Strategic planning in growth oriented small firms

Abstract

PurposeThe paper aims to examine the management practices of owner‐managers of small businesses seeking to grow their firms. It seeks to better understand their strategic thinking in relation to internal and external environmental issues.Design/methodology/approachA 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 were analysed using confirmatory factor analysis and discriminant analysis.FindingsFirms 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/implicationsAlthough 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 implicationsThe findings in this paper 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/valueThe literature relating to strategic thinking and behaviour within small firms remains underdeveloped, and this paper provides valuable insights into this area.