Abstract

This study examines the relationship between strategy formulation and the performance of small and medium enterprises (SMEs) in Kabwe District, Zambia. Grounded in Resource-Based Theory (RBT) and Dynamic Capabilities Theory (DCT), the research investigates the involvement of vision, mission, goals, and objectives in SMEs and how these influence performances. Using a pragmatic epistemology and a mixed-methods approach, data were collected from 202 SME owners/managers through questionnaires and interviews. Quantitative data were analyzed using Structural Equation Modeling (SEM), while qualitative data were explored via Directed Content Analysis (DCA). Findings reveal that while SMEs acknowledge the importance of strategy formulation, practical implementation often falls short, with theoretical knowledge not always translating into practice. The study concludes that proper alignment between theory and practice in strategy formulation significantly enhances SME performance. Recommendations include training, collaboration, and access to financial resources to strengthen strategic management practices in SMEs in Kabwe District.