Strategic planning among Small and Medium enterprises in Nairobi county
Strategic frameworks and tools of analysis have been the subject of much academic debate over the last three decades. Strategic planning is one of these frameworks and tool which is a step-by-step process, ongoing and results-oriented roadmap that enables an organisation to achieve its mission and vision. Numerous articles in academic publications as well as practitioner-oriented journals have emphasized the importance of strategic planning, not only for large firms but for small businesses as well. Despite the importance of strategic planning in enabling businesses to handle challenges arising from their environment and thus enhancing competitiveness, the reasons why some Small and Medium Enterprises (SMEs) engage in strategic planning while others do not is generally not well understood yet SMEs play a major role in economic development in almost all world economies including Kenya. The purpose of the study was to investigate strategic planning practices and the factors that influence strategic planning in SMEs in Kenya. The study was a cross-sectional survey which used both qualitative and quantitative data where primary was used. Primary data was gathered by way of questionnaires. The population of the study were owners and key employees drawn from SMEs operating in Nairobi County. The study sample was 387 SMEs where the owner or key employee was administered with a questionnaire. Descriptive statistics was used to analyse the data and the results presented in form of figures and tables. The study has found that majority of the SMEs surveyed had adopted components of strategic planning to a great extent. The study found that SMEs had in place visions, missions, goals and targets, and undertook business performance evaluation. The study also found that specialised expertise (education, business training and management expertise), size of firms (number of employees and annual turnover) facilitated strategic planning. On the other hand lack of financial and time resource were found to be barriers towards strategic planning in the SMEs surveyed. The study recommends identification and categorisation of the factors influencing strategic planning to enable enhancement of those that facilitate them and mitigation on the influence of the barriers. The study also recommends increased investment into the SME sector in form of technical and financial support.