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International Small Business Journal
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DOI: 10.1177/02662426030214005
2003 21: 461 International Small Business Journal
John E. Spillan and Christopher Ziemnowicz
Strategic Management in Small Retail Businesses: The Case of Guatemala
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Strategic Management In Small Retail
Businesses
The Case of Guatemala
J OHN E. SPI LLAN
The Pennsylvania State University, USA
CHRI STOPHER ZI EMNOWI CZ
Concord College, USA
Strategic management is part of every business and constitutes an important
path to successful business operations. Managers perceive, understand, and
implement strategic management in different ways. A study of Guatemalas
small retail businesses offers an opportunity to examine the decision-making
process within a developing nation. This study investigates how managers in
forty Guatemalan businesses practice strategic management. Whether the
business managers are proactive or reactive in their decisions, they all
recognize strategic management as an integral business activity. Two types of
businesses, service retail and product retail businesses, are used as the unit
of analysis in this research project.
KEYWORDS: decision-making;retailing;strategic maneuvering;strategic
orientation
Introduction
The effective functioning of small retail enterprises contributes directly to the
economic potential and growth of a developing countrys economy by providing
links to an expanded market base. Small businesses are the backbone of the
Guatemalan economy and provide the bulk of employment. The Guatemalan
small enterprise retail environment is intensely competitive. I t is far more cut-
throat than any small retail manager would ever have to deal with in a developed
nation, such as the USA.
This research note attempts to replicate the research methodology of Julien et
al. (1999) and examines the typology of strategic behavior among small retail busi-
nesses. The purpose of this study is to test if this model is reected within the
decision-making behavior among a sample of small retail businesses in
Guatemala. By assessing the relationships among strategic orientation, marketing
461
International Small Business Journal
Copyright 2003
SAGE Publications (London,
Thousand Oaks and New Delhi)
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Research Note
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strategy, and as well as strategic maneuvering of these rms, academics and
practitioners can gain a better understanding of how these businesses operate and,
therefore, enhance the business functioning of enterprises in developing
countries.
Background
Every business manager must think broadly about a rms strategic orientation,
marketing strategies, and the scope of its strategic maneuvers. These three
decision areas often determine the survival and success of a small business.
According to Borch et al. (1999), selecting strategies for success is one of the most
important decisions for small rms. Variations in Guatemalan retail management
practices often depend on the location of the enterprise. These different prac-
tices are most striking among retailers located outside of Guatemala City, the
countrys largest metropolitan area and its capital city. Almost all the small
retailers located outside of Guatemala City operate with one major goal in mind:
survival. The owners and managers of these rms are constantly focused on how
they can sustain their enterprise. Therefore, each decision they make attempts to
generate new business and help meet their cash ow needs. The emphasis on
strategic management within the small Guatemalan rm is focused on short-term
results. This differs from small business operating in most developed countries.
Understanding how small business managers in a developing country approach
strategic management can provide insight into decision-making approaches
under intense competition. I t may also furnish a perspective on how a low degree
of strategic thinking or inadequate business planning may contribute to a rms
success or failure (Robinson, 1980; Sanford, 1982; Timmons et al., 1977).
According to Lasher (1999) and Ogunmokun (1998), a signicant body of
knowledge exists concerning strategy in the context of large rms. However, little
has been developed about applying strategic principles to small businesses,
especially those outside the USA. Most small businesses are encouraged to write
a business plan to guide them through year-to-year activities, but few actually
formally establish strategic plans that help them think about the future of their
businesses. This practice is the case in developing countries where the essence of
management is short-term planning.
The purpose of this research is to apply a number of explanatory elements by
surveying small retailing businesses located in Guatemala. To better understand
the small business decision-making process in Guatemala, the study observed
behavioral, managerial, and organizational variables. The research consisted of
40 in-depth personal interviews conducted to identify the strategic and market-
ing behaviors of Guatemalan retail enterprises.
This research note examines the existing literature, develops a conceptual
framework and presents the methodology for conducting the study. The survey
results describe small business behavior classied on the basis of strategic orien-
tation, marketing strategies, and strategic maneuvers.
I nternational Small Business Journal 21(4)
462
Literature Review
According to Lasher (1999), a strategy is how the business interacts with its
environment to achieve its mission and associated objectives. More specically,
a strategy is an action plan that guides resource investments to capitalize on
potential business opportunities. Wise strategy selections are guided by a solid
rationale grounded in the rms situation rather than by decisions based on the
momentum of past choices or whatever feels right at the time (Longenecker et
al., 2000). Every business has a strategy even if its management has never thought
about the idea. As such, the businesss strategy is simply reected in the way it
operates. The rms actions are its strategies (Lasher, 1999).
