Strategic Planning and SMEs Performance: A Developing Country's Perspective

Abstract

Ever-increasing competition, changing environmental dynamics, fear of takeover, acquisition of cutting-odgc technology, insufficient good management, and limited resources force fitms to apply strategic planning to manage such situations and improve firm performance. Based on this, the paper examines how strategic planning influences the firm performance as well as the degree of importance attached to strategic planning by high performers as well as low performers. Data is collected through survey questionnaire from 245 respondents from small and medium enterprises (SMEs) manufacturing. Path analysis shows that strategic planning has a positive and significant impact on timi performance. More specifically, the non-ffinancial aspect of performance showed more influence than financial performance. Digging the matter further, the multi-group analysis revealed no dilTcrcncc across high performers and low performers with respect to the impact of strategic planning on firm performance. This finding has an important implication for managers of both higher and low performers. Managers of low performers firms need to contemplate their strategic planning process and find out as well as rectify any mistakes to avail the associated benefits of strategic planning. Similarly, managers of high performers firms should find out any room of improvement in the process of strategic management to reap the benefits of strategic planning in essence.