A CRITICAL ASSESSMENT OF THE IMPACT OF STRATEGIC MANAGEMENT ON THE GROWTH OF SMES IN CAMEROON

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Small and medium-sized enterprises (SMEs) are widely acknowledged as a crucial component of economic dynamism and are increasingly acknowledged as significant drivers of economic development, productivity, innovation, and employment (Hisrich, 2014). With their ability to create jobs, raise revenue, and ultimately boost a nation's Gross Domestic Product (GDP), small and medium-sized enterprises in Africa account for nearly 90% of all businesses in the continent and are the main drivers of economic growth (Muriithi, 2017). For instance, in Cameroon, the small and medium-sized enterprise sector employs 85% of the labour force, makes up 90% of the commercial market and generates roughly 70% of the GDP of the nation. In many developing nations, small and medium-sized enterprises (SMEs) remain crucial, accounting for 99% of all establishments, 67% of employment, and more than 50% of the value added to the GDP (BEAC, 2018). Due to the importance of SMEs to Cameroon and the global economy, they must continue to be profitable in order to thrive and maintain their competitiveness. Nevertheless, for SMEs to overcome a number of obstacles in order to accomplish the aforementioned goals and increase their market share and growth. SMEs are encouraged to implement strategic management techniques and strategies in their administration to tackle the management challenge. According to Bryson (2021), strategic management is a tool that serves as a roadmap for realising the business's vision. It outlines the programmes and procedural actions that the organization hopes to take in order to transition its business over time from its existing state to the anticipated end. In the same manner, it focuses on the most efficient and successful ways to achieve organizational success. Furthermore, according to Huskisson (2019), strategic management is primarily concerned with the actions organizations take to achieve competitive advantage and create value for the organization and its stakeholders. Similarly, strategic management is the comprehensive process of analyzing internal and external aspects inside an organization in order to better define its goals. An SME's performance and, consequently, its growth can be impacted by the strategic management techniques it employs. Abdiwali (2019) assert that it is possible to implement strategic management techniques in the areas of leadership, dispute resolution, company culture, organizational structure, and resource allocation. These factors are all necessary for SMEs to operate, expand, and ultimately be sustainable. Although, large companies have been the focus of the majority of research on the connection between strategic management techniques and organizational growth or success (Ali and Qun, 2019). In their study, the primary obstacle, though, is that small businesses lack the tools and expertise necessary to develop, put into practice, and assess strategic management techniques. Beyond that, SMEs, in particular, are more vital to the application of strategic management principles than large corporations due to their role in creating jobs and, consequently, in driving economic growth, particularly in developing nations. The study therefore aims to conduct a survey in order to critically assess the impact of strategic management on the growth of SMEs in Cameroon.

1.2 Statement of the Problem

As the corporate environment is so inconsistent these days, there is a growing need for businesses to be improved. The world has shrunk to a global village, opening doors for businesses to expand and find new customers everywhere. However, expanding a business, whether domestically or globally, presents numerous obstacles. It has been observed that small and medium enterprises always look for novel approaches to guarantee expansion in both opportunities and strategies. While, one of these difficulties in effectively utilizing strategic management practices or strategies  is management incompetence, which frequently causes several SMEs to fail (Anyoso & Mang’ana, 2022). For instance, when an organization tries to enter a market, it faces a variety of problems depending on the society in which it operates. For this reason, strategic management strategies are necessary. Furthermore, strong emphasis on the benefits of enterprise resource planning and strategic management can significantly enhance the growth of small and medium-sized businesses worldwide. Thus, it is in the light of this, the study seeks to critically assess the impact of strategic management on the growth of SMEs in Cameroon.

1.3  Objectives of the Study

The main purpose of this study is to critically assess the impact of strategic management on the growth of SMEs in Cameroon. Specifically, the study will;

Assess the factors influencing the implementation of strategic management in SMEs in Cameroon.

Investigate the impact of strategic management on the growth of SMEs in Cameroon

Investigate the challenges associated with implementing strategic management practices in SMEs in Cameroon.

1.4 Research Questions 

The following questions have been prepared for the study:

What factors influence the implementation of strategic management in small and medium-sized enterprises (SMEs) in Cameroon?

How does strategic management impact the growth of SMEs in Cameroon?

What challenges are associated with implementing strategic management practices in SMEs in Cameroon?

1.5 Research Hypotheses

H0: There is no significant impact of strategic management on the growth of SMEs in Cameroon.

Ha: There is no significant impact of strategic management on the growth of SMEs in Cameroon.

1.6 Significance of the Study

The SMEs owners and managers will find this study helpful in implementing strategic management in accordance with the recommended enhancements for growth. Also, the study will motivate businesses to adopt the creation of strategic plans through participation, which will lead to the execution of successful plans. Through the finding of the study, the stakeholders will be able to comprehend and value the goals of the strategic management plans and the necessity of implementing them in day-to-day operations. In addition, the study will inform interested parties about the goals of strategic plans and the best ways to put them into practice. Furthermore, it will serve as a valuable resource for scholars conducting literature reviews in this area, contributing to the academic discourse and serving as a foundational text for future research endeavors. 

1.7 Scope of the study

The scope of this study is boarded on the impact of strategic management on the growth of SMEs in Cameroon. Empirically, this study will assess the factors influencing the implementation of strategic management in SMEs in Cameroon, investigate the impact of strategic management on the growth of SMEs in Cameroon and the challenges associated with implementing strategic management practices in SMEs in Cameroon.

Geographically, the study will be delimited to SMEs owners in  Douala, Cameroon 

1.8 Limitation of the study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents.In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. 

More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.

1.9 Definition of Terms

Strategic management: refers to the systematic process of formulating, implementing, and evaluating long-term organizational objectives and strategies to achieve sustainable competitive advantage.

Small-scale businesses: also known as small and medium-sized enterprises (SMEs), are enterprises characterized by their relatively small size in terms of assets, revenues, and number of employees.

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