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Does business planning facilitate the development of new ventures?

Frédéric Delmar () and Scott Shane

Strategic Management Journal, 2003, vol. 24, issue 12, 1165-1185

Abstract: Many prior researchers have criticized business planning, arguing that it interferes with the efforts of firm founders to undertake more valuable actions to develop their fledgling enterprises. In this paper, we challenge this negative view of business planning, arguing that business planning is an important precursor to action in new ventures. By helping firm founders to make decisions, to balance resource supply and demand, and to turn abstract goals into concrete operational steps, business planning reduces the likelihood of venture disbanding and accelerates product development and venture organizing activity. Empirically, we examine 223 new ventures initiated in the first 9 months of 1998 by a random sample of Swedish firm founders and provide support for our hypotheses. Copyright © 2003 John Wiley & Sons, Ltd.

Date: 2003
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Handle: RePEc:bla:stratm:v:24:y:2003:i:12:p:1165-1185