Relationship Between Strategic Planning and SME Success: Empirical Evidence from Thailand

Abstract

The role of small and medium enterprises (SMEs) is becoming increasingly prominent throughout the world. Thailand is no exception. SMEs in Thailand represent over 90 percent of the total number of entrepreneurs in nearly all business sectors, and employ over 60 percent of the labor force. However, many SMEs fail each year. Given the significance of SMEs to the Thai economy and the fact that no study has yet examined strategic planning in the SME sector, this study seeks to investigate the linkage between strategic planning and growth of SMEs in Thailand. The primary objective is to determine whether or not there is a relationship between the use of strategic planning by SMEs and their growth. In addition, this research seeks to explore the factors that influence SME decision makers to use strategic planning. The findings indicate that the level of strategic planning is positively associated with the growth of the SME. This conclusion is very significant for SMEs because it shows them the usefulness and benefits of practicing strategic planning. Furthermore, the results reveal that certain demographic factors, such as age and education level, are significantly and positively related to the decision to use strategic planning. However, neither the gender of the SME decision maker nor the age of the SME business is related to the decision to use strategic planning.