Critically discuss the extend to which formal strategic may be Essay

Critically discuss the extend to which formal strategic may be considered to be the key to effective business process management in hospitality SME'S - Essay Example According to Tangen (2004) , this suggests poor organisational configuration, which is detrimental to sustained competitive advantage. Configuration is defined as â€Å"making choices about what a company will do and how it will do it, and†¦ensuring that the things a company does reinforce each other†. They argue that the lack of a focused competitive strategy is one of the key causes of poor organisational configuration. However, the problem of organisational configuration is not just restricted to understanding markets, with poor configuration being found in a number of key areas, including hospitality SMEs’ relationships with their customers, which are fraught with uncertainty. There is an acknowledged advantage in that small firms are closer to the customer, enabling more personal relationships to develop (Crook , 2003). However, this is tempered by the danger that having a limited customer base (Gray, 2005) facilitates the development of deferential supplier–customer relationships. Research by Harrison (2003) concludes that, apart from those firms which operate only in very low profit or niche markets, hospitality SMEs are consistently found to be subservient to their larger counterparts. This view is supported by Wong (2005) who suggest that hospitality SMEs have a lack of control over their futures because of demands made by stronger customers throughout the supply chain. An addi tional burden is a lack of power to leverage payment of debts from these customers, as noted by (Okumus, 2003), who point out that many smaller firms are â€Å"afraid to press customers too hard for payment for fear of loss of future business†. It is this scenario which most severely affects hospitality SMEs as their limited resources cannot cope with the fluctuations in cash flow that late payment inevitably brings. The overall effect of the fiercely competitive environment in which hospitality SMEs operate is that, very often, strategic planning becomes a seemingly