The Impact of Formal Strategic Planning on Corporate Performance of Small and Medium Enterprises in Zimbabwe

Abstract

This study examines the impact of strategic planning on the performance SMES in Harare. This study used a mixture of research methods combining the qualitative and the quantitative approaches. The major challenges of SMEs in Harare are based on the adoption and implementation of the strategic planning programmes. SMEs in Zimbabwe contribute significantly to the growth and development of the economy. The survival and profitability of SME businesses remains glaringly unstable with little support from the government. Employing permanent marketing personnel was seen as costly thereby compromising performance. It also emerged in the study that competition from both SMEs and large companies impacts negatively on the performance of the SMEs. SMEs usually do not employ qualified personnel to do their books of accounts thereby compromising performance. It also emerged in this study that the SMEs lacked networking with stakeholders. To this effect, the study found that planning, one of the key function of management was not being practiced. Formal Strategic planning was regarded as time consuming. The adoption of e-commerce in the SMEs was found to be absent. This is due to lack of computer literacy amongst the managers and owners of the manufacturing SMEs. The study found out that most of the SMEs lacked adequate infrastructure especially the buildings for doing their businesses. SMEs entrepreneurs should go by the book in planning for their businesses in order to enhance growth, a phenomenon which is still absent in the sector. Formal Strategic Planning, although it constitute an indispensable part of business management, is absent in most SMEs because of lack of necessary skills. The study concludes by recommending that training interventions should be instituted through vocational training institutions, local universities and Technical Colleges which should design short courses in business management tailor-made for the requirements of the owners and managers of the SMEs.