STRATEGIC MANAGEMENT CONTROLS AND OPERATIONAL PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN SOUTH-WEST NIGERIA

Abstract

Small and Medium Enterprises (SMEs) in South-West Nigeria often face performance challenges
due to inadequate strategic formulation, ineffective implementation, and insufficient evaluation,
leading to resource underutilization and growth obstacles. This study investigated the impact of
strategic management controls on SMEs' operational performance in the region. This study
adopted a quantitative survey research design and collected primary data from 399 SMEs in
South-West, Nigeria, selected through stratified random sampling. Partial Least Squares
Structural Equation Modeling was used for data analysis. The findings revealed a significant
positive relationship between strategic planning and operational performance (β = 0.233, p =
0.010), indicating the importance of strategic planning in enhancing performance. Additionally,
strategic planning had a substantial impact on operational performance (β = 0.373, p = 0.000),
demonstrating its effectiveness in driving improvements. Strategic evaluation also had a positive
and significant influence on operational performance (β = 0.243, p = 0.000), highlighting its role
in performance enhancement. The study concluded that strategic management controls are strong
predictors of SMEs' operational performance. The study recommended that SMEs focus on
improving their strategic planning processes and invest in robust evaluation processes to assess
the effectiveness of implemented strategies and make informed decisions for future endeavors.