PROBLEM STATEMENT

Small business planning behaviour, according to Sexton and van Auken (1982: 21) and Kiriri (2005: 3), could be described as unstructured, irregular and incomprehensive. This characterises SMMTE strategising as incremental, sporadic and reactive. Argenti (as in Thomas, 1998: 212) states: “all organisations make strategic decisions and have done so since the dawn of history … strategic decisions can be taken carefully or negligently, deliberately or haphazardly or systematically”. Over the last few decades, strategic management has become an important field of study. Despite its relevance to all organisations, most research is focused on larger organisations and has virtually ignored SMMTEs. Such neglect creates the impression that strategic management is for businesses listed on the stock exchange only. Most SMMTEs have further given credibility to such generalisations as they believe strategic management is not relevant to them and that many SMMTEs are ignorant of the value of anticipatory decision making. Owners of SMMTEs create the impression that they are not aware of the potential of strategic planning and do not appreciate the value of spending time and effort on such activity (Edoho, 1994: 1). Although research focussing on SMMTEs has increased substantially in the last decades, as indicated by Gimenez (2000: 237), that the approach remains fragmented in the study of strategy formulation of SMMTEs. In the domain of strategy, numerous concepts are used. It is however important to draw a clear distinction between the concept of strategic planning and the concept of strategic behaviour. The distinction or relationship, according to Lazenby (1999: 2), between these two concepts, is not clear in the literature. Strategic planning is often used to refer to programmatic, analytical thought processes, and strategic behaviour is linked to creative, divergent thought processes. It is in this sense that strategic behaviour fits into the entrepreneurial processes, because innovation and creativity are crucial parts of entrepreneurship.

It is argued by Bridge and Peel (2000: 1) that since smaller enterprises tend to apply informal processes to enhance planning effectiveness, formal measures (for example, written documentation) may be inappropriate for such businesses. It is noted that the effective planning systems for SMMTEs do not emphasise the need for written documentation and formal procedures. Some authors’ view is that it is tactical and operational decisions that dominate. Planning is only viewed as a higher order business activity that often leads to improved profits and sales performance. Similarly, strategic planning is still relatively unknown in many tourism businesses. Management of such businesses is often seen to suffer because of inadequate education, ignorance of modern management and marketing techniques and a lack of strategic planning. This is seen as particularly important for the tourism industry, where demand is volatile, the product is perishable and supply requires much fixed investment. As the tourism market matures, SMMTEs will be competing in an increasingly tough and discerning market (Cooper, Fletcher, Gilbert, Shepherd & Wanhill, 1998: 104, Buhalis, 1994: 259 and Buhalis & Cooper, 1998: 324).

Globalisation has hit SMMTEs very hard and as many destinations are dependent on tourism, it is critical to ensure that these businesses are adequately prepared to cope with the new economic order (Smeral, 1998: 379). The rapid growth of the international tourism industry has increased the professionalism required in the market to survive. SMMTEs seem to be the most vulnerable members of the industry and therefore need to seek competitive advantages to compete in the international arena, maintain their market share and grow their businesses (Buhalis, 1994: 260-1, and Cooper, 1992: 105). “Planning is essential at the destination to maintain quality and integrity of the resource; enhance the visitor experience; and provide a flow of benefit to the society” (Cooper, 1992: 105). SMMTEs and destinations that fail to serve and facilitate the transformation of tourism demand will be marginalised and suffer losses in market share.

A clear need for strategic planning and management co-ordination of SMMTEs is identified in the face of increasing competition in the industry and the dominance of large international companies in most sectors of the tourism industry (Cooper & Buhalis, 1996: 101). The problem lies in determining the degree of strategic behaviour tourism entrepreneurs employ, if any, and ways of devising a method to encourage such behaviour as part of normal business operations

and not only when compiling a business plan for the business. There are three key influences, according to Thomas (1998: 208), which play a role in the growth rate of SMMTEs: the background and access to resources of the entrepreneurs, the business itself, and the strategic decisions taken by the business once it is in operation.

Gimenez (2000: 237) underscores that most studies deal with narrowly defined aspects of strategy content with more integrative frameworks having adopted the Miles and Snow (1978) framework to study the strategic behaviour of SMMTEs. The Miles and Snow (1978) typology of competitive strategies, indicates Gimenez (2000: 237), is a well-researched taxonomy that is widely used and classifies SMMEs into four theoretical categories, and predicts their strategic competitive behaviour on the basis of their classification as a defender, prospector, analyser or reactor SMME.

The argument in this study is that strategic behaviour is important for SMMTEs. It will help the SMMTEs to cope with change, as change is vital and inevitable in a business to survive and grow. Strategic behaviour is about dealing with the future and appropriate direction that an owner of an SMMTE should take.

It is against this background that the current study will be conducted with the aims outlined in Section 1.4.