Effects of Strategic Planning on Small Scale Enterprise (a Case Study of Microfinance Bank)
CHAPTER ONE
Objectives Of The Study
The objective of this study can be stated as follows:
- To evaluate the role of small scale in economic development
- To justify the contribution of small scale business to economic development
- To identify the relationship between small scale and unemployment rate in Nigeria
CHAPTER TWO
LITERATURE REVIEW
INTRODUCTION
CONCEPTUAL FRAMEWORK
This aims at explaining the major issues of the study and giving a detail of the objectives intended to be achieved. From the mid seventies we can note that scholars makes the distinction between small and large businesses in terms of needs, level of sophistication and range of strategic planning. Bracker and Pearson (1986), Rue and Ibrahim (1998), Perry (2001) and Wijewardena, Zoysa, Fonseka and Perera (2004) all formulate definitions of strategic planning which take the uniqueness of small businesses into account and allow for the fact that small businesses cannot draw on management and material resources in a manner similar to that of large organizations.
Empiric studies’ findings indicate at a correlation between strategic planning and performance. Nevertheless, the findings are mixed. A survey of twenty-six experimental studies enabled Miller and Cardinal (1994) to identify a significant positive connection between strategic planning and small business performance.
Robinson (1982) found a significantly high level of profitability as well as an increase in sales and returns on sales and the number of full time employees in a group of small businesses that employed external consultants for the purpose of strategic planning. Compared with other businesses, Bracker and Pearson (1986) discovered a significant increase in income and remuneration per entrepreneur in businesses that prepared strategic plans (the highest of four designated levels of strategic planning). No significant increase was detected in the measure salary expenditure divided on the sum total of sales. A significant differentiation in the rate of sales increase was found by Rue and Ibrahim (1998) in small businesses that incorporated written planning (basic or sophisticated), as opposed to other businesses.
Perry (2001) detected a significant differentiation in the degree to which planning was conducted in small businesses that did not applied for bankruptcy as opposed to those that did. Wijewardena et al. (2004) define three levels of planning: no written planning; basic planning; and detailed planning. The findings indicate that the level of planning stands in direct proportion to the level of increase in sales. Yusuf and Saffu (2005) classify three levels of planning: low; moderate; and high. A connection was found between increase in sales and the low level of planning. No correlation was found between strategic planning and increases in market share or in profitability.
One early definition of strategy was provided by American business historian, Alfred D. Chandler (1962), as the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out those goals.
Chandler subscribes to the view that strategy is as much about defining goals and objectives as it is about providing the means for achieving them.
Another contributor, Kenneth Andrews (1987), also combines goal-setting with the policies and plans needed to achieve goals. In his definition of strategy he distinguishes between corporate strategy, which is the lead strategy, and business strategy, a secondary,though vital, aspect of corporate strategy. Andrew defines strategy as a pattern of decisions… (Which represent) … the unity, coherence and internal consistency of a company’s strategic decisions that position a company in its environment and give the firm its identity, its power to mobilize its strengths, and its likelihood of success in the market place.
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
This chapter focuses on the design of the research and method which will be adopted in gathering the needed data. Areas also covered under this chapter include description of data analysis instrument, validity of the research Instrument and sampling plan description of data analysis which will be pertinent in this research work.
Research Design
In order to conduct a well planned and executed research work a research design is required . it is used by the researcher as a scheme of a blues print for data collection prior to the actual study. For the purpose of this research, the survey research is use which concerned with identifying real nature of problem and formulating relevant hypothesis to be used.
CHAPTER FIVE
SUMMARY. CONCLION AND RECOMMCND ATIONS
INTRODUCTION
This chapter presents a summary of the study findings, conclusion of the study, suggestions and vital recommendations and suggestions for further research. It summarizes findings in relation to major issues raised with respect to the objectives of the study.
SUMMARY OF FINDINGS
This chapter summarizes the research findings and offers conclusions drawn after the data collected was analyzed. This was done in relation to the objectives of the study and their corresponding research questions. There are also recommendations of the research and suggestions on areas of future research on this particular research problem.
The researcher wanted to understand the need for strategic planning in an organization and all respondents felt there was a need for strategic planning in an organization to in order to achieve corporate organizational goals. From the findings it was also evident that effective strategic planning provides unity of purpose for all employees to steer towards achieving organizational objectives.
CONCLUSIONS
From the findings of the research carried out, the researcher concludes that strategic planning is very vital tool which should not be taken for granted. An organization which needs to excel must use strategic planning to gain competitive advantage over competitors. Strategic planning is applicable to all organizations regardless of their size and scope of operations.
The management of the organizations should establish the need for strategic planning in their respective organizations and formulate policies and budgets for achieving organizational goals. By establishing the need for strategic planning, the management will collectively work towards achieving the corporate objectives of the firm.It is evident that the firms that use strategic planning perform better compared to those don’t and therefore managers should understand that strategic planning provides direction to the overall organization in achieving corporate goals.
RECOMMENDATIONS
After an in depth analysis of the findings and looking at the conclusions, the study can firmly recommend the following aspects to be put in place in order to ensure effective strategic planning in an organization.
The management should establish the need for strategic planning by defining the corporate goals and formulating policies which acts as a guide in decision making. The management should conduct industry analysis to understand its industry and its competitors which will greatly help the organization formulate strategic plans for achieving its corporate goals.
Strategic planning provides firms with competitive edge over those who do not use strategic planning. Strategic planning provides overall organizational direction towards achieving corporate goals. It is evident that firms which use strategic planning are more financially stable and have larger market share in their respective industries. If you fail to plan then you are planning to fail.
SUGGESTIONS FOR FURTHER RESEARCH
Due to time constraints and resources, this research is not conclusive as such. It is imperative that a further research be undertaken in this area of study in order to find solutions to new and emerging problems.
There is need for further research on the impact of strategic planning on organizational performance and survival.
REFERENCES
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- Al-Ghamd, (1998) Associate professor of Management department of management and
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- Definitions of strategic planning. Woodward Davis Associates.
- James L. Mercer (1991) Strategic Planning for Public Managers Quorum Books. NewYork.