Differences in Marketing and Finance
Major operational marketing differences exist between small and large rms.
Davis et al. (1985) identify three major differences between small and large rms:
they have different marketing objectives;
they lack marketing expertise;
they have limited nancial and organizational resources.
The most limiting of these differences appears to be the nancial resources avail-
able. Weinrauchs (1987) work indicates that nancial constraints inuence
marketing activities in small business in several different forms:
restrictive credit policies;
inability to hire marketing specialists;
undercapitalization resulting in fewer new products;
inadequate physical distribution facilities;
inadequate cash ow causing ineffective hand-to-mouth marketing policies;
restrictive and inexible pricing strategies.
Because of the constraints listed above, a small businesss marketing orien-
tation, marketing strategies, and marketing maneuvering are all inuenced by the
limited amount of nancial resources that are at its disposal. Hence, it must seek
marketing strategies that are both affordable and effective in achieving its
marketing goals. According to Jennings and Beaver (1997), strategic manage-
ment becomes primarily an adaptive process concerned with manipulating a
limited amount of resources to gain the maximum immediate and short-term
advantage. Generally small rm efforts are concentrated not on predicting and
controlling the operating environment, but on quickly adapting to changing
demands and developing proper tactics for minimizing the consequences of any
threatening changes that may occur. Ogunmokun (1998) describes the real
essence of small businesses by emphasizing that management specialization is
usually minimal, with the owner/manager being a jack-of-all-trades. Greiner
(1972) demonstrates that the failure to adapt to crisis generated by growth is one
of the principal causes of business failure. According to Borch et al. (1999), the
choice of competitive strategy is one of the most important decisions for small
business success; however, there is a lack of data about the relationship between
a small rms internal resources and its strategic orientation.
Spillan and Ziemnowicz: Small Retail Businesses in Guatemala
463
Strategic Orientation
Miller and Friesen (1983) report that the alignment of a rms strategic orien-
tation to its environment is of paramount importance for its success. Businesses
confront complex environments. These environments are heterogeneous and are
characterized by a range of factors the rm needs to address (Dess and Beard,
1984; Tan and Litschert, 1994). Managers facing environments that are more
complex will perceive more uncertainty and have greater information-processing
requirements than managers facing simple environments. Environmental
dynamism can be conceptualized as the rate of change and the degree of insta-
bility of the environment (Duncan, 1972; Tan and Li, 1996). The concept of
dynamism should be restricted when change is hard to predict and when it height-
ens uncertainty for managers (Miller and Friesen, 1983). When there is greater
environmental dynamism, small business managers often face situations that are
unclear, present few alternatives, and do not have clear criteria by which to select
strategies (Venkatraman, 1989).
Marketing Strategy
There is a great deal of overlap between a rms overall business strategy and its
marketing strategy. The marketing strategy focuses on the needs of consumers
within a rms ability to satisfy them. Most small enterprises in developing
countries take a passive role in marketing by focusing and responding to local
demands. Their approaches are often unplanned. Nonetheless, marketing plays
an important role in small enterprise development and determines the growth
potential of small businesses (Kinsey, 1988). Morrison (1989) reports that strategic
marketing is most often the result of small rms responding to greater competition
and increased market fragmentation and complexity, as well as dealing with more
experienced customers. Trombetta (1976) demonstrates the importance of a small
business engaging in strategic marketing decision-making to maximize resources
and opportunities, rather than simply reacting to unforeseen occurrences.
Marketing strategy is a way of thinking, or a frame of mind. I t is more than the
adoption of a policy that meets a marketing problem. Rather, it requires the
entrepreneurs to become strategic marketing oriented. According to Morrison
(1989), strategic marketing involves establishing long-term marketing objectives
and a strategic marketing plan to reach these objectives. The development of a
marketing strategy requires the owner/manager to do a situational analysis,
determine its market goals and objectives, methodically arrange for its
implementation, and then follow-up with a valid evaluation of the plan (Allvine,
1987). To do all these activities, the small business owners/managers must redis-
tribute resources or readjust the focus of their strategic thinking. This is called
strategic maneuvering.
