Factors affecting adoption of strategic planning by SMEs: a case of hardware shops in Nakuru town
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Date
2014-06-26
Authors
Waihenya, Jemimah W
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Abstract
This study sought to investigate factors affecting adoption of strategic planning by SMEs in Nakuru Town. It was guided by three objectives namely to determine organizational factors affecting adoption of strategic planning; to determine resources which affect adoption of strategic planning and to investigate strategic leadership factors influencing adoption of strategic planning by SMEs in Nakuru Town. This study used a descriptive survey research design. The target for this study was all SMEs owners and employees in Nakuru Town. There are 63 licensed hardware shops in Nakuru Town according to Nakuru County Licensing department. Simple random sampling was used to select respondents from each of the hardware shops. This study sampled 20% of the hardware shops in Nakuru Town. The average number of permanent employees in the hardware shops is five (5) and 20% of the hardware shops are 13. Most of the hardware shops are owner managed hence one (1) owner per hardware shop participated in the study. The sample size for the study was therefore the average number of employees in the hardware shops multiplied by number of sampled hardware shops. The sample size of the study was 78 respondents. This study used both primary and secondary data. Primary data was collected using semi-structured questionnaires. Questionnaires were administered by the researcher on the spot. Data collected was coded and analyzed using both qualitative and quantitative methods. Qualitative data from open-ended questions was analyzed using content analysis. Descriptive statistics such as frequencies, percentages and mean scores were used to analyze quantitative data. Results were presented in tables and charts. The study established that resources allocation affects strategic planning to a great extent. The organizational factors influenced strategic planning to a moderate extent. The study revealed that to a little extent there is inability to manage change effectively and lack of alignment between culture and strategy of organization. The study established that strategic leadership embraced strategic planning to a moderate extent. In the comparison of resource allocation, organization culture and strategic leadership as drivers of strategic planning and implementation, the study revealed that strategic leadership of the organization to a great extent is a driver of strategic planning and implementation. Allocation of resources in the organization and culture of the organization to a moderate extent are drivers of strategic planning and implementation. This study concluded that resources form a critical part of strategic planning adoption and implementation. It is important for SMEs to allocate enough resources and develop their human resource to support strategic planning and adoption. The size and nature of organization's workforce and the industry that SMEs operate in determines their strategic planning adoption and implementation. This shows the need to have enough employees with the necessary skills and competency. Strategic leadership have key responsibilities that coordinate all units and elements of an organization and determine its operation. In comparison with resources and organizational factors, strategic leadership factors to a great extent take the lead as drivers of strategic planning adoption and implementation. The strategic leadership factors can therefore be termed as the most important driver influencing strategic planning and adoption. This study recommends that SMEs should embrace strategic planning practices by allocating enough resources towards this course and developing capacity of their employees to support it. The SMEs should allocate resources not only to achieve short-term goals but also focus on long-term growth
Description
Department of Business Administration, 65p.2014