STRATEGIC MANAGEMENT AS A PREDICTOR OF ORGANIZATIONAL EFFECTIVENESS OF PRIVATE FIRMS IN CAMEROON ( A CASE STUDY OF SMES IN LIMBE, CAMEROON)

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

In the current era of globalization and technology, businesses aim to intensify their rivalry in order to capture a larger portion of the market and increase sales and customer base. However, there is competition among many economic sectors as a result of the rapid changes brought about by globalization, information technology progress, and other causes. This means that the market influences many organizations when it comes to setting performance goals. These targets are set with the intention of lowering costs, hitting sales targets, growing the customers base, boosting market share, and producing high-quality, innovative products. Only by means of strategic management will these objectives be realized. Furthermore, Abubakar, Tufail, Yusuf and Virgiyanti (2021) described strategic management as a concept that concerns with making decisions and taking corrective actions to achieve long term targets and goals of an organization. Similarly, according to Mahoney (2022), strategic management focuses on the organizational structure, competencies, and strategic positioning of the business in order to establish, seize, and maintain a competitive advantage.Additionally, it is commonly recognized that small and medium-sized businesses (SMEs) are essential to economic dynamism and are becoming more frequently recognized as important forces behind employment, productivity, innovation, and economic development (Hisrich, 2019). Small and medium-sized businesses (SMEs) make up around 90% of all businesses in Africa and are the primary forces behind economic growth due to their capacity to generate jobs, generate income, and eventually increase a country's GDP (Muriithi, 2017). In Cameroon, for example, the sector of small and medium-sized enterprises employs 85% of the labour force, accounts for 90% of the commercial market, and contributes approximately 70% of the country's GDP. Small and medium-sized businesses (SMEs) continue to be important in many developing countries; they make up 99% of all businesses, 67% of jobs, and more than 50% of the value added to the GDP (BEAC, 2018).In order for SMEs to increase their effectiveness, gain strategic advantages and overcome a number of obstacles in order to accomplish the aforementioned goals and increase their market share and growth. SMEs are encouraged to implement strategic management techniques and strategies in their administration. According to Berry (2019), strategic management is a tool for figuring out the best path forward for a company and how to get there. Through the process of strategic management planning, managers or SMEs owners  can create the policies and processes that will allow them shape and realize the future they want.  However, In actuality, strategic management techniques are neither difficult nor scientific. SMEs don't need much outside facilitation assistance up front to establish and manage an ongoing, productive planning process. Moreover, a number of underlying tasks that comprise strategic planning allow an organization SME to develop or modify its intended result (Muogbo, 2020). This is not at all like traditional tactical planning, which is mostly defensive and determines the company's course of action based on the activities of the competition. According to Olanipekun et al. (2019), strategic management provides overarching guidance to insurance firms' various areas, including marketing, financial focuses, projects, and resources. Planning for strategic management can help boost effectiveness when there is consensus over the goal and when the majority of work processes depend on technology or technical issues. The study therefore aims to conduct a survey in order to assess the impact of strategic management on organization effectiveness in private firms in Cameroon.

1.2 Statement of the Problem

The effectiveness of organizations has been the subject of much research in the last few years. Modern technology, best practices in public relations, indigenous goods and services, and an effective system for attracting and managing human resources are all becoming increasingly apparent to managers in private organizations as sources of competitive advantage. However, SMEs owners are still faced with the challenging choice of whether to develop strategic plans at all and whether to approach them from a more broad or a more targeted perspective. Nonetheless, according to Pearce et al. (2019), the strategic management process holds greater significance than the strategic management plan itself, despite the organization's preparation being essential for guaranteeing the organization's objectives and senior executives' alignment. Furthermore, Ilesanmi (2021) states that the initial phase of the strategic management process involves assessing the current economic condition and then external factors that could affect the organization's effectiveness. On the other hand, it has been found that strategic management improves an organization's  effectiveness; more specifically, an organization's financial performance is improved by the quantity of strategic planning it undertakes. Additionally, it has been mentioned by numerous writers and academics that it is critical for organizations to measure the goals they hope to achieve. Similarly, investors and managers should always employ strategic management to raise their company's real effectiveness (Dauda, 2020). Despite the obvious benefits that strategic management principles offer the private sector, especially SMEs, many Cameroonian businesses do not appear to recognize the function that strategic management components play in improving worker performance and organizational effectiveness. According to Abubakar et al. (2021), examining the connection between performance and strategic management can provide insight into the significance of strategic management in a company. Thus, it is in the light of this, the study seeks to assess the impact of strategic management on organization effectiveness in private firms in Cameroon.

1.3  Objectives of the Study

The main purpose of this study is to assess the impact of strategic management on organization effectiveness in private firms in Cameroon. Specifically, the study will;

Find out the extent strategic management practices is adopted by SMEs in Limbe, Cameroon

Find out the relationship between strategic management practices and organizational effectiveness of SMEs in Limbe, Cameroon

Find out the impact of strategic management on organizational effectiveness of SMEs in Limbe, Cameroon

1.4 Research Questions 

The following questions have been prepared for the study:

To what extent are strategic management practices adopted by  SMEs in Limbe, Cameroon?

Is there a relationship between strategic management practices and and organizational effectiveness of SMEs in Limbe, Cameroon?

What is the impact of strategic management on organizational effectiveness of SMEs in Limbe, Cameroon?

1.5 Research Hypotheses

H0: There is no significant impact of strategic management on organization  effectiveness in private firms in Cameroon.

Ha: There is a significant impact of strategic management on organization effectiveness in private firms in Cameroon.

1.6 Significance of the Study

With the insights gained from this study, private companies will be able to enhance their competitive position and achieve long-term sustainability in the market by making investments in certain resources or improving their current strategy. Owners of SMEs will also be more capable of making strategic decisions using the knowledge acquired from the study. The study's conclusions will also assist private companies, especially SMEs in Cameroon, in streamlining operations, allocating resources sensibly, and refining strategies to improve outcomes. Furthermore, it will serve as a valuable resource for scholars conducting literature reviews in this area, contributing to the academic discourse and serving as a foundational text for future research endeavors. 

1.7 Scope of the study

The scope of this study is boarded on the impact of strategic management on organization effectiveness in private firms in Cameroon. Empirically, this study will find out the extent strategic management practices is adopted by SMEs, the relationship between strategic management practices and organizational effectiveness of SMEs and the impact of strategic management on organizational effectiveness of SMEs.

Geographically, the study will be delimited to SMEs owners in Limbe, Cameroon

1.8 Limitation of the study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. 

More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.

1.9 Definition of Terms

Strategic management: refers to the systematic process of formulating, implementing, and evaluating long-term organizational objectives and strategies to achieve sustainable competitive advantage.

Small And Medium-Sized Enterprises (SMEs):  are enterprises characterized by their relatively small size in terms of assets, revenues, and number of employees.

Strategic planning: is a process by which managers of insurance firm can envision the future and develop the necessary procedures and operations to influence and achieve that future.