Strategic Thinking and Maneuvering Options
The alignment of an organizations strategic orientation to its environment is of
paramount importance for success (Yadong, 1999). The strategic choice perspec-
tive suggests that a rm needs to have different strategic responses to adapt to
different types of competition (Miles and Snow, 1978). Organizational
464
adaptability involves a rms innovativeness, proactiveness, and riskiness (Miller
and Friesen, 1983). These responses affect the rms orientation in scanning,
identifying, and capitalizing on market opportunities as well as an ability to
respond to market and contextual changes (Hambrick, 1983). Thus, the challenge
confronting small business managers is how to achieve organizational goals in
environments of uncertainty. According to Prough et al. (1988), a manager can
respond in two ways: (1) the manager can be reactive, by responding to (a)
specic problem(s) or (2) the manager can attempt to change the environment
or anticipate the change(s), which focuses on a more proactive stance. Taking the
second approach means decisions are planned and implemented. This approach
helps create environments that complement the rms strengths. On the other
hand, the reactive strategies are a wait and see attitude (Prough et al., 1988).
Thus, given an intensely competitive and complex environment, a mixed strategic
response, encompassing both proactiveness and defensiveness, is appropriate
when opportunities or threats occur (Miles and Snow, 1978).
Strategic decisions must be made with sufcient understanding of the external
and internal environments. The uncertain and dynamic external environment is
shared by all businesses. On the other hand, each organization has a unique
internal environment, which limits the options available when responding to
external challenges. For example, small and underfunded businesses focus on
short-term survival, which is exhibited most often as the status quo strategy. The
need to manage day-to-day problems limits their opportunity for thorough
strategic thinking. Enterprises that are more resourceful may have the capacity
to plan creative business solutions and develop innovative maneuvering options.
However, under intense competitive environments, even a small enterprise with
sufcient resources is forced to closely monitor short-term activities to ensure
survival. The relationship between a rms resources and decision-making will
determine its business performance.
Figure 1 illustrates the dichotomous and dynamic interactions confronting
managers. I t shows that management in small enterprises is sandwiched between
the uncontrollable forces of the external environment and their constrained
internal resources. The manager is challenged to either maintain the status quo
or develop an appropriate strategic orientation and a proactive marketing mix
for the rm. By their very nature, these two decision areas overlap, particularly
in the small enterprise. The managers decisions inuence the strategic maneu-
vering of the rm and therefore affect business performance. Conversely, the
rms resulting business performance inuences its strategic maneuvering
(Prough et al., 1988). This expands or delimits the potential strategic orientation
and marketing strategy alternatives.
Managers have two generic maneuvering choices within the framework shown
in Figure 1:
(1) They react or defend the status quo by continuing to do what works well
and only innovate as necessary to sustain a competitive edge.
(2) They take a proactive approach, by continuously responding to environ-
mental uncertainties and complexities. They attempt to anticipate and
manage the environment, rather than reacting to it.
465
Essentially, Figure 1 models the circumstances of the small business managers
thinking.
Despite the large amount of literature available on strategic management and
marketing strategy, the problem of decision-making within small retail enter-
prises operating in developing countries is not well represented.
Guatemala:The Developing Nation
Guatemala is the largest and most densely populated country in Central
America. Of its almost 13m people, 62 percent live in the rural areas (Mahler,
1999). People in rural areas must endure incredible inconveniences, such as the
lack of running water and electricity. Low wages and poor quality of life are
clearly visible. Guatemala is considered the fth poorest country in Latin
America. I t has one of the worst records on education in the region. Fifty-two
percent of its population above the age of 15 is illiterate. Among the total popu-
lation, approximately 37 percent of the men and 53 percent of the women are in
the same situation (Mahler, 1999). More than half of all Guatemalans are
indigenous and descendants of Mayan I ndians. Many of these people live in the
rural areas, but recent migration to the cities has been accelerating
(http://www.state.gov). While illiteracy reaches 72 percent in the rural areas,
indigenous women have a higher illiteracy reaching 74 percent. Four out of ten
children do not attend school and for those who do, only 30 percent complete
primary school (Mahler, 1999). This major weakness in education levels has had
a direct impact on Guatemalas economic progress. An illustration of economic
disparity is that just over 2 percent of the landowners cultivate 65 percent of the
land. Moreover, 10 percent of the people earn 44 percent of the income (Mahler,
1999).
466
strategic
thinking and
maneuvering
options
strategic
orientation
proactive
marketing
status quo or
reactive
orientation
unique internal resources
shared external environment
Figure 1. Small Business Strategic Management Decision Framework
Guatemalas economy is built on two major economic sectors: agriculture and
retail trade. Both of these segments provide the engine for economic develop-
ment. While the agricultural sector is signicant because of its export capabili-
ties, the retail sector is broad and deep in the Guatemalan economy.
