Strategic planning practices: The antecedents and business perfomance outcomes in Zimbabwean Small to Medium Enterprises (SMES)

Abstract

Despite Zimbabwe sharing with the rest of the world, the notion that SMEs are the impeccable engines to economic revival, growth and development, many of the nation`s SMEs are plagued with high failure rates, a phenomenon which motivated the need to carry out this study. Previous studies carried out in most foreign countries suggested that the high failure rate of SMEs was attributable to lack of strategic planning among a host of other factors. Notwithstanding the globally acknowledged efficacy of strategic planning towards business performance of SMEs, there is little evidence indicating whether Zimbabwean SMEs practice strategic planning and how their engagement in strategic planning impact the firms` business performance. The focus of this study was, therefore, on ascertaining the driving factors of strategic planning practices in Zimbabwean SMEs and also to establish the impact of strategic planning on business performance of these enterprises. This study hinged on the positivist research philosophy and a quantitative approach was adopted where proportional stratified random sampling was used to sample 150 SMEs operating within the Harare Metropolitan Province. The unit of analysis was the owners and managers of the sampled SMEs, who were purposively chosen for their superior knowledge of strategic planning practices of SMEs. Data was collected using self-administered structured questionnaires. The collected data was then coded and analyzed using Statistical Package for Social Sciences (SPSS) version 23. This study confirmed that the four perceived driving factors (globalisation, business ownership motivations, environmental dynamism and innovation & technological advancement) had a positive and statistically significant influence on the adoption or practice of strategic planning among SMEs. In addition, the study partially confirmed the claim that adoption or practice of strategic planning has a positive impact on business performance of SMEs. Only two strategic planning factors (environmental scanning and strategy implementation) showed that they had positive and statistically significant impact on business performance of SMEs. It was on this basis that the study recommended SME owners/managers to prioritize the scanning of environment and strategy implementation in order to enhance business performance of their enterprises.