The CEOs' characteristics and their strategy development in the UK SME sector: An empirical study

Abstract

Purpose

This research sets out to examine the role of chief executive officers (CEOs) in the development of the business strategy in small and medium‐sized enterprises (SMEs).

Design/methodology/approach

The study explores the hypotheses that there is a relationship between: CEOs' age, work experiences, educational background and strategy formulation; and the impact of the strategic awareness on their part upon firm performance, using UK Standard Industrial Classification. The sample consisted of 508 SMEs in the electronics industry using “self‐reported rating” survey questionnaire and interviews which resulted in 132 completed responses and 12 in‐depth interviews.

Findings

Correlation analysis of data showed that: there was no significant correlation between the age of the CEO's and their performance; professionally experienced CEOs placed more emphasis on formal strategy development; CEOs with an educational background are inclined to develop formal strategic plans. Strategic awareness of the CEOs plays a significant part in the formulation of business strategies.

Research limitations/implications

The findings are mostly new though limited to the electronics industry. A future comparative industry‐wide study is recommended.

Practical implications

The research has far reaching implications for selecting, training and developing CEOs, since they play a significant role in formulation of the business strategy and the firm's performance.

Originality/value

The original contribution concerns the CEO's awareness of the strategic planning process. It has special value for human resource management (HRM) decision processes towards recruitment, selection and training and management development of the CEOs.

Citation

Karami, A., Analoui, F. and Korak Kakabadse, N. (2006), "The CEOs' characteristics and their strategy development in the UK SME sector: An empirical study", Journal of Management Development, Vol. 25 No. 4, pp. 316-324. https://doi.org/10.1108/02621710610655800