The Strategy Configuration of Chinese SMEs

Abstract

This paper investigates how Chinese SMEs configure marketing, cost-control, and innovation strategies in order to attain better organizational effectiveness. Rather than the more standard approach of suggesting that SMEs focus exclusively on one strategy, we hypothesize that when a strategy configuration is composed of multiple prioritized and related strategies, organizational effectiveness will be improved. Data collected from 133 small and medium-sized Chinese SMEs verified our hypotheses. The implications of our study for Chinese SMEs, China’s policy makers, and overseas investors are discussed.

Keywords: Strategy configuration, China, small and medium-sized enterprises, SME, organizational effectiveness