Strategic management practice contributes to Small Medium Enterprises (SMEs) performance in Malaysia. Statistics shows 50% the failure of SMEs to operate after five years of existence is due to the lack of strategic plan in business. Thus, the main purpose of this empirical study is to analyze the relationship between strategic management practices on SMEs’ performance in Shah Alam. The study aims to analyze the correlation between three main practices of strategic management; environmental scanning, organizational direction and management process towards SMEs’ performance. 400 questionnaires were distributed using convenience sampling technique and 335 were returned. The respondents were selected among owner managers, managers, supervisors and employees of SMEs’ in Shah Alam who are directly involved in the strategic plan in organization. Based on the findings of this study, it is recommended for SMEs to restructure management system for better strategic management practices in business that result in high level of performance of organization. The study also finds that environmental scanning, organizational direction and management process have positive significant relationship between SMEs’ performances. This study also reveals that there is high level of Small Medium Enterprises (SMEs) performance at Shah Alam.
Keywords: Strategic Management, Small Medium Enterprises (SMEs), Environmental Scanning, Organizational Direction, Management Process,
