Abstract
It is pleasing to find small firms at the heart of contemporary economic and political discussion. This research helps to illuminate their role in the industrial economy by examining their potential to organize their resources more efficiently and think ahead in a formal and systematic manner via the vehicle of corporate planning. The research incorporates a cross-sectional analysis of 1494 small firms in U.K. manufacturing industry, including a sub-sample of 120 firms from the Construction sector. Using a mail survey questionnaire, data was collected from each firm on company type, ownership, management structure, market structure, internal financial operation and planning activity. In order to identify those characteristics associated with companies planning ahead formally and those planning informally, the data was subjected, to two and three way crosstabulations with elaboration where necessary. A more rigorous analysis, using the Automatic Interaction Detector, was then performed on the data to substantiate the findings of the initial analysis and clarify the relationships when necessary. The results show, among other things, that some form of formal planning exists in U.K. small firms, but this is largely restricted to larger small firms and subsidiary companies.