Additionally, the nation enjoys signicant factors of endowment and is rich in
mineral, oil, and other natural resources. These factors of endowment, together
with low cost labor, means Guatemala now has a fast-growing light industry
sector. I t has the largest industrial base in Central America, being an important
manufacturer of pharmaceuticals, chemicals, clothing, wood, and food products
(Mahler, 1999).
Retailing in Guatemala
Typically, the marketing systems of industrialized nations provide a prototype for
the underdeveloped countries. However, the variations in size and number of
retailers among countries differ depending on the nations level of economic
development. Generally, the less developed the country, the more numerous,
more specialized, and smaller the retailer will be. The progress of local retail
marketing systems is then dependent on relative factors such as costs, trans-
portation systems and existing marketing structures, as well as cultural and social
traditions (Ortiz-Buonana, 1987). Historically, Guatemala has been a country
that has preserved the Latin American tradition of the open street market, the
mercado, where bargaining is the major method of transacting business. Equally
important is the large number of individual entrepreneurs and micro-businesses
offering services to consumers beyond those available in the traditional outlets
(Ortiz-Buonana, 1987). The micro-vendors can often satisfy end-consumers
everyday needs at a very high level of convenience. For example, nearly all
brands of sodas are available almost within a prospective customers reach nearly
any time. An end-consumer does not even need to make an effort to get the
product, as it will be directly handed to the customer by a walking vendor
carrying his/her inventory in an ice-lled bucket. Many of these micro-vendors
come directly to the consumers at their work place or home. End-consumers in
Guatemala benet with added services as well as greater bargaining power
because of the highly fragmented distribution system. Even in the most remote
rural areas, Guatemalas retail markets are extremely competitive, and only the
best marketing strategies will succeed. I n metropolitan markets such as
Guatemala City, traditional channel arrangements, such as small shops, trading
markets, peddlers, and itinerant vendors, continue to prosper side-by-side with
the more modern retail units, such as mass-market department stores and super-
markets. I n other parts of Guatemala, however, informal street vendors,
traditional markets, and small retail units are the main method for delivering
goods and services.
Perhaps most striking is that throughout the nation an end-consumer encoun-
ters a huge number of formal and informal merchants working from dawn to
dusk. The selection of goods offered is large and seems to be repeated on each
street. Very often when a trader sees another vendor successfully selling a
467
product, he or she immediately establishes a similar type of stand either next to
the rst vendor, or very close by. Merchants have their own style of selling and
buying that makes the retail market place extremely dynamic and competitive.
Some vendors may attract customers by different decorations or displays on their
shops while others present exhibitions discussing and showing the reasons why
their goods are better than any other similar goods on the street. Often, indigen-
ous sales women use their interactive skills while demonstrating handcraft tech-
niques needed to make the artisan goods. These informal undocumented
business arrangements distribute a wide assortment of food products, consumer
staples, and homogeneous shopping goods to all income groups. Ortiz-Buonana
(1987) reports that this sector has shown surprising exibility despite the govern-
ments attempts to modernize and initiate other mechanisms of economic
development in the consumer goods area. I t is typical to see informal vendors
setting up their temporary shops directly in front of a documented vendor who
is also their competitor. This approach to retailing is in stark contrast to the
highly sophisticated and regulated, but rather homogeneous malls and retail
outlets in developed nations.
Research Design
This study has an exploratory purpose; therefore, an interview-based qualitative
method was used to investigate the management activities and attributes in retail-
ing enterprises within Guatemala. I t attempts to replicate the methodology of
Julien et al. (1999) while incorporating the questions established by Thompson
and Strickland (2001). They maintain that strategic planning and development
are primary functions of any rm. They provided three dimensions, strategic
orientation, strategic marketing and strategic maneuvering, to evaluate the
strategic prole of organizations and the questions to measure managerial
decision-making in these dimensions. Whenever possible, interviews were
supplemented by relevant company documents. The technique of structured
responses used for this study permits a very high degree of reliability (Galtung,
1967). This structure is needed because differences in frames of reference and
linguistic habits, etc. will make for lower reliability when responses are unstruc-
tured (Galtung, 1967). High structuring also reects the attempt to present
exactly the same stimuli to each person being interviewed so that all are respond-
ing to exactly the same research instrument (Johnson, 1977; Leino, 1982; Smith,
1975). Such structured interviews also make it easier to collect quantiable data,
which facilitate comparisons.
