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Summary articles Growth strategies
Complete summary of all the requires articles for the new master course Growth strategies & organizational challenges
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Voorbeeld van de inhoud
Growth strategiesGS&OC: extensive summaries of 21 required articles
Lecture 1
Method
Framework
Main findings
Overview framework articles
1.1 Brinckmann, J., Grichnik, D., & Kapsa, D. (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), 24-40
Method
Meta-analysis, on the business planning-performance and specific focus on contextual
factors moderating the relationship
Evidence based approach by applying a meta-analysis→ seeks to derive insights by
systematic synthesizing prior empirical findings, overcomes limitations of individual studies.
46 studies on 11.046 organizations.
Framework
3 moderating factors
1. Development stage of the firm
1. New or established firms
b. The form of business planning undertaken
c. The cultural context in which the planning performance relationship takes place
H1 = supported H3 = not supported
H2 = supported H4 = supported
Business planning, 2 constructs
1. The outcome of business planning → extent of written documentation
2. The process of business planning → intensity and analytic complexity
Main findings
Planning is beneficial, yet contextual factors such as newness of the firms and the cultural
environment of firms significantly impact the relationship. Based on this evidence, we
propose a concomitant (gelijktijdige) and dynamic approach that combines planning and
learning.
1
,Business planning increases the performance of both new and established small firms, yet
different factors moderate the strength of the relationship. Contingencies such as
uncertainty, limited prior information and an absence of business planning structures and
procedures can limit the return on business planning. Based on these findings we suggest a
concomitant (gelijktijdige) and dynamic approach of planning, learning and doing.
Results also show that studies analyzing the performance effect of business planning
outcome (written business plans) determine similar positive performance effects as studies
focusing on the business planning process (sophistication of business planning activities).
Both outcome and process of business planning augment (vergroten) firm performance with
comparable strength. Since business planning in new and established small firms is
oftentimes informal, iterative, incremental, unstructured and irregular leading to no written
outcome, the development of these firms might suffer. → apply both formal and more
sophisticated (geavanceerde) planning approaches.
Business planning promises greater returns for the average small firm than for the new small
firm. Established small firms, have information, routines and processes.
Findings show with respect to different cultural settings that business planning is less
beneficial for the performance in cultures characterized by higher uncertainty avoidance
than firms win cultures with lower uncertainty avoidance. Interpretation: founders and small
business leaders might stick more closely to their predetermined plans in countries where
uncertainty avoidance is high. → could limit their strategic flexibility and openness to
necessary changes to their business plans which in consequence limit performance.
→ Exercise Emergent strategies in uncertain and unpredictable environments, initiation of
action to capture arising opportunities
This paper is to research the value of business planning for established small and especially new
firms. On one side, the planning school argues that business planning is crucial for the survival and
development, and a systematic, prediction-oriented, and formal approach leads to superior venture
performance. On the other hand, other group of researchers challenges the value of prediction-
oriented strategic approaches for an organization's performance. Beyond the question whether a
general planning-based approach is beneficial for small firms, this study is aim to uncover empirical
evidence relating to contexts when business planning shows increased effectiveness.
Theory
Research framework
2
,Business planning and performance of small firms
The planning school assumes that planning generally improves effectiveness of human action and
facilitates goal achievement. The opposing learning school indicate that effective strategies can be
emergent patterns that do not necessarily follow a predefined, explicit or formal plan. Early studies
investigating the performance effects of business planning in the small firm context have found a
positive relationship. Additionally, recent studies investigating planning practices in the marketing
domain of new firms suggest that planning has positive performance effects.
Hypothesis 1. Business planning in small firms increases performance
Moderating Factors:
Development stage of the small firm
The effectiveness of business planning might be dependent on whether the small firm is new or
established. As opposed to established firms, new firms face the challenge of establishing themselves
as an organization and in the marketplace while being exposed to higher degrees of uncertainty and
less information to base their decision on. According to the effectuation theory, in the context of
ambiguous and missing information of new firms, predictive and formal planning techniques are less
effective for an organization's survival and performance.
Hypothesis 2. Business planning increases performance more in established small firms than it does
in new small firms.
Forms of business planning
It can be expected that studies analyzing the business planning process determine different
performance effects than those exclusively focusing on the written documentation as an outcome of
business planning. Written formal plans aiming to assure commitment of stakeholders which can
provide resources might be more important for growth and development of firms than the level of
sophistication employed in the business planning process.
Hypothesis 3. The outcome of business planning has a greater effect on firm performance than the
business planning process.
3
, Cultural Context
Another moderator of the business planning–performance relationship appears to be the cultural
setting in which firms operate. An important difference between cultures is the tolerance of
uncertainty.
In countries with high levels of uncertainty avoidance, managers rely on more extensive forms of
planning to cope with uncertainty, which in consequence limits innovative behavior
In countries with greater tolerance of uncertainty, managers may feel more comfortable deviating
from their plans. These managers may be more responsive to information contradicting established
plans, more likely to adopt necessary changes to the strategic plans, and more inclined to
improvisational decision-making in light of ambiguity.
Hypothesis 4. Business planning has a greater effect on firm performance in cultures with low
uncertainty avoidance than it does in cultures with high uncertainty avoidance.
Method
In this study, an evidence-based approach to entrepreneurship research is followed by applying meta-
analysis. Evidence-based research seeks to derive insights by systematic synthesizing prior empirical
findings. It overcomes limitations of individual studies and narrative reviews of empirical findings. The
meta-analysis synthesizes extant research on planning comprising a total of 46 studies. Three studies
contained multiple samples providing us overall with 51 usable data sets covering both new and
established small firms. To examine the moderating effect of contextual factors, both bivariate
analyses and meta-regressions are applied.
Results
The findings confirm the first hypothesis proposing that business planning increases firm
performance. Business planning has significantly greater impact on performance in established small
firms than in newer firms. Thus, results confirm Hypothesis 2. However, the differences in effect sizes
of the studies cannot be explained by whether studies analyse the outcome and the process of
business planning. Therefore, Hypothesis 3 is rejected. In cultures with higher levels of uncertainty
avoidance, business planning has a lower impact on performance. Thus, findings support Hypothesis
4.
The development stage moderates the positive relationship between business planning and
performance. While entrepreneurship scholars often draw on small and new firm studies without
reflecting the unique circumstances of the respective firm type, this study specifically distinguish
between these types to evaluate how newness and emergence influence the planning–performance
relationship. It is found that business planning promises greater returns for the average small firm
than for the new small firm.
The results indicate that the cultural context of organizations significantly moderates the business
planning–performance relationship. It is shown that higher levels of uncertainty avoidance, which
exist in certain national cultures, reduce the benefits from business planning on the performance of
firms.
The research shows that both the output of business planning (written plans) and the process of
business planning (planning meetings, market and scenario analysis, use of computers, portfolio
analysis) augment firm performance. Accordingly, our findings reject hypothesis 3. It can be
concluded that both the symbolic and the learning effects of business planning play a key role in
augmenting small firm performance. Both the formal outcome of business planning and the process
4
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