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Strategic planning in smaller enterprises – new empirical findings

Strategic planning in smaller enterprises – new empirical findings Purpose – To analyze the performance implications of essential elements of strategic planning (time span, formalization, frequency of control, and use of planning instruments) in smaller enterprises in a simultaneous way. Design/methodology/approach – The main methods being used for this article were a thorough review of literature for the development of hypotheses and a logistical regression analysis for the empirical evaluation. The study is based on a representative sample of small Austrian enterprises ( n = 290). Findings – Planning formalization has a positive and highly significant impact on the probability of belonging to the group of growth firms, whereas other aspects of strategic planning (time horizon, strategic instruments, and control) did not contribute to performance. Research limitations/implications – Employee growth has been used as an indicator for firm performance. Other indicators (e.g. sales growth, profitability, and subjective evaluation of the entrepreneur) might be used to draw a more detailed picture. Additionally, dichotomizing the dependent variable has some weaknesses. Furthermore, only a limited number of industry categories have been controlled for. Practical implications – Practitioners might want to emphasize formal strategic planning in order to enhance the probability of performance. Also, they might want to regard the business plan as a management and learning tool rather than as a pure means to generate funding. Originality/value – This paper is the first to analyze different dimensions of strategic planning in small firms simultaneously. Additionally, it is one of only very few studies outside of the Anglo‐American realm, which might be a help especially for European SMEs (small and medium‐sized enterprises). http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Management Research News Emerald Publishing

Strategic planning in smaller enterprises – new empirical findings

Management Research News , Volume 29 (6): 11 – Jun 1, 2006

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References (25)

Publisher
Emerald Publishing
Copyright
Copyright © 2006 Emerald Group Publishing Limited. All rights reserved.
ISSN
0140-9174
DOI
10.1108/01409170610683851
Publisher site
See Article on Publisher Site

Abstract

Purpose – To analyze the performance implications of essential elements of strategic planning (time span, formalization, frequency of control, and use of planning instruments) in smaller enterprises in a simultaneous way. Design/methodology/approach – The main methods being used for this article were a thorough review of literature for the development of hypotheses and a logistical regression analysis for the empirical evaluation. The study is based on a representative sample of small Austrian enterprises ( n = 290). Findings – Planning formalization has a positive and highly significant impact on the probability of belonging to the group of growth firms, whereas other aspects of strategic planning (time horizon, strategic instruments, and control) did not contribute to performance. Research limitations/implications – Employee growth has been used as an indicator for firm performance. Other indicators (e.g. sales growth, profitability, and subjective evaluation of the entrepreneur) might be used to draw a more detailed picture. Additionally, dichotomizing the dependent variable has some weaknesses. Furthermore, only a limited number of industry categories have been controlled for. Practical implications – Practitioners might want to emphasize formal strategic planning in order to enhance the probability of performance. Also, they might want to regard the business plan as a management and learning tool rather than as a pure means to generate funding. Originality/value – This paper is the first to analyze different dimensions of strategic planning in small firms simultaneously. Additionally, it is one of only very few studies outside of the Anglo‐American realm, which might be a help especially for European SMEs (small and medium‐sized enterprises).

Journal

Management Research NewsEmerald Publishing

Published: Jun 1, 2006

Keywords: Strategic planning; Small to medium‐sized enterprises; Business planning; Business performance

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