Performance, A Product of Planning? : Strategic Planning and its Implications among Swedish Manufacturing SMEs

Abstract:

The subject of strategy and strategic planning is widely discussed among researchers, where some scholars argue for a high level of strategic planning (Gavetti, et al. 2005) others suggests a more flexible strategic plan (Mintzberg, 1973). This has created a great diffusion for both researchers and business managers. In order to not enlarge the pool of definitions of strategic planning this study have compare previous definitions of strategic planning and used the most commonly used key characteristics in the definition. This study has also taken environment hostility and organizational structure into consideration. The study has used Swedish SMEs in the manufacturing sector in order to investigate strategic posture, organizational structure, environment hostility and subjective performance. The purpose of this research is to examine organizations strategic posture, under which conditions they are likely to occur and if it has any association to performance. A survey questionnaire was sent to 504 CEOs with 33 items with questions regarding, the constructs above resulting in a response rate of 21.7 per cent. A T-test, regression analysis and a moderated regression was used to analyse the data together with a cross-tabulation. Analysis was done in order to investigate if any strategic posture was preferable in any particular setting, regarding the environment and organizational structure. The result displayed higher performance among more mechanistic organizations. The preferable strategic posture was a more emergent type of strategic planning, but those with high performance used a more deliberate type of strategic planning. In terms of environment it could be concluded that high hostility decreases a firms overall performance.