The Nigeria economic environment is
changing rapidly and this change is characterized by such phenomena as the
globalization, changing customer and investor demands, ever-increasing
product-market competition. To complete successfully in this environment,
organizations continually need to improve their performance by reducing cost,
innovating products and processes and improving quality, productivity and speed
to market. “Strategic management is an ongoing process that evaluates and
controls the business and the industries in which the company is involved,
assesses its competitors and set goals and strategies to meet all existing and
potential competitors, and then reassess each strategy annually or quarterly to
determine how it has been implemented and whether it has succeeded or needs
replacement by a new strategy to meet charged circumstances, new technology,
new competitors, a new economic environment, or a new social, financial or political
environment”(Adidu&Olanye2016).

The
small and medium scale enterprises (SMEs) are the driving force in economic
growth and job creation in both developed and developing countries due to their
ability to experiment new approach at minimum cost and create a standardized
product/ services that can meet the needs of a large target market. However,
more than half of newly established businesses survive beyond five years.
Hence, the identification of those factors which empirically lead to
entrepreneurial success and failure which would assist in equipping small
business owners with the necessary managerial skills to survive in today’s
competitive environment as well as exploits several strategies that will
improve their operational efficiencies (Simsek and Yüzbasioglu2009).

The performance of organization is the
focus of intensive research efforts on how well an organization performs its
mission and accomplishes is its goals of programs delivery is to paramount
concern. The success of failure of a strategy is significantly determined by
the quality of leadership displayed by the strategy leader normally the CEO,
during the strategy implementation process. In today’s increasingly chaotic
world and an ever changing environment, it is not enough to just keep the
organization afloat it is far more essential to make steady progress toward
some well- defined objectives. Strategic
management provides overall direction to the enterprise and involves specifying
the organization’s objectives, developing long-term policies and plans designed
to achieve these objectives, and then allocating resources to implement the
plans. The implementation of strategic management increases competitiveness,
reduce costs, improve decision-making, facilitate implementation of the
employee motivation system, shorten delivery times, higher quality of customer
satisfaction, etc It is felt that strategic management, is a key pillar for
corporate survival, it must be adopt and applied to ensure better SMEs
performance, on a more consistent basis (Thompson, 2007).

As business competition is tighter and
market conditions is more dynamic, many Small and Medium enterprises (SME) in
Kaduna State develop their efforts to understand how SME can maintain or
improve their marketing and financial performances. In order to be able to compete,
some strategic and policy management experts have encouraged companies to
implement strategic management practices.The contribution of Small and Medium
Enterprises SME to economic growth and sustainable development is globally
acknowledged (CBN, 2004). There is an increasing recognition of its pivotal
role in employment generation, income redistribution and wealth creation
(NISER, 2004). The small and medium enterprises SME represent about 87 per cent
of all firms operating in Nigeria (USAID, 2005).

Despite
Small and medium scale enterprises
important contributions to economic growth, small enterprises are plagued by
many problems including stagnation and failure in most sub-Saharan African
countries (Bekele, 2008). In Nigeria, the problem is not limited to lack of
long-term financing and inadequate management skills and entrepreneurial
capacity alone, but also, includes the combined effect of low market access,
poor information flow, discriminatory legislation, poor access to land, weak
linkage among different segments of the operations in the sector, weak
operating capacities in terms of skills, knowledge and attitudes, as well as
lack of infrastructure and an unfavourable economic climate(Bekele, 2008).

The
CBN found the reasons for the slow pace in utilization of the SMIEIS fund to
include: the desire of the Banks to acquire controlling shares in the funded
enterprises and the entrepreneurs’ resistance to submit control; inability of
the banks to adapt equity investment which is quite different from what the
banks are familiar with in credit appraisal andmanagement, and lack of proper
structure for effective administration of the scheme when it took off among
other factors. Responding to the findings, the Bankers’ Committee took a policy
decision to extend funding under the scheme to all business activities
including even non-industrial enterprises, except for general commerce and
financial services. The name of the scheme was changed from SMIEIS to Small and
Medium Enterprises Equity Investment Scheme (SMEEIS) to reflect the expanded
focus. Also, the limit of banks’ equity investment in a single enterprise was
increased from N200 million to N500 million, making room for medium size
industries (Bekele, 2008).

Small
and Medium Business organization in Kaduna State has been viewed from the point
of importing various kinds of inputs (resources), such as human resources,
capital, managerial and technical inputs. These inputs are then transformed to
provoke output which takes the form of goods and services. Also the
relationship between the organization and the Kaduna society which focuses on
the demands and legitimate rights of different claimants such as employees,
consumers, suppliers, stakeholders, government and the community, the small and
medium business operates in an external environment of opportunities and
constraints. Thus no single approach is sufficient for all times and in all
circumstances with external environmental factors affecting the organization
performance as well as those factors within the organizations (Adeoye, 2012).

 Kaduna
State SMEs business organizations do not operate in vacuum of an ineffective
management of complex and dynamic society which requires the assessment of
strengths and weaknesses of the organization and the opportunities and threats
provided by the challenges of the external environment, hence for survival and
growth, organizations must cope and adopt to these challenges posed by the ever
changing environment (internal & external) in which managers operate.
Mangers must not only be aware of what constitutes the elements of their
business environment but also should be able to respond to the forces of the
environment which inevitably impinges on the operations of the business organization(Adeoye, 2012).

Strategic
management must be employed for a more structured strategic management model,
due to its size, scope of operations, and need to encompass stakeholder views
and requirement. The private firm can exercise strategic choice, even in the
face of external constraints. The way and manner they face strategic issues can
affect the overall growth and development of the organization. It goes without
saying that the strategic framework must also address fundamental issues such
as resource base, infrastructure constrains, appropriate level of technology
and raw materials input. The relationship between the strategic management
practices and corporate performances was inconsistent. Some argue that there is
a strong relationship between the two variables, but no less believe that the
two variables do not have a strong relationship. As a result, until now, there
is still a research gap in regard to the effect of strategic management
practices on business performance. It is against this backing that this
research examinesthe impact of strategic management
on performance of
small and medium scale enterprises in Kaduna metropolis.

1.2  Statement of the Research Problem