Strategic Planning in Growth Oriented Small Firms
International Journal of Entrepreneurial Behaviour & Research, Vol. 15, No. 4, pp. 320-345, 2009
Posted: 14 Dec 2011
Date Written: December, 12 2011
Purpose The study examined the management practices of owner-managers of small businesses who were seeking to grow their firms. It seeks to better understand their strategic thinking in relation to internal and external environmental issues.
Methodology A sample of 204 owner-managers who had indicated their desire for growth was surveyed using a questionnaire developed from earlier research that examined their strategic and operational behaviour. Follow-up discussions over their results were conducted face-to-face. Data was analysed using confirmatory factor analysis and discriminant analysis.
Findings Firms that possessed formal written business plans were found to be more likely to have stronger support network partnerships, formal quality assurance and the ability to lead change among employees. A relationship was found between an above average level of annual sales turnover and the personal vision of the owner-managers.
Research limitations/implications Although the sample was atypical, in that it was comprised of owner-managers who had a growth orientation, the study suggests that owner-managers who have a strong growth orientation are likely to have an enhanced sense of their strategic vision, and the ability to communicate this vision to their employees.
Practical implications The findings suggest that owner-managers from small firms should seek to benchmark their business against industry best practice, but that such benchmarking must be supported by a clear strategic vision and the capacity to communicate this vision to others, particularly employees.
Originality/value The literature relating to strategic thinking and behaviour within small firms remains underdeveloped, and this paper provides valuable insights into this area.
Keywords: Small business, Owner-Managers, Strategic Management, Business Planning, Growth
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