Strategic planning, budget monitoring and growth optimism: Evidence from Australian SME's

Abstract

Purpose – The purposes of this paper is to assess the implications of concurrent strategic planning and financial management processes on anticipated future revenue growth. Design/methodology/approach – We use a secondary dataset, gathered among Australian SMEs, by the Australian Bureau of Statistics. Our analysis adopts a regression approach including a mediated and a non-mediated path to explore the direct and indirect effects of strategic planning and budgetary planning and management on expected future revenues. Findings - Our findings suggest that (a) firms that utilise strategic planning and robust budget planning and monitoring processes exhibit higher optimism about future sales growth and (b) firms that effectively configure these planning activities with market development tend to exhibit higher growth and more growth optimism. Originality – we believe that this paper is one of the first to link managerial revenue growth expectations (optimism) to planning and monitoring activities. Our overall model, that anticipates positive benefits from the effective deployment of this configuration of planning, monitoring and optimism, is confirmed.