Is Informal Planning the Key to the Success of the Inc. 500?
AbstractA review of the research on planning indicated that formal planning might be unnecessary for small, fast-growing companies. Many small, flourishing companies are operating with no written business plan. This study surveyed INC. 500 CEOs to investigate their view on the importance of informal and formal planning practices. The CEOs were asked about the time spent on formal and informal planning for the fundamental business functions (marketing, finance, human resource, operations management, supply chain management, information technology, legal issues, social responsibility, and management). The findings indicated that INC. 500 CEOs spend more time on informal planning than formal planning. When involved in informal planning, CEOs spend significantly more time on management, marketing, operations and finance than the other business functions. When involved in formal planning. CEOs spend significantly more time on the same four business functions as informal planning (though the order is slightly different). The study concludes that both informal and formal planning are vital and necessary for small business success. Knowing when and what to do in both areas of planning is essential.
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