Strategic management: an Eastern Cape construction SME case study

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Adendorff, Chris
Appels, Gaynor
Botha, Brink
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University of the Free State
English: Small and Medium-size Enterprises (SMEs) fulfil an important role in the long-term growth and development of the economy of the country. The development and growth of construction SMEs are important for all countries, as a strong SME base has the capacity to produce a high-quality infrastructure for the country. However, research has revealed the high failure rate of small businesses within the first five years of their existence in South Africa. In addition, research also indicated that lack of long-term planning and lack of strategic thinking are major contributing factors to the failure of most SMEs. For instance, despite the considerable growth in the industry in the past decade due to government’s considerable infrastructural spending occasioned by the 2010 FIFA World Cup, the majority of construction SMEs failed to use the opportunities gained in this period to develop into established construction entities. This study investigates how strategic management can be applied to address the problems faced by construction SMEs, and to explore techniques and tools of strategic management that can make a significant contribution to their growth and development. The research findings, based on a literature review and a qualitative research approach, suggest that, although many construction SMEs perform poorly, some have the potential to grow and develop into more established entities by proactively managing their firms strategically. In addition, the findings indicate that SMEs that practise strategic management perform better, and that there are many advantages for SMEs that adopt strategic management principles at the organisational level.
Afrikaans: Klein en mediumgrootte ondernemings (KMO’s) speel ‘n belangrike rol in die langtermyn groei en ontwikkeling van die ekonomie van die land. Die ontwikkeling en groei van konstruksie KMO’s is belangrik vir alle lande omdat ‘n sterk KMO-basis die kapasiteit het om ‘n hoë-kwaliteit infrastruktuur vir die land voort te bring. Nietemin, navorsing het gewys na die hoë mislukkingsyfer van kleinondernemings binne die eerste vyf jaar van hul bestaan in Suid-Afrika. In aansluiting hierby, toon navorsing ook dat ‘n gebrek aan langtermynbeplanning en die gebrek aan strategiese denke groot bydraende faktore tot die mislukking van meeste KMO’s is. Byvoorbeeld, ten spyte van die oorwegende groei in die industrie in die verlede as gevolg van die regering se oorwegende infrastuktuurbesteding vir die 2010 FIFA Sokker Wêreldbeker, het die meerderheid Konstruksie KMO’s misluk om die geleenthede in hierdie periode te ontwikkel na gevestigde konstruksie-entiteite. Hierdie artikel ondersoek dus hoe strategiese bestuur toegepas kan word om die probleme wat deur konstruksie KMO’s ervaar word aan te spreek, en om tegnieke en toerusting van strategiese bestuur te ondek wat ‘n merkbare bydrae tot die groei en ontwikkeling kan maak. Die navorsingsbevindings wat op ‘n literatuurstudie en ‘n kwalitatiewe navorsingsbenadering gebaseer is, stel voor dat alhoewel baie konstruksie KMO’s swak presteer, het sommiges die potensiaal om te groei en te ontwikkel na meer gevestigde entiteite deur proaktiewe strategiese bestuur van hul firmas. In aansluiting hierby dui die bevindinge ook aan dat die KMO’s wat strategiese bestuur toepas, beter vaar, en dat daar baie voordele is vir KMO’s wat strategiese bestuurbeginsels op organisatoriese vlak aanneem.
Construction industry, Small and medium-size enterprises, Strategic management
Adendorff, C., Appels, G., & Botha, B. (2011). Strategic management: An Eastern Cape construction SME case study. Acta Structilia, 18(2), 40-63.