Archive for November, 2013

Implication of the Study on Policy, Theory and Practice
This study not only contributes more empirical data to existing research on the role of strategic planning and performance of SMEs, but also more importantly gives remarkable guidance in terms of strategic planning activities to the owners and managers of SMEs. Secondly, based on the strategy making modes, managers can learn to involve employees in the strategic planning process, analyse internal and external environments with the aim of identifying and strengthening key capabilities and investing in information technology to facilitate generation of information for decision making. Thirdly, development of long- and short-term budgets and targets facilitates implementation and control, and acts as a performance management tool. Read the rest of this entry »

Strategic Planning and Competitive Advantage of ICT Small and Medium Enterprises in Kenya: Data Analysis continue, Conclusiona. Dependent Variable: Competitive Advantage

b. Predictors: (Constant), Strategic Planning

Further analysis as shown in Table 4 shows the beta coefficient parameters of the test of the significance of the constant Jjt, and x± in the model y1 = The results indicate an insignificant constant of =1.251 and a p =01143. The coefficient ^ = &.109 suggests that for a unit change in strategic planning practices, there is 0.109 positive change in the competitive advantage of a firm. Further, it is observed that the strategic planning variable is significant as the p Tfalue = ЕШЕШ1 is less than the level of significance =0.05. This suggests that strategic planning is a variable that could be used to assess the competitive advantage of a firm.

Similar studies by Lieldholm, 2001; and Kargar and Parnell (1996) concluded that strategic planning is a source of competitive advantage and that the sector in which a firm operates significantly explains comparative advantage of the industry. This suggests that strategic planning has a significant positive effect on organisational performance (Andersen, 2000). Read the rest of this entry »

Statistical Modelling – Competitive Advantage versus Strategic Planning

The study continued to examine the extent to which strategic planning correlated with firm competitive advantage. This served to address the main objective of the study. Figure 2 shows a scatter plot of the two variables that suggests a positive linear relationship between firm competitive advantage and strategic planning practices. This means that a firm achieves a higher competitive advantage with a higher level of strategic planning practices.

Based on the scatter plot revelation, a linear regression analysis was carried out to determine the nature of the relationship between a firm’s competitive advantage and strategic planning. The results indicate a positive, moderate linear relationship with a correlation coefficient of r=0.412. The coefficient of determination r2, which measures the goodness of fit was determined as r2 =0.170, which means that 17% of the corresponding change in the firm competitive advantage can be explained by the model;^ — These analyses are shown in Table 2. Read the rest of this entry »

Strategic Planning and Competitive Advantage of ICT Small and Medium Enterprises in Kenya: Methodology continueThe target population was 238 ICT SMEs in Nairobi drawn from the Computer Society of Kenya (CSK) and the 2010 Mocality Directory of Kenya (MDK). Firms under study were in the business of software development, internet services, software consultancy, hardware assembly and repairs, and back office operations (call centres and business process outsourcing). The small firms employing 10-100 persons were chosen for the study and stratified into age as shown below Both qualitative and quantitative data were collected through primary and secondary data sources. Both forms of data were required, to gain a deeper insight and a better interpretation of the quantitative data. The current study utilised a questionnaire and interview guide as used in various previous research projects (Lumpkin and Dess, 2001; Lumpkin, 1998). The questionnaire consisted primarily of close-ended questions presented on a five-point Likert type measurement scale. The primary data was key to the current research as it provided information that addressed the research objectives. Read the rest of this entry »

This study was guided by the conceptual framework in Figure 1 below which also shows the operationalisation of the study variables. This model is based on the basic premises of the strategic planning proposed by Berry (1998). Berry (1998) argues that whether formal or informal, strategic planning is carried out and that substantive analytical elements of the process include; scanning the environment; analysing competitive activity; assessing strengths and weaknesses; developing long term objectives and short term operational plans; and reviewing and revising plans. Similarly, the way in which the strategy implementation process is organised will very likely have an influence on competitive advantage. H0: There is no significant relationship between strategic planning and competitive advantage. The hypothesis highlights the relationship between strategic planning (processes and actions) and competitive advantage. Read the rest of this entry »

Strategic Planning and Competitive Advantage of ICT Small and Medium Enterprises in Kenya: The Kenya SMEs SectorSmall and Medium Enterprises are considered as the most prolific source of employment, with the ability to spread investment across the country (Sessional Paper No.2, 2005). The sector is noted a provider of goods and services, and a driver in promoting competition and innovation, enhancing the enterprise culture necessary for private sector development and industrialisation (Republic of Kenya). Likewise, the SMEs sector employs 74% of the labour force and contributes over 18% of the country’s GDP. In Kenya, a small enterprise consists of those firms with 10-50 employees, annual turnover of between 6,000 USD and 60,000 USD and investment of between 60,000 USD and 240,000 USD. A medium-size enterprise would have 50-100 employees, annual turnover of between 60,000 USD to 10,000,000 USD.
Since Independence, the government has recognised the potential of the Small Enterprise (SE) sector in employment and poverty reduction. This objective has been outlined in Sessional Paper No. 1 of 1986 on Economic Management for Renewed Growth, Sessional Paper No. 2 of 1996 on Industrial Transformation to the year 2020, the Sessional Paper No. 2 of 2005 on the development of MSEs for Employment and Wealth Creation (Republic of Kenya 1986, 1996, 2005). It recognised the need to establish and maintain a conducive environment for the graduation of SMEs to have more capacity to produce high quality products and create sustainable employment opportunities. Read the rest of this entry »

While planning in large organisations has been researched extensively, resulting in many prescriptions, models and concepts (Jennings and Beaver 1997), the use and application of the planning process in small firms is still the subject of on-going debate (O’Neill, Saunders and Hofman 1987). Pushpakumari and Athula (2008), argue that SMEs often do not have the means to ensure continuous successful implementation of strategic planning as they maintain lower levels of resources, have limited access to human, financial and customer base and less-developed management capacity and administrative systems. Research findings reveal that, generally, funding remains a necessary but not sufficient condition for a viable SME development. Management problems that manifest in many ways like: lack of capacity; lack of clear vision; lack of business plans and business strategy; and poor strategy implementation are critical for the performance and survival of SMEs (Gerber, 2001). According to Antony and Onugu (2005), unlike large enterprises, SMEs are characterised by their flexibility, responsiveness, pursuit of opportunities, risk- taking, innovation, unconventional thinking and creativity. According to RBV, chaos and contingency theories these are strategic resources that can be exploited by SMEs to adapt to the ever changing environment and to become more competitive and responsive to customer needs and requirements. Read the rest of this entry »

Strategic Planning and Competitive Advantage of ICT Small and Medium Enterprises in Kenya: IntroductionAccording to Raduan, Jegak, Haslinda and Alimin (2009), a business that does something that is distinctive and difficult to replicate is competitive advantage and is likely to be more profitable than its rivals. Pearce and Robinson, 2011; Schwenk and Shrader , 1993; Raduan et al. 2009) assert that from a resource-based view, strategic planning can result in strategic change which may increase strategy-environment fit, hence can become a source of sustained competitive advantage especially when strategic planning system improves flow of products and services between manufacturers and users.
Metcalfe, Ramlogan and Uyarra (2003) argue that competitiveness is embodied in the characteristics of the firm namely; (a) the current efficiency and effectiveness of the use of resources; (b) the willingness and the ability to relate profitability to growth of capacity (c) the ability to innovate to improve technology and organisation and thus improve efficiency and effectiveness. Read the rest of this entry »

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