Title: Strategic business planning and success in small firms

Authors: Sascha Kraus, Rainer Harms, Erich Schwarz

Addresses: Helsinki University of Technology, Finland; University of Liechtenstein, Furst-Franz-Josef-Strasse, LI-9490 Vaduz, Liechtenstein. ' Department of Innovation Management and Entrepreneurship, University of Klagenfurt, Universitatsstrasse 65-67, A-9020 Klagenfurt, Austria. ' Department of Innovation Management and Entrepreneurship, University of Klagenfurt, Universitatsstrasse 65-67, A-9020 Klagenfurt, Austria

Abstract: This paper attempts to identify the degree and the methods of strategic business planning in small enterprises. A broad literature review on strategic planning in small enterprises in entrepreneurship and strategy journals within the last 25 years reveals that strategic planning in small enterprises is still in its infancy, and the reports of its relationship regarding success are not consistent. This literature review serves as a starting point for the development of hypotheses. Using a sample of 248 small Austrian enterprises from various industries, we test if the time horizon of strategic plans, the degree of formalisation, the use of strategic planning instruments and the frequency of control relate to firm performance. We discover that the degree of formalisation has a positive, and highly significant, impact on firm performance. As a result, this paper seeks to provide a new conceptual definition of strategic planning in small enterprises.

Keywords: strategy; strategic planning; business plans; small enterprises; literature review; small firms; entrepreneurship; Austria; SMEs; small and medium-sized enterprises.

DOI: 10.1504/IJEIM.2008.022311

International Journal of Entrepreneurship and Innovation Management, 2008 Vol.8 No.4, pp.381 - 396

Published online: 31 Dec 2008 *

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