The role of planning in small firms: Empirical evidence from a service industry

The relation between planning behaviour and performance is analyzed for a large number of small real estate firms in the Netherlands. A firm's planning behaviour appears to be influenced by the way it perceives its environment (in terms of complexity and dynamics) as well as its own characteristics (size, age and activities). The explanation of performance is dominated by a firm's size and the nature of its activities. Hardly and effect of planning on a firm's performance is found, though it appears that in an environment perceived as highly dynamic, planning is merely counter-productive.