Strategy Formulation in Small Business: The Hong Kong Experience

SHUI-YING CHAN IS WTITH THE CITY LTniversitx of Hong Kong and M. J. Foster is associate dean of the Faculty of B1usiness at Kingston University, England. This paper describes the results of a stuidv examining the strategy formulation process in small businesses in Hong Kong in th-le i-iid-1990s. It is believed to be the first stuch study. A sample of some 42 businesses were examined to determine how their actual planning behavioutr comipared with that predicted fromii a suin ple, three-stage imodel of the strategy f'or-niitulationi process based on the literature in both strategy and small business. The imnpact of elenrienits of owner-managers' backgrouni-ds o01 tlhc process xras also examninled. The samiiple ol companies coveret a witle rangc of buisillesses with the bulk being in the sel-xite segmeints of variolus sorts, tlhis being i-epresentative of tlhe Hong Konig econoiny. The 'westernised Chinese' niatuire of most of Hong Kong's resideints was seen to be an iinportant contexttal factor to observed behaviour. The paper concludes with some brief suggestions for ftuttire behaviour bv such small firms.

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