The Role of Strategic Management Factors in Managing Growth of Small and Medium Enterprises- A Survey of Small and Medium Enterprises in Mombasa County

Abstract

The purpose of this study was to determine the role of strategic management factors on the growth of SMES in Mombasa County. The specific objective of this study was to establish how strategic planning, strategic resource allocation, strategic training affect business growth of SMEs in Mombasa County. The research applied causal effect design to establish the relationship between strategic management factors and business growth. In this study, the target population was SMEs who have been in business for a period not less than two years. This sample was selected using stratified random sampling technique. The population was segregated into several mutually exclusive subpopulations (strata) which include 1,280 derived from the seven categories of businesses as grouped by the County Government of Mombasa because one of the categories is not a target population. A sample size of 10% was selected from the categories of the population. A sample size of 128 was selected from the seven categories because one category does not fit the target population. In using questionnaires as the major instrument throughout the research process, the researcher totally relied on the honesty and accuracy of the participants' responses. The researcher analyzed data collected from the questionnaires through the use of SPSS Version 22 which is a modern way of data analysis with a high degree of accuracy. The independent variables were tested using croncbach's alpha to find the validity of the questionnaire. The findings of the research indicate that the three objectives; strategic training, strategic planning, and strategic resource allocation all affect business growth either singly or in combination. The researcher's conclusion was that as much as SME's always conduct strategic training, planning, and resource allocation, they fail when it comes to involving all levels of management because they don't do it equitably and fairly. The researcher recommended that to increase business growth, they can create value and grow by using seven drivers namely; increase sales growth; increase operating profit margin; reduce

cash tax rate; reduce incremental investment in capital expenditure; reduce investment in working capital; increase time period of competitive advantage; reduce cost of capital. Also there is need for other researchers to consider larger and different sample sets so to take into consideration the different environment in which some of them operate. This will allow for comparison between the results of the different studies.