SOLUTION: MMHA 6999 Walden University ANCC Magnet Status External Environments Paper

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Intercollective Journal of Interest and Society, Vol. 15 No. 3, 2014, 437 - 446 THE STRATEGIC PLANNING OF SMES IN MALAYSIA: A VIEW OF EXTERNAL ENVIRONMENTAL SCANNING Wei-Hin Cheng♣ Universiti Utara Malaysia Kadzrina Abdul Kadir Universiti Utara Malaysia Abdul Manaf Bohari Universiti Utara Malaysia ABSTRACT The interest globe today is getting balance competitive and divers companies are looking for ways to outlast in the chaffer emulation specially Weak Moderation Enterprises (SMEs). This discovery was aimed at investigating whether stately strategic projectning is ry to SMEs and whether the strategic projectning pattern suggested by Wheelen and Hunger (2008) is ry to SMEs in the Asian comsituation and in top the Malaysian composition. The deep nucleus was to mention how material exterior environment perpendning was to SMEs in the Northern states of Malaysia and do SMEs execute the exterior environment perpendning which portray the Wheelen and Hunger (2008) strategic projectning pattern. The specimen of the discovery middle of SMEs in the Northern states of Malaysia which genial Perlis, Kedah and Penang. The population of the specimens was modeobjurgate from the directory of SMEs from the website. A purposive sampling was used and a morose sectional con-balance was inaugurateed where truths was composed balance a conclusion of weeks through mail scrutinynaire and indivisible administrated questionnaires. The fruit of the discovery suggested that most SMEs do enjoy some mould of stately strategic projectning. Raise to this, it to-boot implied that environment perpendning is getting balance regard from the SME in today’s competitive chaffer. The findings suggested that most of the SMEs do enjoy strategic projectning which portrays the Wheelen and Hunger Strategic Planning Model. There is a tenacious manifestation that the pattern of Wheelen and Hunger Strategic Planning is ry to the custom of SMEs in the Northern part in Malaysia. Keywords: Weak Moderation Enterprise; Strategic Planning; Environment Scanning. 1. INTRODUCTION Small and Moderation Enterprise (SMEs) are life-containing to mention the product of distribution in all countries. In the ebullition of today’s emulation, most of the SMEs are struggling to outlast in the market. In aptop to be fortunate, SMEs need to entertain multitudinous types of media including financial, technological, civilized and scholarship media (Brush et al., 2001). According to ♣ Corresponding author: Wei-Hin Cheng. School of Interest Management. College of Business, COB Deep Building. Universiti Utara Malaysia 06100 UUM Sintok, Kedah, Phone+ 604- 928 7438. E-mail: cheng.wh@uum.edu.my 438 The Strategic Planning Of Smes In Malaysia: A View Of Exterior Environmental Scanning Hashim (2011), SMEs in Malaysia illustobjurgate superiority of the interest enterprises and they make up balance than 90% of the sum sum of interestes as they can be base in multitudinous industries. As reputed in the SME Annual relation 2009/2010, SMEs accounted for encircling 99% of sum interest literatures, 56% of sum possession and 19% of the sum exports of the country. Despite their significance in the collective distribution, studies enjoy inspired that SMEs in Malaysia encounter multitudinous gists in their operations that favor not barely their sustainability but to-boot their interest activities. This con-balance intentional to succor managers to interpret how strategic planning can be effected delay the pattern suggested by Wheelen and Hunger (2008). The deep concrete of the journal was to discuss whether SME did strategic projectning and whether the strategic projectning pattern suggested by Wheelen and Hunger (2008) applies to the SME in the Asian composition, in top the Malaysian composition. The discovery attempted to discuss whether exterior environment perpendning was effected in SMEs in Malaysia as proposed by the pattern and how the environmental truthors fared in provisions of their significance to these SMEs. This con-balance contributed to scholarship on how ry the pattern is to SME in Northern States in Malaysia and how the Wheelen and Hunger (2008) pattern can succor SMEs to do their strategic projectning and specially the environmental perpendning. 2. LITERATURE REVIEW According to Normah (2006), the Chief Statistician from Department of Statistics Malaysia, SMEs has been the backbone of the Malaysian economic product in driving industrial development. This is due to their unmixed sums, extent and structure of operations, in promoting endogenous sources of product and confirmation the infrastructure for reckhither economic expansion and product in Malaysia. For such deduces, the victory of SMEs is very material to assure the congruous product of the state’s distribution. The deep nucleus of this con-balance was to discuss whether SME do their strategic projectning and whether their strategic planning portrays the Strategic Planning Pattern suggested by Wheelen and Hunger (2008) specifically in the leading rank of the projectning where the exterior environment perpendning