An assessment of strategic decision-making processes in small and micro enterprises in the services sector in South Africa

Abstract

The thesis assesses the strategic decision-making process in small and micro enterprises in the services sector in South Africa. The mortality rate of small and micro enterprises remains undesirably high in South Africa. Among the factors affecting small and micro enterprise sustainability is poor managerial skills including deficiencies in the strategic decision-making process. A review of the literature revealed that there is a gap pertaining to an assessment of strategic decision formation among this sector. On the basis of the literature review, the process of strategic decision-making was assessed in different situational contexts consisting of the external environment and internal environment which influences the decision formation. The study assumed a qualitative methodology in order to understand the phenomenon of strategic decision-making. SSemi-structured interviews, focus group sessions and observation methods were employed, as the essential form of data collection. The sample population comprised thirty businesses that satisfied the criteria of small and micro in the services sector. A content analysis was conducted in order to present the findings of the research study and offer an integrated theoretical model of the strategic decision-making process. The findings of the research indicate that the process of strategic decision-making is pivoted on the intuitive decision-making tendencies of the business owners. As such, there was diminutive reliance on a procedural rational mode towards formulating decisions among small and micro businesses. The phases of the decision formation process within these businesses were simplified with few steps involved. The phases of the decision-making process consisted of information gathering, interpretation of information and option generation for implementation. The findings show that the process of strategic decision formulation within small and micro enterprises adopts an intuitive approach consistent with a descriptive mode of decision-making. The phases of the intuitive approach to strategic decision-making among small and micro enterprises were deemed iterative and overlapped during the process of formulating the decisions as compared to a decision-making mode that is fundamentally sequential in character. The findings of this study have many potential theoretical contributions to the stock of knowledge as well as practical contributions to governmental policy-makers, supporting agencies and business owners. Recommendations for future research were advocated which have the propensity to further augment the understanding of the strategic decision-making process.