Strategic management is the domain of upper-level corporate management. The ability to make corporate decisions based on the company's internal strengths and externalities in the macro-environment is a key duty of top management. In small businesses, the business owner or founder generally operates the business and is in a leadership role as the CEO. Are the strategic management and decision-making processes similar for small entrepreneurial businesses? Is the strategic or long-term decision making the same for all entrepreneurs who start their own companies? Does the involvement of top managers in entrepreneurial companies vary in their day-to-day versus their long-term decision making? Small businesses may be inherited from family, started from scratch by an entrepreneur, or purchased as an existing entity. Is the involvement by the small business owner in decision making influenced by the way the business was founded or acquired? The purpose of this exploratory paper is to investigate the decision-making tactics of the small business owner or entrepreneur and to determine the influence, if any, of the means of business acquisition. Discussion and ideas for further research are presented.
Owner-manager involvement in long-term and day-to-day decision making has been demonstrated to influence the strategic orientation of small and medium-sized enterprises (SMEs). Becherer, Halstead, and Haynes (2003) found that the marketing orientation of an organization is dependent on how involved the CEO is both in day-today and long-term decision making in the company. They found that CEOs who are overtly involved in day-to-day decision making create organizations that are less
marketing-oriented than those who focus more on long-term decision making or strategic areas. Similarly, other aspects of the internal SME environment have been demonstrated to have more influence on strategic decisions than external variables (Barrett and Weinstein, 1998). An understanding of aspects influencing strategic management provides insight into the performance differences among SMEs.
Hill and Jones (2004) define a "strategy" as an action that managers or owners take to attain the organization's goals, whereas "strategic management" is the process in which managers choose the appropriate set of strategies for the company to allow it to achieve superior performance. These activities include analysis, planning, decision making, strategic management of the organization's culture, creating a shared value system, and defining the corporate vision. Historically, corporate executives acknowledge that strategic management has been their principal approach to directing and determining the efforts for their firms' longterm survival. Successful firms have been demonstrated to have widely supported strategic decision-making processes (Eisenhardt, 1999).
Hunsicker (1980) observed that top management involvement in the strategic planning process was too often limited to allocating resources among prior options. He attributed this narrow focus to the multiple demands on top executives' time and the complex and disparate makeup of large companies. More recently, Ugboro (1991) found that strategic planning is only effective when top managers develop a mission statement and personally spend time on the strategic process in the organization.
Strategic Planning in SMEs and Smaller Entrepreneurial Firms
Most research on strategic management has focused on mature firms in mature industries (see Hatten, 1974; Burgman, 1983; Willard, 1982; Cool, 1985; Smith, 1985) and has overlooked the implications of strategic decisions made during the founding stages of a firm. On the other hand, prior entrepreneurship literature has focused on character, education, experience, and personality of the entrepreneur as the reasons for a new venture's success (Sexton, 1982; Hisrich, 1986; Gartner, 1988). …