Impact of Planning and Control Sophistication in Small Business

Authors

  • Harland E. Hodges College of Charleston
  • Thomas W. Kent College of Charleston

Abstract

Significant research has been conducted using numerical measures to establish criteria and determine the relationship between planning sophistication and business success. This research takes a different approach by using a one-on-one interview with closed ended questions to evaluate management perceptions of planning sophistication and its relationship to perceptions of company performance. Our study addresses sophistication in terms of: planning knowledge, time period the plan covers, external/internal considerations, and internal metrics used to measure success. It addresses measurement and control in terms of: goals and objectives, and monitoring frequency. Management's perceptions of how increased knowledge of the strategic planning discipline might impact future company performance are also evaluated. Findings indicate that managers ' perceptions of greater sophistication in their planning efforts are slightly positively related to perceptions of better company performance. Overwhelming evidence is submitted indicating increased knowledge will moderately to significantly impact future company performance.

References

Allen, K. (1995). Launching New Ventures: An Entrepreneurial Approach. Chicago: Upstart Publishing Company

Argenti, J. (1976). Corporate Collapse: The Causes and Symptoms. New York: Halstead Press.

Boyd, B.K., (1991). Strategic Planning and Financial Performance: A MetaAnalytic Review. Journal of Management Studies, 28, 354-374.

Bracker, J.S., & Pearson, J.N. (1986). Planning and Financial Performance of Small, Mature Firms. Strategic Management Journal, (November/December), 503-522.

Chrisman, J.J., & McMullan, W.E. (2004). Outsider Assistance as a Knowledge Resource for New Venture Survival. Journal of Small Business Management, 4(2), 229-245.

Hofer, C.W. (1976). Research on Strategic Planning: A Survey of Past Studies and Suggestions for Future Efforts. Journal of Economics and Business, (Spring/Summer), 261-283.

Lumpkin, G.T., & Dess, G.G. (1995). Simplicity as a Strategy-making Process: The Effects of Stage of Organizational Development and Environment on Performance. Academy of Management Journal, 38(5), 1386-1407.

Mintzberg, (1994), The Fall and Rise of Strategic Planning. Harvard Business Review, (January-February), 107-114.

Miller, C.C., & Cardinal, L.B. (1994). Strategic Planning and Firm Performance: A Synthesis of More Than Two Decades of Research. Academy of Management Journal, 37(6), 1649-1665.

Perry, S.C. (2001). The Relationship between Written Business Plans and the Failure of Businesses in the U.S. Journal of Small Business Management, 39(3), 201-208.

Ramanujam, V., Venkatraman, N., & Camillus, J.C. (1986a). ObjectivesBased Evaluation of Strategic Planning Systems, International Journal of Management Science, (June), 299-306.

Ramanujam, V., Venkatraman, N., & Camillus, J.C. (1986b). MultiObjective Assessment of Effectiveness of Strategic Planning: A Discriminant Analysis Approach. Academy of Management Journal, (June), 347-372.

Rue, L.W., & Ibrahim, N.A. (1998). The Relationship of Planning Sophistication and Performance in Small Businesses Journal of Small Business Management, 36(4), 24-33.

Rhyne, L.C. (1986). The Relationship of Strategic Planning To Financial Performance. Strategic Management Journal, (September/October), 423-436.

Robinson, R.B., & Pearce, J.A. (1983). The Impact of Formalized Strategic Planning on Financial Performance in Small Organizations. Strategic Management Journal, (July/September), 197-207.

Robinson, R.B., & Pearce, J.A. (1984). Research Thrusts in Small Firm Strategic Planning. Academy of Management Review, 9(1), 128-137.

Sarason, Y., & Tegarden, L.F. (2003). The Erosion of the Competitive Advantage of Strategic Planning: A Configuration Theory and Resource Based View. Journal of Business Management, 9(1), 1-20.

Thune, S.S., & House, R.J. (1970). Where Long-Range Planning Pays Off: Findings of a Survey of Formal, Informal Planners. Business Horizons, 13(4), 81-87.

Tossi, H.L., & Gomez-Mejia, L.R. (1994). CEO Compensation Monitoring and Firm PerformanceAcademy of Management Journal, 37(4), 10021016.

U.S. Department of Education. (1970 2003). National Center for Education Statistics, Higher Education General Information Survey (HEGIS), http://nces.ed.gov/programs/digest/d04/t ables/dt04_250.asp

Wijewardena, H., De Zoysa, A., Fonseka, T., & Perera, B. (2004). The Impact of Planning and Control Sophistication on Performance of Small and Mediumsized Enterprises: Evidence from Sri Lanka. Journal of Small Business Management, 42(2), 209-218

Downloads

Published

2006-05-20

Issue

Vol. 17 No. 2 (2006)

Section

Articles

License

The Journal of Small Business Strategy (the “Publisher”) and the Author(s) agree as follows:
 
1.Author(s) hereby grant to Publisher all right, title, and interest in and to the Work, including copyright to all means of expression by any method now known or hereafter developed, including electronic format. If Publisher does not publish the Work within two (2) years of the Effective Date, copyright shall revert back to the Author. Publisher agrees to always credit Author(s) as the author(s) of the Work.
 
2.Publisher hereby grants Author a royalty-free, limited license for the following purposes, provided the Work is always identified as having first been published by Publisher.
    •The right to make and distribute copies of all or part of the Work for use in teaching;
    •The right to use all or part of the material contained in the Work in a book by the Author(s), or in a collection of the Author(s)’s work;
    •The right to use and distribute the Work internally at the Author(s)’s place of employment, and for promotion and any other non-commercial purposes;
    •The right to use figures and tables from the Work for any purpose;
    •The right to make presentations of material from the Work;
    •The right to use and distribute the Work on the Author(s)’s Web site and on the Author(s)’s university’s institute repository;
Such license shall be effective when the Work is first published in the Journal of Small Business Strategy.
 
3.The Author(s) represents and warrants that the Work: (a) is the Author(s)’s original work and that Author(s) has full power to enter into this agreement; (b) does not infringe the copyright or property right of another; (c) contains no materials which is obscene, libelous, defamatory or violates another’s civil right, right of privacy, or is otherwise unlawful; and (d) has not been previously published, in whole or in part. Author(s) shall indemnify and hold Publisher harmless against loss or expenses arising from breach of any such warranties.

How to Cite

Impact of Planning and Control Sophistication in Small Business. (2006). Journal of Small Business Strategy (archive Only), 17(2), 75-88. https://libjournals.mtsu.edu/index.php/jsbs/article/view/73