Organizational strategy and firm performance: a test of miles and snow’s model using 34 paint manufacturing SMES in South-western Nigeria

This paper provides a systematic empirical evidence obtained from 34 paint manufacturing SMEs in South-Western Nigeria in support of Miles and Snow’s model that prospectors and anxious analyzers perform better than domain defenders and reluctant reactors. Primary and secondary data were used for the analysis. Using the ordinary least square (OLS) regression technique and correlation matrix to analyze performance data covering a period of three years, significant performance differences were found between prospectors, analyzers, defenders and reactors. A negative performance was found to be associated with a reluctant reactor strategy and this was significant at 0.05 level. The study found out that SMEs compete in different ways thus allowing for their classification as prospectors, analyzers, defenders and reactors. This result has brought additional fresh evidence to dismiss the speculation that Miles and Snows typology is a sequential stage of strategy development in which defender strategies are linked to small firms and prospector strategies to larger firms. The overall evidence in the study suggests that organizational strategy plays an important role in explaining the relative success or failure of SMEs and that SME managers can make a significant difference to the performance of their organizations through the type of strategies that they use.

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