Strategic Planning in Micro Businesses: Adapting the Strategic Clock for Micro Firms

Transcription

1 Haselwanter, S., Muskat, B. & Zehrer, A. & (2016). Strategic Planning in micro businesses Adapting the strategic clock for micro firms. EURAM 2016, Manageable Cooperation? Paris, France, 1 4 June Strategic Planning in Micro Businesses: Adapting the Strategic Clock for Micro Firms EURAM Conference 3rd June 2016 Paris, Université Paris Est-Créteil Stefanie Haselwanter Birgit Muskat Anita Zehrer

2 Overview Strategic Planning & Strategic Planning Tools Strategic Planning in Micro Businesses Research Questions Influencing Factors The Strategic Clock for Micro Businesses Conclusion

3 Strategic Planning Organization uses strategy to deal with changing environments (Chaffee, 1985, 89). Mintzberg differentiates (1994): Prescriptive paradigms of strategy Descriptive paradigms of strategy Chaffee (1985, 89) on categorizing strategy: Linear strategy models Adaptive strategy models Interpretive strategy model Formulation of organizational level plans which set the broad and flexible objectives, strategies and policies of a business, driving the organization towards its vision of future (Stonehouse & Pemberton, 2002, 854).

4 Strategic Planning Tools Strategic tools encompass the full range of approaches, concepts, ideas and techniques (Knott, 2008, 86) which are applied to structure or influence the process of strategic thinking and decision-making in the context of strategy activity. Source: Tassabehji and Isherwood, 2014

5 Strategic Planning in Micro Businesses Research Gap Focus on larger firms in strategic planning literature (O'Regan and Ghobadian, 2002; Knott, 2008; Lisinski and Saruckiy, 2010; Tassabehji and Isherwood, 2014)) Micro business are a rather new area of research (Kelliher & Reinl, 2009) and there is an existing deficiency of studies, especially on strategic planning in micro businesses (O'Regan and Ghobadian, 2002; Lisinski and Saruckiy, 2010). Intuition vs. Rationality?

6 Research Questions Which factors influence strategic planning in micro businesses? How can strategic tools (e.g. the strategic clock) be applied in micro businesses for strategic planning?

7 What are Micro Businesses? Micro firms have less than 10 employees and an annual turnover/balance sheet total with less than EUR 2 million (European Comission, 2007).

8 Relevance of Research on Micro Businesses 99,8% of all enterprises in the EU28 are SMEs (Eurostat, 2011) 92,7% of these SMEs are micro businesses (Eurostat, 2011) Micro businesses have a high relevance for local economies (Bridge, O Neill & Cromie, 1997; Liedholm & Mead, 2012) High failure rate

9 Strategic Planning for Micro Businesses Strategic planning helps reducing high failure risk (Pe er, Vertinsky & Keil, 2014) Strategic planning is vital for long-term success (Kelliher & Reinl, 2009; Pe er, Vertinsky & Keil, 2014) But we need to have a strategic tool that is easy to handle and costs less time. We need to adapt strategic tools designed for large firm context and adapt them for micro businesses (Brinckmann, Grichnik and Kapsa, 2010; Delmar and Shane, 2003; O'Regan and Ghobadian, 2002).

10 Influencing Factors why Micro Businesses are different? Prominent role of the owner-manager in decision-making No separation of ownership & management (Carson, 1990; Culkin & Smith, 2000; Greenbank, 200b; Musso & Francioni, 2012) Entrepreneurial orientation (Carland et al.,1984) and intuition (Allinson, Chell & Hayes, 2000) Emotions, personality, prior experiences, skills & competencies (McKercher & Robbins, 1998; Musso & Francioni 2012) Structural and size-related factors of micro firms Limited financial & human resources (Greene, Brush & Brown, 1997) Smaller market share (Carson, 1990; Zehrer, 2009) Operation orientation of micro firms Rather daily business oriented (Penrose, 1959) Not aware of strategic competitive advantages (Barnes et al., 2012) Lack of market knowledge (Carson, 1990)

11 Proposition Adaptation of existing strategic tools for the needs of micro businesses: Perceived Product/service benefit Easy to handle Costs less time Flexible Market-oriented Price Source: Bowman and Faulkner, 1997, p!!

