Strategic planning practices of small scale enterprises

Abstract

Although there is some evidence to suggest that small scale enterprises also make strategic plans, there is still a lot of suspicion about its usefulness for small firms. The basic question is that given their level of operations and resource structure what kind of planning is possible in small firms. This study covering 117 small scale enterprises located in Ahmedabad attempts to answer some of the questions related to strategic planning practices of such firms. It is observed that most of the firms do undertake analysis of the constituents of the environment such as suppliers of materials, customers and implications of government policy changes. They also undertake analysis of their own strengths and weaknesses. Their planning horizon, however is limited to six months. It appears that considering their limited level of operations, and need to respond to environmental forces rather quickly, there is need to have speed and flexibility in planning and it may be because of this reason, at least partly that their plans are for short periods. Also there could be lack of awareness of the usefulness and importance of systematic planning. The paper also reports findings on the sources of information, frequency of review and related matters.