Strategic planning and performance of SMEs in Ghana

Purpose This paper aims to examine the interacting effect of market dynamism and strategic planning on the performance of small- and medium-scale enterprises (SMEs) in Ghana. Design/methodology/approach This study has used quantitative approach in dealing with the interacting effect of market dynamic on strategic planning and SMEs’ performance in Ghana. Purposive sampling is used to select 200 small- and medium-sized manufacturing and service firms in Ghana. The hierarchical multiple regression analysis is performed to test the hypotheses. Findings This study finds that a consistent application of strategic planning methodologies contributes to the advancement of SME performance in Ghana. In addition, it was ascertained that market dynamism has a significant positive relationship with firm performance, although its effect is not significant. Finally, the study reveals that market dynamism only influences SME performance when there is strategic planning. Research limitations/implications The findings are limited to the SMEs in Ghana. The study of market dynamism, strategic planning and performance is a very complex activity; therefore, to gather rich data on such research work may be best accomplished if the researchers adopt mixed method data gathering techniques. This will enrich the understanding on market dynamism, strategic planning and SMEs’ performance relationship. Practical implications The findings of this research work offer guidance to owners or managers considering how to develop market dynamics and strategic planning to enhance firm performance. Originality/value This study reports on an obvious gap in the prevailing literature that few empirical research works have explored on the possible impacts of market dynamism and strategic planning on performance of SMEs in a third world country.