The statement that business strategy correlates with organizational performance has been confirmed by many strategic management literatures. Despite of that, only a few empirical researches were conducted on the effect of business strategy on Performance of SMEs in Palestine. The purpose of this study is to determine whether the performance of Manufacturing SMEs differs with the choice of business strategies they adopt. The independent variables were low cost strategy, differentiation strategy, focus strategy, hold and maintain strategy, bare bone strategy, product type strategy, and customer type strategy. In other words, the effects of these seven constructs were measured against SMEs performance. The study was based on resource based view theory (RBV) and contingency theory. The number of Questionnaires used to collect data from the respondents was 341. The respondents are from manufacturing SMEs in West Bank of Palestine. The findings indicate that there is a significance difference between the business strategy implemented by the manufacturing SMEs and performance.

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