Abstract:

The business environment is becoming ever more turbulent, volatile and thus new strategic management theories that are proposed point to a more organic and emergent strategy formation procedure. However, these theories and models often relate to a certain kind of organizations, which tend to be larger and complex in nature and generally emphasizing more on the strategy formation process is a regular business exercise.
In addition, the comprehensive literature on strategy aligns itself more towards these large and complex organizations and the sophisticated theories on strategy formulation present little promise regarding small and flexible enterprises.
Strategy formulation differs somewhat in small businesses as compared to larger firms, as it tends to be less formal. Small firms suffer from lack of resources and managerial skills and as a result the importance of strategy formation is underestimated and worked out with minimal accuracy. This can lead to under-realization of performance and incompetent use of market opportunities and resources.
Small enterprises are important for any economy as they can enhance rural and community development through activities such as manufacturing, finance, transportation, construction and related goods and services.
This paper is devoted to explore the concept of strategy formulation in small often-diverse enterprises and will try to recommend certain guidelines of strategy formulation for small organizations.

Keywords:

Strategy formulation process, small enterprises, SME.