Strategic decision-making in small and medium-sized enterprises: Evidence from Australia

Strategic decision-making (SDM) is fundamental to shaping the success of firms; however, the DM processes described in traditional DM theories and models have only limited applicability for our understanding of strategic decisions in small enterprises. This is because most DM models have been developed from studies of decision processes in large firms. This paper investigates the SDM process in small and medium-sized enterprises (SMEs). Data were gathered by conducting 13 case studies of Australian SMEs. It was found that a two-staged SDM process was used by many SME owners/managers and that rather than a problem-analysis-solution progression, SMEs engaged in a problem-solution-analysis process. SDM weaknesses identified were that SME owners/managers had a narrow focus in developing potential decision alternatives. Moreover, the quality in executing information searching and processing was quite moderate. Contributions of this study are that it provides new insights into SDM practices in SMEs and extends previous research in the area by providing a DM process model.