Towards Strategic Success in Indian Automobile Sector SMEs: Key Structural Drivers

Abstract

Strategic success relates to the smooth and effective completion of the strategic management cycle. An indicator of this is the strategy implementation result. Since an organization operates in a complex, dynamic, and volatile environment, multiple external and internal forces eventually determine the success or failure of a well-knitted strategy. The present study focused on the internal environment, specifically organizational structure. It aimed to analyze the impact of organizational structure on strategy implementation in the Indian automobile sector small and medium enterprises (SMEs). Organizational structure was measured using the constructs of the degree of formalization, degree of centralization, degree of specialization, and basic structural aspects. Strategy implementation, as a means of evaluating the strategic success of SMEs, was measured in terms of process efficiency and overall performance. Data was collected from 142 units in the select states of Punjab and Haryana using a self-administered structured questionnaire. It was analyzed through descriptive and multiple regression analysis. The results of descriptive analysis revealed that SMEs had a highly centralized, fairly specialized, and formal structure. The results of regression analysis exhibited that organizational structure had a statistically significant and positive impact on the strategy implementation in SMEs. It may be concluded that an adequate structure led to the successful execution of strategic plans, i.e., ensuring strategic success. The study recommended that organizations strike a balance between authority centralization-decentralization and wisely use the element of specialization.