Strategic Planning in Small and Medium Enterprises (SMEs): A Case Study of Botswana SMEs (original) (raw)
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Effective strategic planning and its implementation enhance Small and Medium Enterprises’ (SMEs) performance which in the long run has a significant impact on their survival. Hence, the plans become handy as they influence better decisions, accountability, organization focus, proper resources allocation and utilisation, good returns, market recognition, growth and success of entrepreneurial ventures. The overall objective of this study was to evaluate the effectiveness of strategic planning in the performance of SMEs. Specifically it looks at factors which influence SMEs to adopt strategic planning; contributions of the strategic planning in SMEs performance; and examine factors influencing effectiveness of strategic planning. 50 different categories of SMEs in Ilala Municipality were surveyed and data were collected using questionnaires, interviews and focused group discussions. Data were analysed by using descriptive statistics aided by Statistical Package for Social Science (SPSS) version 20 and thematic approach analysis. Findings revealed that organizational complexities, environment dynamics and external constraints are among the factors towards strategic planning adoption. Most of entrepreneurs seem not to be familiar with the process as they could not differentiate it from a business plan. Strategic planning is considered to be effective only if it is well formulated and properly implemented to attain the desired goals regardless of the challenges in the process and this can happen when; resources are adequate, management supports team work and also the plans are flexible. It is regarded as a factor for success through its contribution in better decisions and solutions, satisfaction to the customers, competitive advantage and market recognition which they all facilitate the chances of success and improve performance. It is concluded that there is a positive relationship between effective strategic planning and performance improvement, hence, the study recommends a need for providing training to entrepreneurs concerning proper formulation and implementation of strategic plans; also it is important to improve legal framework and development of internal experts for SMEs to ensure that they adopt and become able to continuously apply effective strategic planning. Key words: Strategic Planning, Performance of SMEs, Ilala and Tanzania
Effective strategic planning in small and medium sized firms
Management Decision, 2002
Little attention has been paid to the strategy‐making processes of small and medium‐sized firms (SMEs), or to the effectiveness of strategic planning in the SME sector. Planning often fails because of implementation problems often associated with SMEs’ lack of capability to determine and overcome potential barriers to strategic planning. This paper examines the concept of formal strategic planning, presents the findings of a critical analysis of the suitability of formal planning for SMEs, and identifies some of the barriers which prevent effective implementation of strategic plans. Suggests that SMEs that engage in formal strategic planning experience fewer barriers to implementation than those that do not and that subsidiary firms tend to place a greater emphasis on formal planning than independent firms. Indicates that the eight barriers to deployment examined are experienced to a lesser degree by subsidiary firms compared with independent firms. However, the differences are not ...
THE ROLE OF STRATEGIC PLANNING IN SMEs: LITERATURE REVIEW AND IMPLICATIONS
Summary This paper examines how and to which extent small and medium-sized enterprises (SMEs) apply strategic planning within their business activities. Specifically, we address the question of why SMEs seem to plan less than big companies, whether strategic planning and corporate success correlate with each other and whether strategic planning is a function of increasing company size.
International Business & Economics Research Journal (IBER), 2014
Strategic planning is a business tool that small and medium businesses need in todays dynamic and highly competitive business environment. It has a potential to cushion these enterprises from such unpredictable harsh business conditions. The purpose of this paper was to establish the relationship between strategic planning practices and business performance among SMEs in the Gauteng province of South Africa. Data were analysed from 200 useable questionnaires that were distributed to SME owners/managers. Factor analysis, correlations, and regression techniques were used in order to extract the dimensions of strategic planning and their relationships with business performance. Environmental scanning, business mission and vision, formality of strategic plans, evaluation and control, informing sourcing, strategy implementation incentives, employee participation, and time horizons emerged as strategic planning dimensions. The results confirm that strategic planning has a positive associa...
The Development of Strategic Planning Process for SMEs of Tanzania
FOCUS: Journal of International Business, 2019
Nowadays, small and medium enterprises (SMEs) are facing a very demanding and competitive environment in Tanzania. The demanding and competitiveness required SMEs to be constantly attentive to the current situation and plan for the future. Tanzania's SME firms should engage in practicing strategic planning activities to develop their chances of firm's survival and success as industry development. The main objective of the study is to develop a strategic planning model for guiding Tanzania's SME firms in their future strategic planning. The specific objective of this study is to identify and determine the main factors and barriers that obstruct strategic planning application in SMEs of Tanzania. It is observed that most SMEs are implementing a myopic and informal approach to strategic planning and are facing many barriers to its implementation.
