The Planning Behavior of Small and Medium Enterprises in a Developing Economy: Evidence from Botswana
Zelealem T. Temtime
Download Article | Published On 01/01/2002

Abstract

Business planning determines where an organization is going over the next year or more, how it is going to get there and how it will know if it got there or not. Most studies in small business management focus on financing and organizational problems as the main causes of business failure. However, these problems are rather effects of lack of proper and adequate planning than causes. Although a plethora of research studies (Hopkins and Hopkins, 1994; Boyd and Reuning, 1998: Brews and Hunt, 1986;Fredricson; 1984) were conducted in the past 3 decades, only very few studies (Sawyer, 1993; Elenlov, 1997; Masurel and Smith, 2000) addressed the planning problems of small and medium enterprises (SMEs). Moreover, studies on the planning behavior of SME in developing countries, particularly in Africa, are almost non-existent. The objective of this paper is to explore the planning behavior of SMEs in Botswana and to analyze their attitude towards and perception about business planning in general and strategic planning in particular by collecting data from a sample of 56 small and medium enterprises. Simple descriptive statistics such as statistical rankings, weighted mean and standard deviation are used to analyze the data. The findings suggest that only few SMEs in Botswna engaged in systematic business planning while the majority use intuitive, informal and unstructured business planning, with very little emphasis on strategy formation and formalization. The study also found that there is positive association between business planning and size. Possible ways of changing the attitude and perception of Botswana entrepreneurs toward business planning in general and formalized strategic business planning in particular are suggested.

Keywords

Strategic Planning, Operational Planning. Developing Countries, Small and Medium Enterprises, Planning Behavior

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