Short-term planning Ssphistication in SMEs: The relationship with strategy and perceived environmental uncertainty
Despite the many contingency studies that investigated how perceived environmental uncertainty (PEU) and strategy relate to the level of planning sophistication, this relationship remains unclear. To gain a better insight into this relationship in SMEs, we investigate the interactive effect of PEU and strategy on short-term planning sophistication, simultaneously controlling for multiple firm and CEO characteristics. The regression results reveal that PEU and strategy are interactively related to short-term planning sophistication and not in isolation. The data provide evidence that the relationship between PEU and short-term planning sophistication is negative and statistically significant among prospectors, whereas this relationship is positive, though not statistically significant, among analyzers and defenders. Further, our results indicate that prospectors plan more sophisticatedly than defenders and analyzers at low to average PEU levels, but that they plan less sophisticatedly than analyzers and defenders at high PEU levels. Given that our results are based on a sample of firms that exist for at least 13 years, the revealed relationships can be considered as “good” fits of long-term survivors, and as such are of interest to practitioners. From an academic perspective, we believe that many conflicting findings in the prior contingency literature can be explained by taking into account this interaction effect.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: Prinsstraat 13, B-2000 Antwerpen|
Web page: https://www.uantwerp.be/en/faculties/applied-economic-sciences/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gerdin, Jonas, 2005. "Management accounting system design in manufacturing departments: an empirical investigation using a multiple contingencies approach," Accounting, Organizations and Society, Elsevier, vol. 30(2), pages 99-126, February.
- anonymous, 1982. "Communication," Management Science, INFORMS, vol. 28(3), pages 337-337, March.
- Jonas Gerdin, 2005. "The Impact of departmental interdependencies and management accounting system use on subunit performance," European Accounting Review, Taylor & Francis Journals, vol. 14(2), pages 297-327.
- Risseeuw, Peter & Masurel, Enno, 1994. "The Role of Planning in Small Firms: Empirical Evidence from a Service Industry," Small Business Economics, Springer, vol. 6(4), pages 313-22, August.
- Otley, David T., 1980. "The contingency theory of management accounting: Achievement and prognosis," Accounting, Organizations and Society, Elsevier, vol. 5(4), pages 413-428, October.
- Langfield-Smith, Kim, 1997. "Management control systems and strategy: A critical review," Accounting, Organizations and Society, Elsevier, vol. 22(2), pages 207-232, February.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Paul. Westhead, 1997. "Ambitions, external environment and strategic factor differences between family and non--family companies," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 9(2), pages 127-158, January.
- Hartmann, Frank G. H., 2000. "The appropriateness of RAPM: toward the further development of theory," Accounting, Organizations and Society, Elsevier, vol. 25(4-5), pages 451-482, May.
- anonymous, 1982. "Communication," Management Science, INFORMS, vol. 28(11), pages 1350-1351, November.
- Simons, Robert, 1987. "Accounting control systems and business strategy: An empirical analysis," Accounting, Organizations and Society, Elsevier, vol. 12(4), pages 357-374, June.
- Danny Miller, 1991. "Stale in the Saddle: CEO Tenure and the Match Between Organization and Environment," Management Science, INFORMS, vol. 37(1), pages 34-52, January.
- Chenhall, Robert H., 2003. "Management control systems design within its organizational context: findings from contingency-based research and directions for the future," Accounting, Organizations and Society, Elsevier, vol. 28(2-3), pages 127-168.
- Chapman, Christopher S., 1997. "Reflections on a contingent view of accounting," Accounting, Organizations and Society, Elsevier, vol. 22(2), pages 189-205, February.
- Jones, C. S., 1985. "An empirical study of the evidence for contingency theories of management accounting systems in conditions of rapid change," Accounting, Organizations and Society, Elsevier, vol. 10(3), pages 303-328, July.
- Rogers, Patrick R. & Bamford, Charles E., 2002. "Information planning process and strategic orientation: the importance of fit in high-performing organizations," Journal of Business Research, Elsevier, vol. 55(3), pages 205-215, March.
- Collins, F & Holzmann, O & Mendoza, R, 1997. "Strategy, Budgeting, And Crisis In Latin America," Accounting, Organizations and Society, Elsevier, vol. 22(7), pages 669-689, October.
- Frank Hartmann, 2005. "The impact of departmental interdependencies and management accounting system use on subunit performance: A comment," European Accounting Review, Taylor & Francis Journals, vol. 14(2), pages 329-334.
- Dent, Jeremy F., 1990. "Strategy, organization and control: Some possibilities for accounting research," Accounting, Organizations and Society, Elsevier, vol. 15(1-2), pages 3-25.
- Gerdin, Jonas & Greve, Jan, 2004. "Forms of contingency fit in management accounting research--a critical review," Accounting, Organizations and Society, Elsevier, vol. 29(3-4), pages 303-326.
- Chenhall, R. H. & Morris, D., 1995. "Organic decision and communication processes and management accounting systems in entrepreneurial and conservative business organizations," Omega, Elsevier, vol. 23(5), pages 485-497, October.
When requesting a correction, please mention this item's handle: RePEc:ant:wpaper:2006022. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joeri Nys)
If references are entirely missing, you can add them using this form.