The Kenyan Small and Medium Enterprises (SMEs) sector is a very competitive environment, and they need strategic planning to remain competitive. Kenyan SMEs, which include agriculture and rural businesses, have contributed greatly to the growth of the economy, mainly in the creation of employment. Yet there have been high failure rates and poor performance levels. Many are faced with the threat of failure within the first few months. Many SMEs perform well after start up, but only a few experience sustained growth through the full lifecycle and become large firms. Lack of strategic planning may prevent them from achieving their potential, or even surviving. There is very little evidence however indicating whether SMEs in Kenya engage in strategic planning, and if they do how it impacts on their general performance. This study endeavours, through a literature review, to find out how strategic planning impacts their performance. The study established that the most successful businesses use strategic planning, and there is a high failure rate for those who do not. The recommendation is that the owner or entrepreneurs of the SME to be trained in the skills of strategic planning.
Impact of Strategic Planning in the Small Businesses in Kenya
The Kenyan Small Enterprises sector is a very competitive sector, and they need strategic planning to stay put competitive. Kenyan Small businesses which include agriculture and rural businesses, have contributed greatly to the growth of the economy, mostly in the provision of employment. Hitherto there have been high failure rates and poor show levels. Many are confronted with the threat of failure within the first few years. Many SMEs perform well after start up, but only a few experience sustained growth through the full lifecycle and become large firms. It has been established that lack of strategic planning may thwart them from achieving their potential. There is very little evidence however indicating whether SMEs in Kenya engage in strategic planning, and if they do how it impacts on their general performance. This study attempts, through a literature review, to find out how strategic planning impacts their performance. The study established that the most successful businesses use strategic planning, and there is a high failure rate for those who do not. The recommendation is that the owner or entrepreneurs of the SME to be trained in the skills of strategic planning.
Incidence of Strategic Planning in Small Business: an Overview
Petroleum-Gas University of Ploiesti Bulletin, …, 2009
During the last several years, extensive attention has been paid to the issues relating to strategic planning. Even practitioners and academicians have continued their debates on the merits of strategic planning. The literature on planning in small business has grown considerably over the past decades. With a few notable exceptions, many scholars have recommended that small firms need to use strategic planning as an essential tool for their improved performance. According to Gibb and Scott (1985) strategic planning can almost certainly influence the growth of the company and provide a framework for enhancing this or it can also help maintain the existing size and capability of the firm. However, the preconceived notions of strategic planning support the idea that formal strategic planning practices heighten the owner managers' ability to think strategically (Porter, 1980; Lyles et al., 1993). Hence, the present study is initiated on incidence of strategic planning in small business. Secondary data have been taken from research monographs, books, and journals etc. Therefore, this study will contribute to the existing stock of knowledge in the literature of strategic planning in small business. Finally, based on the empirical findings strategic planning contributed significantly to the relationship with the overall performance of small business under study.
International Journal of Academic Management Science Research, 2020
This work examines relevance of strategic planning on performance of small and medium enterprises (a case study of osun state). The specific objectives are to: determine if poor strategic planning is behind the low performance of Small and medium Enterprises in Osun State; examine how strategic planning can help in improving the operations of Small and Medium Enterprises in Osun State; and to investigate the relationship between the process of strategic planning and SMEs performance. This study employed descriptive research design. The sampling techniques employed for this study are stratified and simple random sampling methods. The instrument used for this study was obtained from primary data. The primary data was obtained through properly structured questionnaire. The statistical method used to analyze the data for the purpose of this study includes both the descriptive and inferential statistics. The descriptive statistics of frequency distribution, percentages mean and standard deviation were used to analyze and relate variables which were obtained from the administered questionnaire.. The Regression analysis was used to test hypotheses. The Pearson Product Moment Correlation was used to test the hypotheses two and three. The findings show that there is a significant relationship between poor strategic planning and Low performance of SMEs, Strategic planning has significant relationship in improving the operations of small and medium enterprises in Osun State and , a significant positive relationship is therefore existed between strategic planning and SMEs Performance. The study recommended that SMEs should learn to set long term goals with implementation plans in the management of their businesses. SMEs should vigorously carry out the various strategic planning process activities that is related to their performance
Strategic Planning: Effect on Performance of Small and Medium Enterprises in Lagos, Nigeria
2015
The study examined the relationship between the use of strategic planning and performance in SME sector. In spite of the seemingly increased interest in the running of small and medium enterprises in Nigeria, along with a greater institutional support to sustain the sector, performance appears to be below expectations. It has been indicated that such poor performance of SMEs is possibly due to varied attitudes toward strategic planning. A descriptive and regression analysis with the aid of SPSS was used for analysis purposes. The study revealed that there is a significant relationship between the use of strategic planning and SME performance (r=0.604, F1,480= 275.484, p<0.05). The percentage of variance in SME performance explained by strategic planning is about 36.5%. It was revealed that SMEs in Lagos State practiced and used formal strategic plans in their operations. The implementation of working strategic plan as indicated by the respondents has contributed to the significan...