluation of one of these two programs.
The tentative conclusion is that present theory and available empirical evidence support a generic conceptual process model of strategic management that applies to small business as well as large businesses. The significant point is that different businesses will place different emphases and level of sophistication on the various elements based on the circumstances of their situation, no matter what their size. Therefore, while the process is generic, the content must also be eclectic. Businesses are open systems that need to exist in a dynamic ever increasing uncertain world. They need to stabilise some elements in order to survive and succeed. This report advocates that in order to do that a systematic approach to the process is desirable, despite some claims to the contrary. It also suggests that as a result of the many constraints in small business, consultants may be a key success factor in their strategic management.
While small businesses share some common characteristics through size, which will influence their approach to strategic management, these variables might be regarded as no more significant than many others that may influence the conduct of a business. The report has identified some of those variables that influence small business in their strategic management process and which determine their strategic dimensions and options.
Research shows that while strategic management can improve performance, it is not widely accepted or used in small businesses. This coupled with definitional confusion, misunderstanding and misuse found in both these fields, as well as the diverse range of research methods in small business research, continues to provide much uncertainty and ambiguity. And so, most findings can only be treated tentatively. It therefore follows that enormous scope and opportunity remains for research in small business.