The participants were business owners and managers from 40 retail enterprises
located in six major cities in Guatemala (Guatemala City, Coatepeque, San
Marcos, Quezaltenango, Mazaltenango, and Retalhuleu). All of the participants
were recruited at random and participated voluntarily. There is a possible
response bias in survey research because of a single organizational informant.
Multiple respondents and triangulation of the data would give an ideal measure.
However, the managers in this research represent small enterprises. Their very
nature is organic; therefore, these owner/managers embody their organization
468
(Julien, 1998; Mintzberg, 1979). For this reason, they are the only individuals that
can provide solid data on their business strategy and decision-making.
The rst step in collecting the data was contacting the rms to seek permission
to conduct interviews. Second, the owner/manager of the enterprise determined
the most effective method of data collection (i.e. during business operations,
while the business was closed, or other time that met the respondents conveni-
ence). All interviews were conducted by one of the authors. Each interview took
on average 1 hour and 15 minutes. The rst section asked for general information
on the demographics of the business i.e. age of the business, number of employ-
ees, and years of management experience of the respondent. Table 1 summarizes
the characteristics of the enterprises included in this survey.
The second section of the survey focused on business tasks and activities.
These were measured by having the respondents indicate each item as it
pertained to their rm relative to the competition. This approach lessens the
respondents bias because they are not asked to rate their enterprise in absolute
terms against an unknown ideal. To assure data uniformity, responses were
codied immediately following the answers to the questions. Because of a lack
of resources, as well as language and cultural sensitivity, only one author
conducted all the interviews. Given these limitations, consistency was achieved
by recording answers to each question without judgments. Ordinal scales, 1 to 5
(strongly disagree to strongly agree), were used to reect the levels of proactiv-
ity for strategic orientation, complexity for marketing strategies, and scope for
strategic maneuvers.
The processing method selected was the circomplex multiple-case studies
(Miles and Huberman, 1994). This method consists of classifying the survey data
on a matrix to identify distinct types. The strategic orientations dimension
included 12 variables, such as planning, goal setting, vision development, situ-
ational analysis, competitive analysis, etc. The marketing strategies dimension
comprised 12 variables aimed at measuring the complexity of the marketing mix
they use in their business. The strategic maneuver section consisted of 15 vari-
ables measuring the scope of management and marketing method used in their
business.
The scoring was measured as a percentage of the maximum value of 5. There-
fore, if a question received a value of 2, then the answer would be scored as 40
percent (2 divided by 5) according to Julien et al.s methodology (1999). Simple
statistical techniques were used to calculate frequencies and means (see Table 4).
Generally speaking, for each of the dimensions examined, the higher the score,
the more proactive the strategic orientation, the more complex the marketing
strategies, and the more extensive the maneuvers. Decision-making was
469
Table 1. Summary of Overall Enterprise Characteristics
Characteristics MinimumValue MaximumValue Mean
Age of enterprise 1 60 20.85
Number of workers 2 37 9.82
Years of experience 1 48 17.42
considered very proactive when the score was more than 75 percent; proactive
when the value was between 50 and 75 percent; reactive when it was between 25
and 49 percent; and very reactive when it fell below 25 percent (Julien et al.,
1999). Table 2 provides the decision-making index for this study.
Findings
Strategic Typologies
Using cluster analysis, two types of strategic behavior proles were identied.
These turned out to be the product retailing type and the service retailing type.
I t is important to note that managers in this study assessed their businesses
relative to the competition. Although this reduces the responders bias from both
a cognitive and affective standpoint, it introduces managerial grandstanding. I n
other words, managers are naturally inclined to rank themselves higher than their
competitors. I t is self-evident that managerial acumen requires a positive image
and perception of business operations and strategies. Consequently, the indi-
cators from all the respondents, without fail, tend to be high side. The ndings
are summarized in Table 3.
The rst group, referred to as Type 1, comprises 26 rms with a strong commit-
ment to strategic orientation. They seem to be proactive in developing strategies
in all three dimensions (51, 43, and 47 respectively). These rms are distinguished
by their proactive orientations, the complexity of the marketing strategies, and
the scope of their actions. Type 2 comprises 14 rms whose indicator values are
470
Table 2. Decision Making I ndex
Value Strategic Orientation Marketing Strategy Strategic Maneuvering
>75% Very proactive
5074% Proactive Complex Extensive
2549% Reactive Simple Simple
<25% Very reactive Very simple Limited
Source:Adapted from Julien, 1999.
