1.1 Background the of the study
The sole aim of every business is to make profit and attain growth. Small and medium scale enterprises play a very important role in a nation’s economy. This is true for both develop and developing countries. Small and medium scale enterprises also constitute a high proportion of a nation’s business activities and generate more employment opportunities than the large corporations on recent years.
Tajudin Ramli, the chairman of Apec (Asia Pacific Economic Corporation) Business council, emphasized the importance of small and medium scale enterprise in his remark in Australia: He states that “small and medium scale enterprise represent 80 to 90 percent of business in each Apex economy and are by far the largest providers of employment. For business to survive and attain growth, and owners/managers of the business need to plan strategically. Business planning has significant effect to the survival and well-being of small enterprise of all types specially in times of economies crucial role in small firm’s success and survival. According to Tapinos (2005) state that strategic planning consist of planning process that are under-taken in firms to develop different strategies which might contribute to performance past studies that examined successful small firms have also pointed out that well-developed. Soundly implemented and properly controlled planning process contributes to a firm’s success (Bracker 1986).
Growth is often viewed to be necessary for survival (Davidson 1991), but some findings have proved that, there are entrepreneurs who do not pursue growth, survival is often enough for them (Delmar, 2008). According to Poutziouris (1999), states that “growth oriented owners/directors” aim at increasing business size and becoming owners of large and successful businesses, whereas survival oriented managers do not aim a these previous research has extensively studied the effects of these strategic orientations on small firms actual growth and performance.
It is felt that strategic planning, a key pillar for corporate survival, may be adopted and applied to ensure better small and medium scale enterprise performance. Despite all these past studies on strategic planning small and medium enterprise is still faced with same special problems and challenges. Anthony Robbins, the most famous neuro linguistic programming specialist, once remarked “To keep on doing the same thing and expect a different result is a form of insanity” therefore, the essence of this work is to look at what strategic planning plays.
1.2 Statement of the problem
The growth of any business organization can be determined by the strategic planning organized by management for the survival of that organization small and medium scale enterprise are very vulnerable, and their failure rate is very high so high that no nation can afford to ignore. The business statistic of Nigeria observed that “60 percent of existence”. Also empirical studies have established that the first one to three years is the most critical time for new firms as regards their survival and possibility to die is much bigger for small business than larger firms (Davidson 1991).
Small and medium scale enterprises are good performer with good sales, healthy profit and strong cash flow. Beneath the good exterior, there may be some problems brewing away, which are contingent to the business activities of the enterprise and the ambitions of the entrepreneurs. Symptoms to the eventual problems could be over-expanding and over diversification leading to over-stretching of management and resource.
Additionally, most survival small and medium scale enterprise could be in mediocre performance levels, even good performers of today can fall tomorrow, as exemplified by chief executive officer of Hewlett Packard, what make us highly successful this year could be our downfall “next year”. Despite all the past research on strategies might have planned. Therefore the essence of this work is to examine the role of strategic planning to small and medium scale enterprises.
1.3 Purpose of the study
The purpose of the study includes the following:
1.4 Research questions
1.5 Research hypotheses
Spiegel (1999:28) defined hypothesis as a way of comparing two things using an assumption which may or may not be true. This study contains the research hypothesis formulated and given as:
1.6 Significant of the study
This study is of significance in the following ways:
1.7 Scope of the study
This research was made to cover small and medium scale enterprise in Uyo, Akwa Ibom State with particular emphasis on the strategic planning of the organization name. Assure Electronic.
1.8 Limitation of the study
Several limitations were encountered during the study and they are:
1.9 Definition of terms
For the interest of prospective reader and better understanding of the work, it is good to define some concept and terms that may sound unfamiliar to non business students. It is briefly define below: