The Impact of Strategic Planning on the Performance of Selected Small-to Medium Enterprises in Zimbabwe

Strategic management and its related processes of strategic planning have proved, over the years, to be very helpful and SME owners/managers can actually harness these tools to propel their entities into the paths growth and profitability. SMEs in Countries like Zimbabwe face many challenges related to lack of strategic planning and, in so doing, fail to realise their full potential as businesses. The study‘s main objective was to investigate the nexus between strategic planning and organisational performance of SMEs through the analysis of various factors of strategic planning which included; organisational objectives, firm‘s structure, resource allocation, implementation and review of plans, environmental scanning and employee participation based on evidence provided by many such SMEs from various sectors of the economy in Zimbabwe. The research adopted a quantitative design and took the form of a survey in which 372 respondents participated from a population of 10000 SMEs in Harare Province through an administered structured questionnaire and the data were analysed using the SPSS analytical tool. Sampling was conducted in a two-stage process in which the first stage involved cluster sampling to take care of the various economic sectors in which the SMEs operate. The second stage involved the use of convenience sampling which helped to identify the individual respondents within each cluster as highlighted above. From the seven stated objectives of the study, data were collected and analysed using both descriptive and inferential statistics techniques in the SPSS tool system which included Correlation, regression, factor analysis and analysis of variance (ANOVA) tests. Results obtained from the study indicate that while strategic planning was not prevalent among most SMEs, its relationship with organisational performance was strong and positive. Correlation analysis outcome indicated a strong link between strategic planning and organisational performance. All the factors of strategic planning (organisational objectives, firm‘s structure, resource allocation, implementation and review of plans, environmental scanning and employee participation) were found to be positively related to organisational performance of SMEs. The results further reveal that, while most SMEs were aware of the importance of strategic planning, most of them did not or were reluctant to practice strategic planning and this can be a subject for a further study including the role of leadership ability in the SMEs business and the impact of laid down policies and procedures on the performance of SMEs as well.