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The European Commission (EC) is updating the definition of small and medium sized enterprises (SMEs) following widespread consultation. The EC is focusing on a redefinition of the financial ceiling criterion rather than the ceilings in relation to the number of persons employed in categorising SMEs as micro, small or medium. The retention of a ceiling of 250 employees as the overall employment criterion for SMEs has a major drawback in that it assumes that all firms from micro to medium have broadly similar organisational and managerial processes. Some researchers contend that organisational size based on employee numbers is an important underpinning factor in the way these processes are emphasised. The analysis presented indicates that while size is important, it does not have a significant impact on the managerial and organisational processes examined. These findings lend some support for the retention of the existing size criterion in the definition of SMEs.

To date there is a dearth of research on strategic decision‐making in manufacturing small and medium sized firms. This research paper focuses on the key drivers of decision‐making and organisational performance: ownership, decision‐making (type and level) and employee deployment. These drivers are defined and operationalised.

The validity of the constructs used and their relevance was tested through the qualitative phase of the research – in‐depth interviews with chief executives and employer representative bodies. The survey instrument was also pilot tested.

The findings indicate that the sample can be divided into performance leaders and laggards. Over 75 per cent of the leaders are independently owned and over 66 per cent of the laggards are subsidiary firms. Accordingly, ownership is a key factor in overall performance. This is confirmed by the degree of profitability of both classifications.

The practical implications of the study are outlined in the paper. Chief executives are encouraged to focus on the aspects of ownership, decision making, and employee deployment that are associated with enhanced performance.

This study focuses on decision making and employee deployment according to ownership and overall performance – factors hitherto under researched in SMEs.

This paper aims to assess the link between strategic‐planning, aspects of the external environment and overall corporate performance in manufacturing SMEs.

A self‐reported postal survey was used to collect data from an initial sample of 1,000 randomly selected small and medium sized UK electronics and engineering firms. Prior to its deployment a number a staged approach was used to validate the questionnaire with a number of adjustments made following the pilot stage. A T‐test was used to examine the difference between early and late informants' response to key questions. Based on this test and telephone contact with non‐respondents, the authors conclude that non‐response is not a significant issue and should not affect their conclusions. Data reliability was confirmed using Cronbach's α – a commonly used statistical tool to consider data reliability when perceptual measures are used.

The findings indicate that the degree of awareness of external environment threats is associated with the degree of overall emphasis on the strategic‐planning process. Strategic‐planning in manufacturing SMEs is positively linked to overall corporate performance. The findings suggest the need to align the degree of emphasis on strategic‐planning and environmental awareness.

External operating environment threats are often ignored or at best marginalized by SMEs. The findings of this study emphasize the need to focus on strategic‐planning and to ensure alignment with the external operating environment.

Effective decision making is a crucial activity for manufacturing firms of all sizes. To this end, statistical techniques, such as variance theory, cognitive maps, heuristics and process theory, are widely used. However, such techniques rarely help chief executives to understand the dynamics of competitive behaviour, and often fail to bridge the gap between theory and practice. Indeed, from a small‐ and medium‐sized (SME) firm perspective, such techniques are rarely used owing to inadequate resources and/or skills. The paper seeks to address these issues.

This paper proposes and tests a new approach to multivariate analysis based on the conditional formatting of spreadsheets. The analysis was confirmed using conventional statistical methods in order to validate the proposed methodology.

The results are depicted as a visual picture of the attribute(s) under consideration and can be visually analysed.

Such an approach can be used to complement and enhance current research techniques as well as facilitating data analysis.

Little attention has been paid to the strategy‐making processes of small and medium‐sized firms (SMEs), or to the effectiveness of strategic planning in the SME sector. Planning often fails because of implementation problems often associated with SMEs’ lack of capability to determine and overcome potential barriers to strategic planning. This paper examines the concept of formal strategic planning, presents the findings of a critical analysis of the suitability of formal planning for SMEs, and identifies some of the barriers which prevent effective implementation of strategic plans. Suggests that SMEs that engage in formal strategic planning experience fewer barriers to implementation than those that do not and that subsidiary firms tend to place a greater emphasis on formal planning than independent firms. Indicates that the eight barriers to deployment examined are experienced to a lesser degree by subsidiary firms compared with independent firms. However, the differences are not statistically significant. Suggests that apart from the preparation of written strategic plans by subsidiary firms, there is little transferability from the parent firm of influences that impact on the reduction or elimination of barriers to the deployment of strategic plans. Parent firms may wish to encourage their subsidiary firms to think and act as part of a larger group and to make greater use of the more significant resources of the parent firm.

This study aims to examine the moderating effects of external environment and organisational structure in the relationship between business‐level strategy and organisational performance.

The focus of the study is on manufacturing firms in the UK belonging to the electrical and mechanical engineering sectors, and respondents were CEOs. Both objective and subjective measures were used to assess performance. Non‐response bias was assessed statistically and appropriate measures taken to minimise the impact of common method variance (CMV).

The results indicate that environmental dynamism and hostility act as moderators in the relationship between business‐level strategy and relative competitive performance. In low‐hostility environments a cost‐leadership strategy and in high‐hostility environments a differentiation strategy lead to better performance compared with competitors. In highly dynamic environments a cost‐leadership strategy and in low dynamism environments a differentiation strategy are more helpful in improving financial performance. Organisational structure moderates the relationship of both the strategic types with ROS. However, in the case of ROA, the moderating effect of structure was found only in its relationship with cost‐leadership strategy. A mechanistic structure is helpful in improving the financial performance of organisations adopting either a cost‐leadership or a differentiation strategy.

Unlike many other empirical studies, the study makes an important contribution to the literature by examining the moderating effects of both environment and structure on the relationship between business‐level strategy and performance in a detailed manner, using moderated regression analysis.

To investigate the role and impact of strategic orientation and environmental perceptions on innovation and supporting mechanisms such as process technologies and management practices, in SMEs.

A quantitative approach based on a random sampling methodology of 1,000 SMEs. Construct validity was tested in the qualitative phase of the research.

SMEs can be categorised as either prospectors or defenders. This polarisation was confirmed in this study. For example, prospectors are more likely to engage in new product development, whereas defenders are five times more likely to modify an existing product than introduce a newly patented product. Prospector‐type firms tend to deploy more new process technologies and leading management practices compared with defender type firms, particularly in a turbulent operating environment. Defenders recognise the need to “catch up” and indicate that they intend to introduce process technologies over the next two years. Firms tend to place a greater emphasis on innovation in turbulent operating environments.

The study was restricted to two different sector types: engineering and electronics. Future studies should examine other sectors and their sub sectors, possibly augmented by qualitative in‐depth case studies or an ethnographic approach.

The practical implications of the study are outlined in the paper. Chief executives are encouraged to align their strategic orientation with their innovation strategy. In addition, defender type firms should consider the greater use of process technologies and management practices.

This paper contributes to the integration of strategic orientation and innovation.

To present the main findings of a study conducted in manufacturing firms in the UK to determine the applicability of generic strategies to small and medium sized firms (SMEs).

The Miles and Snow strategic orientation typology was used to examine the emphasis on the factors used to craft strategy and its subsequent impact on organizational performance. The study examined its applicability in two contrasting sectors: engineering and electronics.

Based on the responses obtained from 194 SMEs, the findings indicate that the main strategic orientation types present in this study are associated with different environment types; prospectors tend to perceive their environment as “dynamic” whereas defenders perceive their environment as “stable”. Distinct differences were found in relation to the emphasis of both orientation types on leadership, culture, strategy, and performance outcomes. Finally, the findings indicate that “prospectors” perform better than “defenders” and are twice as likely to be high performing. Smaller firms are more likely to be “prospectors” compared with firms employing over 100 staff.

The study confirms the applicability of the Miles and Snow typology to SMEs – a domain neglected in previous studies. The findings also depict the association between the attributes of the operating environment, organizational culture, leadership and strategy on both defenders and prospectors and the path to either high or low performance.

The purpose of this paper is to interview Sir John Parker, Chairman of the National Grid.

The paper takes the form of an interview.

Sir John Parker shares his thoughts and advice on a range of topics, including leadership challenges, decision making and strategic direction.

Provides valuable insights from one of the most influential directors in British business.

Many academics have raised concerns about the growing divide between academia and practice. While more collaborative research has been called for there is a lack of research into the actual practice of academic/practitioner engagement. This research aims to explore the application of strategic management theory and the role of universities in exchanging strategic management knowledge to practice.

In depth interviews were undertaken with practitioners, academics and experts in order to get a balance of views from different perspectives.

Organizations seem to have absorbed standard, iconic strategy techniques and are not, generally, relying on academia for new insights. On the academic side there is some uncertainty about what industry “needs”. The transfer of new strategy approaches can only be achieved once practitioners acknowledge the credibility of academia in contributing to practitioner related issues.

For academics to have credibility with practitioners the context and content of collaborations need to be more proactively managed through more effective processes. The context relates to understanding the operating environment that the firm is in and how the firm's goals and objective are aligned with that environment. The content refers to the program of research or action areas selected as part of the collaboration framework. The process refers to how the collaboration is handled.

The research takes up the challenge of exploring how academics and practitioners in strategic management can work more effectively together in order to apply the latest strategic thinking to the real‐life complexities of the contemporary business world.