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South African Journal of Economic and Management Sciences

On-line version ISSN 2222-3436
Print version ISSN 1015-8812


GOMERA, Shingirai; CHINYAMURINDI, Willie T.  and  MISHI, Syden. Relationship between strategic planning and financial performance: The case of small, micro- and medium-scale businesses in the Buffalo City Metropolitan. S. Afr. j. econ. manag. sci. [online]. 2018, vol.21, n.1, pp.1-9. ISSN 2222-3436.

BACKGROUND: Arguments are made for strategic planning as an important organisational capability used to realise a firm's goals and objectives. Despite this, conflicting views appear to emerge from the extant literature over the link between strategic planning and financial performance. Notably, within a South African context, a few studies have been conducted ascertaining this relationship especially within small, medium and micro-enterprises (SMMEs). AIM AND SETTING: The study aimed to determine this relationship using survey responses from a sample of 225 respondents classified as owners or managers of SMMEs operating within the Buffalo City Metropolitan in the Eastern Cape Province of South Africa METHOD: Data were analysed through regression and correlation analysis. RESULTS: Findings reveal strategic planning to have a positive relationship with the financial performance of the SMMEs. Furthermore, aspects of strategic planning (formulation, implementation, evaluation and control) were also found to have a positive relationship with financial performance. CONCLUSION: Suggestions for theory and practice are made based on these findings, including how the adoption and usage of strategic planning cannot only be an important organisational capability but also a basis for attaining a competitive advantage within the SMME.

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