Table 3. Classication of Firms on the Product/Service Retailing Continuum
Variable Measured Type 1 Indicator Type 2 Indicator
Product Retailing Mean Service Retailing Mean
(n =26) (n =14)
Qualications Qualications
Strategic orientation Proactive 51% Proactive 55%
Marketing strategies Simple 43% Simple 45%
Scope of strategic Simple 47% Proactive 50%
maneuvers
Mean 47% Mean 50%
Source:Adapted from Julien, 1999.
471
Table 4. I ndex of the Retail Behavior of the Sample Firms
Firms by Type Index or Measure Behavior of Firms

Proactivity of the Complexity of the Importance of the Aggregated Average
Strategic Competitive Strategic Index (%)
Orientation (%) Strategies (%) Maneuver (%)
Type 1 Product Retail
Case
1 47 43 55 48
2 35 35 44 38
3 47 47 57 50
4 50 42 44 45
7 55 43 40 46
9 50 43 49 48
10 53 40 49 48
11 60 45 65 57
12 52 33 43 43
13 47 38 45 43
14 48 37 49 45
15 52 42 53 49
16 50 45 48 48
22 62 45 65 57
24 62 45 41 49
25 48 42 39 43
26 57 43 44 48
27 48 42 39 43
28 55 47 47 49
29 58 48 49 52
30 57 38 47 47
33 58 45 47 50
34 57 50 45 51
37 38 42 31 37
39 20 37 35 30
40 50 48 51 50
Mean Index
Type 1 51 43 47 47
Type 2 Service Retail
Case
5 50 37 57 48
6 53 38 56 49
8 57 43 52 51
17 80 48 77 69
18 75 52 56 61
19 52 43 53 49
20 48 43 59 50
21 45 37 35 39
23 57 43 39 46
31 48 45 35 43
32 55 45 52 51
35 53 40 41 45
36 45 63 53 54
38 50 52 32 45
Mean Index
Type 2 55 45 50 50
relatively higher than Type 1 rms (55, 45, 50), demonstrating the strength of
their commitments to business strategies. The following is a discussion of the
comparative proles of the two types of rms and their strategic behaviors.
Strategic Orientation
According to the results shown in Table 3, both Type 1 and Type 2 rms have a
proactive alignment of the business to their environment. This proactive align-
ment is a good sign because it demonstrates that these Guatemalan retail
managers engage in strategic thinking. I t demonstrates that they scan, identify,
and capitalize on market opportunities, as well as respond to environmental
threats. Regardless of the location of the rm within Guatemala, retailer decision
makers respond to their environment by adapting a strategic orientation.
Marketing Strategy
Both Type 1 and Type 2 retailers indicate a simple approach to market strategy
development. This seems consistent with the literature, for example Samiee
(1993). The rms studied take a passive role in the composition of their
marketing mix. The thinking about the role of product, price, place, and
promotion elements are similar among the respondents. I t appears that
Guatemalan retailers have not achieved a strategic marketing orientation. Their
intensely competitive situational analysis has predetermined their goal: it is
simply that of survival.
Strategic Maneuvering
There is divergence between Type 1 and Type 2 retailers in their scope of
strategic maneuvering. Part of this difference may be traced to the type of retail
operations. There is an inherent dichotomy between the management of service
and product retailing. The choices available on the service side of the
product/service continuum offer greater alternatives and management thinking
and resources towards meeting their strategic goals. Type 2, or service retailers,
have developed a greater awareness to benet from market opportunities as well
as an ability to respond to market and contextual changes. Managers in Type 2
retail businesses attempt to anticipate changes in the environment as they have
a more proactive approach.
Discussion
The expectations for strategic thinking were conrmed in Type 1 retail busi-
nesses. Most of the retail businesses in Guatemala are small enterprises with
simple market strategies and uncomplicated actions that are enacted in response
to their specic environments. Almost all of the businesses interviewed partici-
pated in a variety of strategic planning functions, but accomplished them in a very
informal way. Most of the surveyed retailers have been in business for many years
(mean = 20.85); consequently, they probably enjoy a steady and loyal clientele.
