Organizational Components That Explain the Strategic Direction of SMEs for a New World Economic Order: The Case of Colombia

Organizational Components That Explain the Strategic Direction of SMEs for a New World Economic Order: The Case of Colombia

Rafael Ignacio Pérez-Uribe, Carlos Salcedo-Perez, Maria del Pilar Ramirez
DOI: 10.4018/978-1-7998-7689-2.ch005
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This chapter aims to show some concepts related to the importance of planning and strategic direction as a fundamental tool for the sustainability of Colombian SMEs for a new world economic order and present the proportionality relationship between this concept of strategic management and the organizational components. Keys that explain it and facilitate its development, considering the modernization model for managing organizations (MMOM), were developed by a group of researchers from the EAN University in Bogotá-Colombia. It was found that market management, organizational culture, organizational structure, and knowledge and innovation management are the components that a high percentage explain the strategic direction of this type of company on which priority improvement and innovation activities should be developed in such a way ways that allow strategies to develop more smoothly to achieve business objectives of effectiveness, efficiency, profitability, and sustainable development.
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Theoretical Framework

Hill and Jones (1996), Vidal (2004), Fuentelsaz, Polo and Maicas (2003), Dixit and Nalebuff (1991), Manso (1991), Fernández (2001), Perez-Uribe, Ocampo-Guzmán, Salcedo-Perez, Piñeiro-Cortes, and Ramírez-Salazar (2020), and others, state the importance of implementing strategy as an essential tool of direction in a changing environment. As a result, strategic planning, as a primary methodology of strategic management, is done in the short, mid, and long terms, usually in five stages (Pérez-Uribe, 2018):

Key Terms in this Chapter

MMOM: The model of modernization for organizational management comprises 16 organizational components that allow diagnosing the level of management of SMEs considering four levels of development on a 0-100% scale defined by survival (level 1), internal development (level 2), interaction with environments and markets (level 3), and world-class with best business practices (level 4).

MSMEs: Acronym of micro, small, and medium-sized companies. Depending on each country, they are classified by the number of workers, sales, and total assets. In Colombia, they are classified according to the manufacturing, commercial, and service sectors by the level of sales according to the taxing unit defined annually by the National Tax and Customs Department (In Spanish: DIAN, Departamento de Impuestos y Aduana Nacional ). Sometimes, it is also used by the number of workers: Micro company (up to 9 workers), small company (between 10 and 50 workers), medium company (between 51 and 200 workers), and large company (greater than 200 workers).

Strategic Direction: It is the “flight log” or the route that must be developed in the short, medium, and long term of an organization that generally contains a vision (long term), a mission (short term), objectives, and strategies in the medium term, an action plan (short term, less than a year) and a battery of indicators.

Organizational Components: They are the factors or elements that make up any business organization in the light of the MMOM to achieve its objectives of effectiveness, efficiency, profitability, and sustainability.

CETDIR: From Spanish, Centro de Estudios de Técnicas de Dirección . It is an official Cuban organism dedicated to the business development and training of executives of the Cuban business system and its governing bodies. It relies on research and consulting to promote more effective management dynamics in organizations.

Statgraphics Centurión XVI: It is designed for anyone who wishes to do serious data analysis without investing weeks learning how to use a statistical package. It contains over 180 statistical procedures, covering everything from summary statistics to graphical representation of data. Yet users do not need to be a statistician to use the program. Everything is completely menu-driven, and there are tools such as StatWizard and StatAdvisor to help the user use the program most effectively.

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