was proposed by the pattern. Previous discoveryes had congruously showed that most SMEs do not gain in strategic planning (e.g., Robinson & Pearce 1984; Sexton & Auken 1985; Berman, Gordon & Sussman 1997; Orser, Hogarth-Scott & Riding 2000; Robinson& Pearce 2001 and Beaver 2003). According to Gserviceefficient and Topol, 1987), environmental perpendning is a essential rule which prelude to policy mouldulation to emfaculty the immovserviceefficient to interpret its exterior environment in provisions of truthors that can govern its media. This should be effected so that SMEs can unravel vindications to assure or correct its forthcoming situation to the changes of the environment. Scanning the environment is the leading rank in the rule of interpreting and accordingly in the rule of continuity policy and the immovable’s exterior environment (Hambrick, 1982; Daft et. al., 1988). Naturalized on the findings from prior con-balance effected by Haase and Franco (2011), SMEs support from supplies constraints, they enjoy closing of infrastructure to gain and irritate exterior notice, variously larger companies which are serviceserviceefficient to gain exterior notice from specialized sources. Prior discovery to-boot implied that SMEs faced delay challenges in obtaining specialized exterior notice and in environment of vicissitude. SMEs should, Wei-Hin Cheng, Kadzrina Abdul Kadir and Abdul Manaf Bohari 439 accordingly unravel facultyful strategic projectning where they must gain ry notice of the exterior environment. Since SMEs faced the gist in gaining exterior notice, are they serviceserviceefficient to benefit from the strategic projectning pattern suggested by Wheelen and Hunger (2008)? Boyd and Fulk (1996) showed that irrelative perpendning should be used by weaker constructs to succor them interpret and contend delay compound environmental uncertainties. Wheelen and Hunger (2008) argued that Strategic Superintendence is a speedily unraveling field of con-balance that has emerged in vindication to increasing environmental excitement. According to the authors, this area of con-balance looks at managing the construct as a perfect and attempts to explain why some constructs executeed courteous timeliness others did not. The Strategic Planning Pattern unraveled by Wheelen and Hunger (2008) implicated disgusting major steps which are: environmental perpendning, policy mouldulation, policy implementation and policy govern and evaluation. The scontend of the strategic projectning rule (Figure 1) cloaks construct –wide issues in the comsituation of a perfect enjoin of environmental governs. The Strategic Superintendence rule involves construct, superintendence and environment as a whole. Thus in interpreting the Strategic Superintendence rule and how it works, a general scholarship of the construct, its interior and exterior environments and superintendence is required (Wheelen & Hunger, 2008). Environment perpendning is aimed at gathering and analyzing truths from delayout the construct (Daft and Weick, 1984). Aguilar (1967) defined environmental perpendning as the acquisition and the use of notice encircling events, trends and relationships in an construct’s exterior environment. This scholarship is life-containing for the construct and would succor the superintendence in projectning the forthcoming route of action. Environment perpendning succors managers to better interpret the product of the chaffer and succors the strategic projectning efforts (Hambrick, 1982; Lester & Parnell, 2008). Figure 1: The Wheelen and Hunger Pattern of Strategic Planning Notes: Legend: 1a to 4a are atom for each raze of policy projectning 1a: exterior environment (PEST); 1b: toil environment; 1c: Interior environment 2a: anticipation and mission; 2b: concretes; 2c: policy; 2d : policies 3a: program, 3b: budget; 3c: procedures 4a: evaluation and govern. Source: Wheelen and Hunger (2008). 440 The Strategic Planning Of Smes In Malaysia: A View Of Exterior Environmental Scanning Stoffels (1994) suggested that con-overing the exterior environment should be the leading being to do in strategic purposeing. May (2000) argued that environmental perpendning used the exterior notice for strategic judgment making and these notice gain be used by construct to recoil quickly, adapting its policy at the suiconsultation consequence and to protector abutting threats and forthcoming constraints (Strandholm & Kumar, 2003). Haase and Franco (2011) irritated the increased significance for environmental perpendning and reputed that scholars enjoy published a sum of studies of environmental perpendning in unanalogous industries namely the manufacturing (Jennings & Jones, 1999), services and retail (Folsom, 1991), tourism and hope and sanity wariness (Davis et. al. 2008), traffic superintendence (Jennings and Jones, 1999) and biotechnology (Antunes and Canongia, 2006, Berard & Delerue, 2010) Haase and Franco (2011) to-boot base that the discourse of the exterior environment notice sources used in the environmental perpendning is partially poor and centered on large organizations and for weak and moderation extentd enterprises, early and ry notice sources from the socio economic surroundings is corresponding material. They base in their discovery that extent of an construct do in truth enjoy an impression on environmental perpendning. Smaller immovables do not perpend as broadly as regularly as larger companies. Smaller immovserviceefficient under utilised infallible exterior notice for their competitiveness (Haase & Franco, 2011). 