That does not mean that they are not strategically oriented in attempting to meet
changing customer needs and the challenges of new competitors. Rather, they
472
each have their own way of doing business. Because of the intense competition
among Type 1 retailers, the option of not having a unique strategy may often lead
to business failure. This individualized approach has almost all of the attributes
associated with contemporary strategic orientations, as seen among retailers in
the developed nations. The major difference among Guatemalan Type 1 retail-
ers is that they do it much more informally and at a much lower level than do the
managers in the developed nations. Figure 1 was presented to model the
managers thinking. This study shows that managers of Type 1 retailers in
Guatemala do not overtly promote strategic management. This is a surprising
nding considering that managers facing even difcult conditions and intense
competition would tend to boast that they apply proven business practices.
Nevertheless, the survey shows that strategic analysis is on an informal and
internalized basis. Managers take into consideration the interactions between the
business and its environment even though they may unequivocally state that their
only goal is survival.
While there are many similar characteristics between product retailers and
services, the manner in which they promote and manage their operations is
signicant. The results of this study reveal that service retailers are proactive on
two dimensions. They are very strategically oriented and develop plans that allow
them to meet the challenges of their market and their competition. That they are
strategically oriented means that they do not wait until something occurs, but
rather they anticipate that certain problems may emerge or their competition will
initiate a different approach that they must counter. Since these Type 2 business
managers are proactive with their strategic orientations, they are also proactive
with their strategic maneuvering. They are ready or prepared to change or adapt
to the environment within which they operate. This nding runs counter to what
could be expected in a developing nation. For example, Samiee (1993) explained
that retail channels are fragmented and with limited communication leading to
rather simple business strategies. Nevertheless, the results of this study support
a more developed thinking prole of the service retailers in Guatemala. Type 2
businesses are much more aggressive and cannot sit back and wait for something
to happen. An example would include small service retailers involved in high-
tech business activities, such as cable providers and I nternet service. They have
to be fully involved in supplying customers with the best service possible.
Therefore, a proactive stance on strategic management activities is an expected
result.
This study conrms the model in Figure 1 as to the strategic thinking among
Type 2 managers. The survey results indicate that feedback loops are reected
within the decision-making behavior among Type 2 businesses in Guatemala.
The sample showed that strategic thinking behavior is based on open and formal
interaction with the rms external environment and its internal resources. This
thinking should result in higher performance among Type 2 retailers. I t leads
them to greater strategic maneuvering options that in turn provide not only
better strategic planning opportunities, but also better marketing strategies.
473
Conclusion
The aim of this research was to inform and educate academics, practitioners,
investors, and policy makers of the strategic orientation of small retail business
in Guatemala. This analysis promotes the learning of strategic thinking among
small business managers in a developing nation. A greater understanding of the
strategic process may help provide opportunities for investment and further
economic growth in a very competitive market.
The small business strategic management decision framework (shown in
Figure 1) establishes a model for illustrating the relationships in constraining
environments and identifying the strategic choices available to managers. This
framework presents the challenge of a dynamic external environment on one side
with the often-limited resource capabilities of a small businesss internal environ-
ment on the other side. The typical manager is confronted with the dilemma of
solving problems proactively and engaging in strategic maneuvering or, on the
other hand, remaining status quo with a reactive approach to survive in a
competitive market.
This study presented two different prole types: one for the small service
retailer and a second for product retailing rms. The analysis reveals that retail
managers in this sample recognize strategic orientation, marketing strategy, and
strategic maneuvering as central dimensions of their businesses. This issue is
important as it shows the relatively high level of thinking and understanding
among small business managers in a developing country. Often, there is a false
perception that retail managers in developing nations are backward in the
strategic planning process. This research shows that strategic thinking among
Guatemalan retailers is actively implemented in their decision-making behavior.
This nding gives additional emphasis and support for economic development and
further investment in the retail sector. This sector is one of the primary drivers for
employment and entrepreneurship. This study illustrates a relatively high level of
managerial competencies among local retail businesses. I t conrms that strategic
management constitutes an important means to successful business operations.
