The International Institute for Science, Technology and Education (IISTE)
Abstract
The background problem is that the precise handlings of a firm’s resources are critical for the firm’s endurance. Companies usually have official procedures for calculations of their profitability of investment projects. On one hand is the corporate strategy which directs the company’s activities, determines how company resources should be used. The corporate strategy and the financial calculations should work together to ensure the best and most efficient allocation of the resources of the company. Regrettably, it does not happen like this all the time or most of the time. Therefore, the purpose of this study is the analysis of SME’s, alignment of investment decisions to overall business strategy to enhance performance. The objectives of the research are to determine the extent of SME’s alignment of investment decision to overall business strategy to enhance performance. Therefore, it will be established the nature of SME’s investment decisions practices. In addition, there will be the establishment of the business strategy adopted by different SME’s. What is more, the establishment of the challenges faced by the SME’s in the alignment of their investment decisions to overall business strategy. And in addition to come up with recommendations on how SME’s can address the challenges faced when aligning investment decisions to overall business strategy. The study will thus focus on divisionalized companies, where it is to be expected that investments and strategy are not planned by the same people but by employees in different departments. The literature reviews on alignment of investment decision and strategy which has been drawn from different authors. It will contain two parts: the theoretical review and the empirical review. Significant issues related to the research topic and finally the research gap filled by the research embarked on. The methods that will be embarked on are Phenomenological research, the goal being to qualitatively describe a lived experience of the phenomenon; it will draw attention to the research design; in order to avoid bias and human error a mix of naturalistic observation and interview as well as surveys will be made use of in the research design. Data will thus be collected quantitatively and qualitatively, and the targeted populations are that of entrepreneurs with more than one investment in Majengo and central business district. The raw data once collected will be analyzed and represented by using tables and graphs and the data analysis tools that will be used are ANOVA, SPSS, t-test and frequency to eliminate human error and come up with usable data for the research. Keywords: Small and Medium Enterprises, Investment Decisions, Business Strategy.
