Strategy in Manufacturing SMEs: CEOs’ Perceptions and Practices

This master’s thesis explores the perceptions of CEOs regarding strategy and strategy work within the context of Finnish manufacturing SMEs. The objective for the study was to understand the level of CEOs’ perception of strategy in comparison to the academic literature. The empirical part of the research is based on thematic interviews with 13 CEOs of Finnish manufacturing SMEs, who shared their experiences and views on strategy. The literature review examines the evolution of strategic management and manufacturing strategy from 1950 to present, introduces relevant strategy tools, and explores the characteristics, success factors, and strategic challenges to SMEs. The Literature review ends with the strategic framework, synthesizing the key themes. It illustrates how SME-specific factors and strategic dimensions shape CEOs’ perceptions of strategy. The findings show that the CEOs’ understanding of strategy does not correspond to the theoretical foundations and models of contemporary strategic research but rather appears to remain anchored in the 1980s thinking. With regard to long-term SME success, customer orientation, financial stability and human capital emerged as key success factors from the interviews. The challenges identified included limited resources, external uncertainties and to some extent CEOs’ time management. The study provides new information on the actual level of strategy work in manufacturing SMEs and concrete development suggestions for CEOs to strengthen strategic thinking.