MISSION AND VISION, ENVIRONMENTAL SCANNING AND FORMALITY OF STRATEGIC PLANNING AS PREDICTORS OF THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SMES) IN THE GAUTENG PROVINCE OF SOUTH AFRICA

Abstract

Faced with volatile business conditions and the hyper competitive market environment, SMEs are continuously focusing on finding ways to improve their performance. This paper attempts to establish the effect of mission and vision, environmental scanning and the formality of the strategic planning process on the performance of SMEs. A quantitative research approach was pursued through a self-administered survey questionnaire. Descriptive statistics, correlation analysis and regression analysis were used to analyse the data. The main findings of the study suggest that, the mission and vision statements, environmental scanning and the formality of strategic planning have a positive effect on the performance of SMEs. The formality of strategic planning emerged as the factor with a stronger impact on SME performance than environmental scanning and mission and vision. The study provides some practical insights for SMEs for improving their performance in line with the identified effect of these three factors. Ultimately, improving their performance along these factors is set to reinforce SME sustainability and which will further stimulate their profitability.