The relevance of strategic planning for entrepreneurial businesses in South Africa

Abstract

The purpose of this research was to investigate the strategic planning processes that are prevalent among South Africa’s small businesses. In particular, the research aimed to confirm that small businesses in South Africa use emergent strategies over prescriptive strategies. The research also aimed to find out how environmental turbulence, growth and the influence of the business owner impacted the level of formalisation of the strategic planning process in the businesses. The research used qualitative data from a non-probability sample. An online survey questionnaire was used to collect the data and various descriptive and variance statistical tests conducted. The report provides evidence that emergent strategies are more prevalent than prescriptive strategies and that small businesses use strategic planning tools and techniques for management purposes. The research also provides evidence that there is a positive relationship between the growth and the level of formalisation of the strategic planning process in a business. The formal strategic planning process is therefore critical for business success. A positive relationship was also observed between the level of education and the level of formalisation and a lack of knowledge of strategic planning tools and techniques may result in the use of an informal planning process.