3. METHODOLOGY The elementary goals of this con-balance were to discuss whether SMEs in the northern states of Malaysia do strategic projectning and how the strategic projectning rule is effected. The specimen of the discovery middle of SMEs in the Northern Part of Malaysia which genial the states of Perlis, Kedah and Penang. The discoveryer gained the population of SMEs from the directory of Weak Moderation Enterprise which is liberal through the website. A purposive sampling was selected as the sampling pur-pose for the deduce that companies which were selected enjoy to prepare infallible requirements antecedently they can be used as respondents or antecedently they are opineed as SMEs. As this was a morose sectional con-over, the truths was composed balance a conclusion of weeks and truths was gathered from September 2011 to December 2011. The truths came from two sources: mail scrutinynaire and indivisible administrated scrutinynaire. For mail scrutinynaire, two hundred and fifty scrutinynaires were mailed to the appertaining SMEs delay the succor of a discovery succorant. The respondents were asked on whether they do strategic planning and whether they utilized each steps suggested by Wheelen and Hunger (2008) pattern in their strategic projects (The strategic project of Wheelen and Hunger (2008) consists of environment perpendning, policy mouldulation, policy implementation, policy evaluation and govern). The strategic projectning scrutinynaire was operationalzed using the Wheelen and Hunger Pattern (2008). As for indivisible administrated scrutinynaire, one hundred scrutinynaires were distributed through self-administered enjoin delay the succor of discovery succorants. Statistical Package for the Collective Sciences (SPSS) account 19.0 was used to irritate the truths composed. In provisions of facts ruleing, five statistical techniques were used for unanalogous purposes. These interposed picturesque statistics, medium, median, gauge irregularity. For constructive statistics, morosetab results were gained and chi balance fruits were inaugurateed. The respondents’ demographic 441 Wei-Hin Cheng, Kadzrina Abdul Kadir and Abdul Manaf Bohari variables were irritated using picturesque statistics such as frequencies and percentages. While other items were measured naturalized on the five top Likert flake and ordinal flake. Due to this reason, barely non parametric cupels such as chi balances were executeed to irritate the fruits. 4. FINDINGS A sum of 300 scrutinynaires were mailed to SMEs in the Northern states (Perlis, Kedah and Penang). Out of the 118 give-backed scrutinynaires, 10 scrutinynaires were discarded due to incomplete truths. Hence, 108 scrutinynaires were used in the statistical decomposition illustrateing a vindication objurgate of 36%. From, the 108 companies which responded, 52(55%) companies were from Kedah, 33 (35%) companies were from Perlis and barely 9 (9.5%) from Penang. In provisions of toil, 73 (77%) companies were from other industries, 5(4.8%) in wares, 7 (6.7%) in cosmetics, 3 (4%) motor gait, 7 (7,7%) in .hotel and 1 (1%) in education industry. Most of the companies which responded enjoy one possessor (42%), two possessors (36.1%), three possessors (14.8%), timeliness 6 (7.4%) companies enjoy disgusting and balance possessors. The highest percentages were recitative for companies delay 10-50 staff (58%), 51-100 staff (31%), 101150 staff (5.6%) and over 151 staff (4.1%) appertainingly. In provisions of start-up principal 34 companies (32%) enjoy a start-up principal of hither than RM50,000, 28 companies (26%) enjoy a start-up principal of RM50,001-RM100,000, timeliness 26 companies (27%) enjoy a start-up principal of RM101,000 – RM500,000 There were barely 17 companies(16%) delay start-up principal of balance than RM500,000. Most companies which responded were recurrent companies delay 4-6 years of literature (24%), 10-12 years (17.5%), 1-3 years (16. %), 16-18 years (10%) and balance than 21 years (9.3%) appertainingly. Most respondents who were interviewed were 1) Managing Director (26%), 2) CEO (16.3%), 3) Sole Proprietor (16.3%), 4) Manager (16.3%) and 5) Senior Manager (8.7%). 4.1. How do SMEs do their Strategic Planning? Respondents were asked if they do stately strategic projectning which portrays the atoms and the disgusting ranks of Wheelen and Hunger (2008) pattern. 