A Systematic Review of Literature on Strategic Management Practices and Performance by SMEs 2019 to 2024

Dr John Gitau Kagumu
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Dr John Gitau Kagumu: Lecturer, Garissa University, Department of Business and Economics

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 8, 6817-6830

Abstract: Strategic management practices are increasingly recognized as pivotal drivers of performance among Small and Medium Enterprises (SMEs). This systematic literature review analyzes global, African, and Kenyan studies published between 2019 and 2024 to examine the strategic approaches employed by SMEs and their effects on performance outcomes. SMEs play a vital role in economic development, accounting for over 90% of businesses worldwide and a substantial share of employment, particularly in emerging economies such as Kenya. Despite their importance, SMEs face numerous challenges, including limited resources, informal planning, and insufficient managerial expertise. The review identifies key strategic management practices that significantly influence the performance of SMEs, including formal strategic planning, innovation-driven strategies, resource-based strategies, digital transformation, and strategic alliances. Globally, digitalization, human capital development, and structured planning are closely linked to both financial and non-financial performance gains. African SMEs, while often operating under resource constraints, have leveraged informal innovation and regional partnerships to overcome contextual challenges. In Kenya, urban SMEs adopting structured strategic practices report improvements in profitability, customer retention, and market expansion. However, considerable portions of rural and informal SMEs still rely on intuitive decision-making due to capacity limitations. Findings indicate that strategic management enhances both financial metrics—such as profitability, revenue growth, and access to financing—and non-financial outcomes, including customer satisfaction, adaptability, and employee retention. Nonetheless, barriers such as inadequate funding, digital exclusion, resistance to formalization, and infrastructural deficits hinder the adoption of strategic practices. This review underscores the need for targeted policy interventions, capacity building, and context-sensitive support to enhance strategic capabilities among SMEs. The study provides insights for policymakers, scholars, and SME practitioners aiming to promote sustainable growth and competitiveness in the SME sector.

Date: 2025
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