Barriers to adopting strategic planning as a management tool in small construction firms

Strategic planning enables firms to determine their long-term direction. Research indicates a positive correlation between strategic planning and improved performance. Yet, small firms within the construction industry are slow to adopt strategic planning in their organisations. To understand why small firms do not use strategic planning; 20 semi-structured interviews are conducted with owners and senior managers from eight principal contractors; eight subcontractors and four consultancies to gain insight. Interviews are transcribed; coded using NVivo; and themes developed using thematic analysis. The results indicate time constraints; expertise/exposure; focusing on operational matters; the owners' motivations for being in business and industry structure as inhibitors to adopting strategic planning in small firms. The negative consequences of not planning strategically in the construction industry have been reported. This paper contributes to strategy and construction management research by discerning the reasons why small firms do not plan strategically. The findings require an integrated approach at governmental level; industry level and behavioural changes within small firms to improve strategic planning.