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JOHN E. SPILLAN, MBA and PhD in Business and Management, serves as
Assistant Professor of Business Administration at The Pennsylvania State
University DuBois Campus. His research interests center on Crisis
Management, Marketing and Entrepreneurship and International Business with
specic interest in Latin America and Eastern Europe. His articles have appeared
in the Journal of Business, Management Development Forum, International Journal
of Marketing and Marketing Research, Journal of East West Business, Journal of
Business in Developing Nations, Southern Business Review, Communication
Research Report and others. Dr Spillan is coordinator of the Bachelors of Science
in Business degree program at the Penn State-DuBois campus. He has traveled
extensively in Europe, Latin America and the Middle East. Please address
correspondence to:The Pennsylvania State University, DuBois College Place,
DuBois, Pennsylvania 15801, USA. [email:jes40@psu.edu]
CHRISTOPHER ZIEMNOWICZ earned his bachelors and MBA diplomas in the
USA. He has served as the General Manager of a small rm in Washington, DC
and grew it into a multi-divisional business. He continued with numerous
consulting and entrepreneurial activities while earning a PhD in management at
the Warsaw University of Technology in Poland. Returning to academe, Dr
Ziemnowicz was a director of an MBA program in Albany, New York. He now
serves as Associate Professor of Business at Concord College, a part of the West
Virginia State System in Athens, WV. His teaching responsibilities and research
interests include strategic management, international business, entrepreneurship,
and marketing. He has taken numerous journeys within the USA and Europe, as
well as in Guatemala and Thailand. Please address correspondence to:Concord
College c/o Division of Business and Economics, Campus Box 3, Athens, West
Virginia 24712, USA. [email:chrisz@concord.edu]
476
Gestion stratgique dans les petites entreprises de dtail
Le cas du Guatemala John E. Spillan
The Pennsylvania State University, Etats-Unis
Christopher Ziemnowicz
Concord College, Etats-Unis
La gestion stratgique fait partie de chaque entreprise et constitue un important chemin
de la russite des oprations commerciales. Les responsables peroivent, comprennent et
mettent en oeuvre la gestion stratgique de diffrentes faons. Une tude des petites
entreprises de dtail au Guatemala permet dexaminer la prise de dcision avec une nation
en voie de dveloppement. Cette tude examine la faon dont les responsables de quarante
entreprises guatmaltques pratiquent la gestion stratgique. Que les responsables des
entreprises prennent les devants ou ragissent quand il sagit de prendre des dcisions, ils
reconnaissent tous la gestion stratgique comme une activit commerciale intgrale. Deux
types dentreprises, de dtail de services et de dtail de produits sont utiliss comme lunit
danalyse dans cette action de recherche
Mots cls: prise de dcision; dtail; manuvre stratgique; orientation stratgique
Direccin estratgica en las pequeas empresas minoristas
El caso de Guatemala John E. Spillan
La Universidad del Estado de Pennsylvania, EUA
Concord College, EUA
La direccin estratgica forma parte integral de toda empresa y constituye un importante
camino del xito en las actividades comerciales. Los directores perciben, interpretan y
aplican la direccin estratgica de maneras muy diferentes. Un estudio de las pequeas
empresas minoristas de Guatemala ofrece la oportunidad de examinar el proceso de toma
de decisiones en una nacin en vas de desarrollo. Este estudio investiga cmo los
directores de cuarenta empresas guatemaltecas practican la direccin estratgica. Todos
los directores comerciales, sea que tomen decisiones proactivas o reactivas, reconocen que
la direccin estratgica es una actividad comercial integral. Se emplean dos tipos de
empresas, empresas de servicios al por menor y empresas de venta de productos al por
menor, como la unidad de anlisis para este proyecto de investigacin.
Palabras claves: toma de decisiones; comercio al por menor; manipulacin estratgica;
orientacin estratgica
477
Strategisches Management im Einzelhandel (Kleinunternehmer)
Fallbeispiel Guatemala John E. Spillan
Pennsylvania State University, USA
Concord College, USA
Strategisches Management ist Teil jedes Geschftes und stellt einen entscheidenden
Faktor zu erfolgreichen Geschftstransaktionen dar. Manager nehmen strategisches
Management auf unterschiedliche Weise wahr, verstehen und setzen es unterschiedlich
um. Eine Studie ber Kleinunternehmen in Guatemala zeigt eine Mglichkeit auf, den
Entscheidungsprozess in einem Entwicklungsland zu untersuchen. I n dieser Studie wird
recherchiert, wie Manager in vierzig Unternehmen in Guatemala strategisches
Management praktizieren. Unabhngig davon, ob die Geschftsfhrer sich in ihren
Entscheidungen proaktiv oder reaktiv verhalten, sehen sie alle strategisches Management
als wesentliche Geschftsaktivitt an. I n dieser Studienarbeit werden zwei Arten von
Unternehmen bei der Analyse bercksichtigt: Dienstleistungseinzelhandel und
Produkteinzelhandel.
Schlagwrter: Entscheidungsprozess; Einzelhandel; strategische Taktik; strategische
Orientierung
478

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