Strategy and planning process in the Small Business and the Small & Middle Enterprises (SME) Sector

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7 word format

document in english

management

presentation

date published 14/12/2006

review : not yet assessed

level : Expert

requested 43 times

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Summary

Business planning is perceived by both governments and business support infrastructure, such as the Business Links, to be an essential ingredient to the success of small businesses (Beaver, 2002, p88). Similarly, O’Gorman bases his idea on the fact that one approach to developing a successful strategy could be to engage in a formal planning process (2000, p291). Although planning is frequently used and implemented in large corporations, it relies on different means for coordination and control in SMEs, due to differences in scale. The extensive research on corporate strategy is not relevant for small businesses since they are more driven by new opportunities and strive to minimize their commitment to resources. (Stevenson and Gumpert, 1985, pp86-87).
This paper evaluates the statement of O’Gorman about the impact of planning on a successful strategy for small and medium-sized firms. Firstly, the notion of planning for SMEs in formulating their strategy will be analysed. In a second part, the paper will present the reasons why in reality owner managers of small businesses do not engage as formally as managers of large corporations in the planning process. Finally, the paper will evaluate the considerations presented to clarify the initial hypothesis.