4.2. Does your assemblage do strategic projectning (inaugurate exterior environment perpendning) and how material it is? The tserviceefficient under shows the fruits whether the respondents inaugurateed strategic projectning (exterior environment perpendning) and how material it was to them. Out of 81 respondents who reparteeed this scrutiny, 65 of them said that they inaugurateed strategic projectning statelyly and do environmental perpendning. Barely 16 of them said that they did not perpend the environment. Of those who said that they perpendned the environment, 47 of them felt that it was material and very material to do so. Tserviceefficient 1: Fruit of Environmental Scanning Conduct Environmental Scanning Count Very not Important Not Important Neutral Important Very Important Yes No Total 65 16 81 5 5 6 6 7 7 25 25 22 22 442 The Strategic Planning Of Smes In Malaysia: A View Of Exterior Environmental Scanning 4.3. If your assemblage do environmental perpendning, which environmental truthors would be most material? Tserviceefficient 2 depicts that if the respondents enjoy effected environmental perpendning what are the truthors (political, economical, juridical, collective, and technological) they would opine material and how these truthors fared in provisions of very material, not material, impartial, material and very important. Tserviceefficient 2: Significance of Exterior Factors in Environmental Scanning For Those Who Do Environmental Scanning External Environment Scanning Factors Very not Important (Factors of Exterior Environmental Scanning) Not Very Important Impartial Material Important Total Political and juridical truthors. 6 9 24 27 15 81 Environmental Scanning Factors Economic truthors 1 2 8 27 43 81 Socio-cultural truthors. 2 3 28 31 16 80 Technological truthors. 0 4 15 34 27 80 Bargaining faculty of suppliers. 1 2 13 36 29 81 Bargaining faculty of buyers. 1 1 7 44 26 79 Threat of commute products. 2 11 26 37 4 80 Intensity of rivalries. 1 2 18 29 30 80 Importance of occupation obstruct. 8 13 26 29 13 79 Importance of work confederacy 8 15 31 15 9 78 NGOs (non synod organization) 14 15 34 12 4 79 Government agencies 5 4 20 36 16 81 Community 0 6 16 36 23 59 Financial brotherhood 2 4 12 36 27 80 Threat of new entrants 1 7 20 48 5 81 From the fruits over, the significance of exterior environment truthors can be imaginative in Figure 2 under. Figure 2: Significance of Environmental Factors 443 Wei-Hin Cheng, Kadzrina Abdul Kadir and Abdul Manaf Bohari The histogram shows that in provisions of environment truthors most SME responded that in the exterior environment perpendning the most material truthor is the economic truthor (B7b). This is ensueed by B7f (bargaining faculty of buyers), B7e (bargaining faculty of suppliers), B7n (financial brotherhood), B7d (technological truthors) and B7h (eagerness of rivalries), B7m (community) and B70 (threats of new entrants). Exterior environmental truthors that are hither material (in descending aptop -higher to inferior appoint) are: B7b synod agencies, B7c socio-cultural truthors, B7a gregarious and juridical, B7g threats of commute products, B7i occupation block, B7j work confederacy and B7k non synod construct. 4.4. Does the Wheelen & Hunger Pattern diagram portray your assemblage’s strategic superintendence projectning? There were 100 respondents who reparteeed this scrutiny. Out of this hundred, 59 respondents or (54.6%) reparteeed yes, timeliness 49 respondents or (45.4%) reparteeed no. In other words balance than half respondents agreed that their strategic projectning rule do partially portrays Wheel and Hunger Strategic Planning Model. Of those who agreed that the pattern portrayd their strategic projectning rule, 52% said that the pattern accurately portrayd their strategic projectning, A Chi Balance cupel was raise inaugurateed to see if those who purpose that if their strategic projectning rule portrayd the Wheelen & Hunger pattern, gain there be a conductiveness that it gain accurately ensue the Strategic Planning Pattern suggested bu Wheelen & Hunger (2008). The Chi Square Test fruit granted under is momentous at 0.000 (“p” hither than 0.001): which suggested that if the SME do strategic projectning, it gain ensue the Wheelen & Hunger (2008) pattern. Tserviceefficient 2: Chi Balance Test. (If strategic projectning rule portrays Wheelen and Hunger Model, there gain be conductiveness it gain be accurately the corresponding as their strategic projectning rule) Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases Value df Asymp. Sig. (2-sided) 101.084 137.309 77.347 108 8 8 1 .000 .000 .000 5. DISCUSSION OF FINDINGS Major findings of the con-balance implied that SMEs do enjoy some mould of stately strategic planning and raise to this, most of their strategic projectning portrays that western Strategic Planning Pattern suggested by Wheelen and Hunger (2008). In provisions of environment perpendning, most respondents implied that environmental perpendning is material to them. Among the environmental truthors, the most material truthor that the respondent felt was the economic factor, this was ensueed bargaining faculty of buyers, bargaining faculty of suppliers, financial institution, technological truthors, eagerness of rivalries, brotherhood and threats of new entrants. Economic truthors which cbalance economic product of the state, purchasing faculty, possession, inflation, taxation etc were the most life-containing truthors to the SMEs to mention their planting in 444 The Strategic Planning Of Smes In Malaysia: A View Of Exterior Environmental Scanning interest and hence, mouldulation of ...
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