The influence of employees’ perceptions on business strategy of small and medium-sized enterprises in Lao People’s Democratic Republic
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Citation:Phasinsaksith, S. (2014) The influence of employees’ perceptions on business strategy of small and medium-sized enterprises in Lao People’s Democratic Republic. An unpublished thesis submitted in partial fulfilment of the requirements for the Degree of Master of Business, Unitec Institute of Technology.
Permanent link to Research Bank record:http://hdl.handle.net/10652/2670
The economic reform has encouraged small and medium-sized enterprises (SMEs) in Lao PDR to thrive. There has been an increasing number of SMEs in recent years, which has attributed to a greater volume of foreign investments. Due to the inflow of foreign direct investment and the lower trading barrier, these factors have changed the conventional way of doing business, and created opportunities and threats for companies in Lao PDR. Thus, it requires the application of a business strategy to allow SMEs to be able to compete effectively in the market. However, the owners/managers of SMEs in Laos often apply the strategy based on their own experience and understanding without considering the perceptions of employees. The purpose of this research is to understand the influence of employees’ perceptions about business strategy in order to identify the factors that contribute to a successful strategy, which could make the firms adjust themselves appropriately in the current business environment. The research also examines employees’ perceptions about the strategy formulation and implementation process of SMEs in Laos, and how these perceptions would affect the outcome of strategy. This research studies the phenomenon by exploring the reality in a scientific way. As a result, this research is based on the positivist paradigm by applying a quantitative research method, which is able to deliver an outcome that is objective. The target population of this research is employees of SMEs in Lao PDR, which comprises 100 respondents as the sample size of this study. Hypotheses that are related to the research objectives have been tested and verified using different quantitative analysing techniques that are available in the well-known application software “SPSS”. The findings aimed at generating evidence that would be able to provide answers to the research questions. The findings show that employees who work for profitable SMEs believe business strategy is a key factor that drives superior business performance. There were certain degrees of interest in business strategy among employees who work for SMEs in Laos, regardless of their gender, age groups, and levels of education. In addition, the findings indicate that employees who were satisfied with the strategy of their companies performed well in their jobs, and employees who value the formulation process are those who believe in the management system of their companies. Furthermore, the findings illustrate that employees who believe in the success of business strategy of their companies are paying close attention to the implementation process. The research provides recommendations such as: the owners/managers of SMEs in Laos should develop more understanding about employees’ perceptions; SMEs in Laos should expand the knowledge of business strategy among their employees; and managers should encourage positive perceptions of employees about the strategy used by their SMEs by increasing their levels of participation in the strategic process. Moreover, managers of SMEs should demonstrate sound knowledge and understanding about strategy formulation processes, and consolidate the effectiveness of strategy implementation processes by influencing the perceptions of employees in a positive way. In conclusion, this research provides guidance for SMEs to improve their performance to give them an edge over their competitors in the industry. There are several factors that influence the outcome of strategy. However, the perceptions of employees are certainly among the major factors, which determine the success of the business strategy.