Small business strategy and the industry life cycle

This article proposes that individual small firms, just like large firms, use different approaches to make strategy. Three processes relevant to small firms are identified: simplistic, participative and adaptive. The article examines how these processes are related to performance, depending on industry life cycle stage. Empirical analysis indicates that all three approaches are related to small firm performance, but that the importance and impact of these relationships will change according to the industry life cycle stage. Markedly, and contrary to evidence from studies in large firms, small firms in mature industries are most likely to benefit from using adaptive strategy-making processes.