Abstract:
The purpose of this study was to assess the impact of strategic planning on performance in small sized enterprises within Thika town. The study was guided by three research questions: what is the nature of the enterprises’ strategic plan, how effectively have the organizations implemented strategic planning and what is the relationship between strategic planning and performance in the firms? The study was descriptive in nature. The population of the study was all the small sized enterprises within the central business district of Thika town. During the research, purposive sampling method was used to collect primary data where business owners, managers and employees from diverse industries, were issued with questionnaires. Quantitative data analysis techniques were used to analyze the findings of the study. Major findings revealed there is a very small percentage difference between the enterprises that have a formal strategic planning process and those that have an informal nature. Lack of information, ineffective training and lack of time were cited as some of the major reasons for failure to formulate and effectively implement strategic planning. It also emerged that most firms do not have clear accounting or financial measures of performance based on the strategic plan. In addition to positive financial performance, other benefits of effective strategic planning that were stated included: customer satisfaction and loyalty, business growth, employee satisfaction, internal efficiency and timely achievement of organizational goals. Based on the findings of the study it could be concluded that strategic management gives the companies a competitive advantage over its competitors. This was mainly from the indication of a positive relationship between the nature of the enterprise’s strategic plan and its performance. However, in addition to strategic planning, other factors such as good customer and employee training need to be maintained in order to achieve good business performance.
