Uncertainty, Planning Sophistication and Performance in Small New Zealand Firms

Abstract

Environmental uncertainty is unavoidable. Business organisations, hence, have to develop ways and means to cultivate the opportunities and contain the menace that result from uncertainty. It has been argued that firms can address both the opportunity and menace questions of uncertainty through systematic planning which, in turn, help them enhance their performance. Using data from a sample of small firms in New Zealand, this study tries to examine the relationship between environmental uncertainty, planning and performance. The results of the enquiry suggest that small firms do not respond to uncertainty with increased planning. However, when they plan, their performance does record some improvement.