12 The Strategic Clock for Micro Businesses Perceived Product/service benefit Price Source: Adapted from Bowman and Faulkner, 1997

13 Conclusion Which factors influence strategic planning in micro businesses? How can strategic tools (e.g. the strategic clock) be applied in micro businesses for strategic planning? Future Research: Empirical studies are required to validate or modify the assumptions Investigation of more potential influencing factors on strategic planning in micro business

14 Thank you - we welcome your Feedback! Stefanie Haselwanter MCI Management Center Innsbruck Catholic University Eichstätt-Ingolstadt stefanie.haselwanter@mci.edu Birgit Muskat MCI Management Center Innsbruck birgit.muskat@mci.edu

15 References Barnes, D., F. Clear, R. Dyerson, G. Harindranath, L. Harris and A. Rae, 2012, Web 2.0 and microbusinesses: an exploratory investigation. Journal of Small Business and Enterprise Development, 19(4): Bowman, C. and Faulkner, D., 1997, Competitive and Corporate Strategy. London: Irwin. Bridge, S., K. O Neill and S. Cromie, 1998, Understanding Enterprise, Entrepreneurship & Small Business. Hampshire: MacMillan. Brinckmann, J., D. Grichnik and D. Kapsa, 2010, Should entrepreneurs plan or just storm the castle? A meta-analysis on contextual factors impacting the business planning performance relationship in small firms. Journal of Business Venturing, 25(1): Carson, D., 1990, Some exploratory Models for assessing small Firms Marketing Performance. European Journal of Marketing, 24(11): Chaffee, E. E., 1985, Three models of strategy. Academy of Management Review, 10(1): Culkin, N. and D. Smith, 2000, An emotional business: A guide to understanding the motivations of small business decision takers. Qualitative Market Research: An International Journal, 3(3): Delmar, F. and S. Shane, 2003, Does business planning facilitate the development of new ventures? Strategic Management Journal, 24(12):

16 References European Commission, EUR-Lex. Access to the European Union Law. retrieved EUROSTAT, Key figures on European business: With a special feature on SMEs. Luxembourg: Pocketbooks. Greenbank, P., 2000a, Training micro-business owner-managers: a challenge to current approaches. Journal of Educational Industrial Training, 24(7): Kelliher, F. and L. Reinl, 2009, A resource-based view of micro-firm management practice. Journal of Small Business and Enterprise Development, 16(3): Knott, P., 2008, Strategy tools: who really uses them? Journal of Business Strategy, 29(5): Liedholm, C. E. and D. C. Mead, 2012, "Small Enterprises and Economic Development: The Dynamics of Micro and Small Enterprises". Routledge Studies in Development Economics. Hoboken: Taylor and Francis. Lisinski, M. and M. Saruckiy, 2010, Principles of Strategic Planning Methods. Journal of Business Economies and Management, 7(2): McKercher, B. and B. Robbins, 1998, Business Development issues affecting nature-based Tourism operators in Australia. Journal of Sustainable Tourism, 6(2): Mintzberg, H., 1994, The rise and fall of strategic planning. London: Prentice-Hall.

17 References Musso, F. and B. Francioni, 2012, The Influence of Decision-Maker Characteristics on the international strategic Decision-Making Process: An SME Perspective. Procedia Social and Behavioral Sciences, 58: O'Regan, N. and A. Ghobadian, 2002, Effective strategic planning in small and medium sized firms. Management Decision, 40(7): Pe'er, A., I. Vertinsky and T. Keil, 2014, Growth and survival: The moderating effects of local agglomeration and local market structure. Strategic Management Journal: in press. Penrose, E., 1959, The theory of the growth of the firm. Oxford: Oxford University Press. Stonehouse, G. and J. Pemberton, 2002, Strategic Planning in SMEs +/- some Empirical Findings. Management Decision, 40(9): Tassabehji, R. and A. Isherwood, 2014, Management Use of Strategic Tools for Innovating During Turbulent Times. Strategic Change, 23(1-2): Zehrer, A., 2009, Service experience and service design: concepts and application in tourism SMEs. Managing Service Quality, 19(3):

18 Back-Up Slides

19 Limitations Increasing awareness of strategic planning and the use of strategic planning tools for micro businesses Conceptual paper empirical studies are required to validate or modify the assumptions Investigation of more potential influencing factors on strategic planning in micro business