Strategic Management Practices Effect on Growth of Small and Medium Enterprises in Nairobi

A Project Proposal Submitted to the Chandaria School of Business in Partial Fulfilment of the Requirement for the Degree of Global Executive Masters in Business Administration (GEMBA)Globalization in today’s information era has greatly affected the business environment. Organizations therefore must take deliberate measures to maintain and grow their business and make necessary adjustments to maintain competitive advantage. Small and Medium Enterprises (SMEs) in Kenya play a critical role in the economy. They created opportunities for entrepreneurship, innovation and employment. This research aimed to determine how of strategic management practices effected the growth of small and medium enterprises in Nairobi County. The specific objectives were to establish: the characteristic constraints of SMEs in Nairobi; the strategic management practices that could address these needs and finally how strategic talent management practices impacted the growth of SMEs in Nairobi. The study adopted a descriptive research design. The population of interest was the business owners and Managers of SMEs in Nairobi from the Top 100 SMEs list. Simple random sampling technique was used to select the respondents. A sample of 50% of the total population was thus considered sufficient and was used therefore 50 respondents constituted the sample population for the study. Data was collected using structured questionnaires with open and closed questions. The researcher identified a pilot group of 6 individuals from the target population to check the reliability of the research instrument. Descriptive statistical technique of analysis was used and entailed the determination of the mean and frequency distribution of the datasets in order to determine the effect of strategic management practices on growth of small and medium enterprises in Nairobi. SPSS was used to aid in the data analysis and the findings were presented in tables and figures. Results obtained on effect of incompetent management and leadership on performance of SMEs showed that organizations needed to establish a sound, tightly controlled leadership process. Results obtained on effects of supportive strategic management instruments on performance of SME in Nairobi revealed that; a strategic management system cannot achieve its full potential until it is integrated with the budgets and reward systems. Results obtained on effect of strategy evaluation and control on SME performance revealed that there should be encouragement of flow of useful feedback from managers and employees regarding the viability and effectiveness of the strategies Based on the results from the analysis and discussion, the study identified that SMEs in Nairobi County faced numerous challenges in their daily operations. These challenges varied from increased competition, the ability to adapt to rapidly changing market demand, technological change, and capacity constraints relating to knowledge, innovation, and creativity. The study found that adoption of strategic management practices could address the challenges of strategic management practices in management of SMEs. The study concluded that to avoid power struggles between departments and hierarchies SME management should create a plan with clear assignments of responsibilities. The study also found that the strategy of a corporation formed a comprehensive master plan that stated how the corporation hoped to achieve its goals and objectives. Strategy formulation involved establishing mission and vision for organizations. This study recommended that SMEs in Nairobi should always integrate market growth in their budgeting process, SMEs administration should ensure ensures that resources are allocated according to what is in the budget, and achievements should be periodically measured against strategic plan goals. The study further recommends that adoption of SME management should create a plan with clear assignments of responsibilities; senior executives need to abandon the notion that lower-level managers have similar perceptions of the strategy and its implementation. The study recommends that SME should allocate sufficient resources to budgeted items SMES should establish strategy-supportive policies, SME should establish information, communication, and operating systems that enable the managers and members to carry out their strategic roles effectively. The study suggests that future research should try to analyze the effect of knowledge management for future positioning on strategy implementation in small and medium enterprises in Nairobi