Cultural Differences in Planning/SuccessRelationships: A Comparison of SmallEnterprises in Ireland, West Germany,and East Germany^by Andreas Rauch, Michael Frese, and Sabine Sonnentag

Research has already examined therelationship between planning and suc-cess of small firms, but the conclusionsdrawn are inconsistent. In tbis study,we argue that the relationship betweenplanning and success is dependent onthe cultural context. Planning strategiesand their relationship to success werecompared in 77 Irish, 102 East German,and 98 West German small-scale enter-prises. In Germany, planning had a pos-itive influence on success, while this

relationship was negative in Ireland.Moreover, planning strategies were foundto mediate the relationship between busi-ness owners' achievement orientationsand success. This mediating influence waspositive in Germany and negative inIreland. These differences are interpretedto be due to a higher level of uncertaintyavoidance in Germany (Hofstede 1991),which makes planning culturally appro-priate and successful

Mr. Rauch is a doctoral candidate in the Depart-ment of Psychology, University of Amsterdam, TheNetherlands. His research interests focus on successfactors in small-scale enterprises.

Dr. Frese is professor in the Department of Psy-chology, University of Amsterdam,The Netherlands,and in the Department of Psychology, University ofGiessen, Germany. His research interests are in per-sonal initiative, errors and error training, and culturaland success factors in small-scale enterprises.

Dr. Sonnentag is an assistant professor in theDepartment of Psychology, University of Amsterdam,The Netherlands. Her research interests includeexpertise and excellence in individual and cooper-ative work settings, individual and team-relatedworking strategies, work conditions in researchand development, and work-related mental health.

•An earlier version of this study was presented atthe 42nd World Conference of the InternationalCouncil for Small Business in San Francisco, California.We gratefully acknowledge financial support by theLandesforschungsschwerpunktprogrammHessen/Thueringen.

Planning, Success,and Culture

This study looks at the correlationbetween planning and small businesssuccess in two different cultures, Irelandand Germany, to examine how culturalcontext might affect this correlation. Muchof the literature on success in small busi-ness seems to assume the importance ofplarming for small firms' performance(for example, see Ryans 1997). However,empirical investigations of the planning/success relationship have not led to con-sistent results. While some studies haveshow^n extensive planning in the foundingphase to be related to small-scale businesssuccess Gungbauer-Gans and Preisendorfer1991;Ackelsberg and Arlow 1985;Bracker,Keats, and Pearson 1988), others foundno correlation between planning and suc-

28 JOURNAL OF SMALL BUSINESS MANAGEMENT

cess (Robinson and Pearce 1983; Shuman,Shaw, and Sussman 1985; Lumpkin,Shrader, and Hills 1998). Although Lyle etal. (1995) found a significant correlationbetween formal planning and the growthrate of sales in small enterprises, theyfound no effects on return on equity orreturn on assets. In a recent meta-analysis,Schwenk and Shrader (1993) reported asignificant but small relationship betweenplanning and small venture performance.

In the literature, two arguments aregenerally proposed to explain the lowand sometimes conflicting relationshipsbetween planning and success of smallenterprises. The first argument focuseson the methodological quality of entre-preneurship research (see Low andMcMillan 1988). For example, planninghas been operationalized in a number ofdifferent w ays. It has been defined as acharacteristic of the business owner(Frese, van Gelderen, and Ombach, 2000)or as a business activity. Some researchershave evaluated the formality of planning(Robinson and Pearce 1983), while otherauthors have measured planning sophis-tication (Gapon, Farley, and Hulbert1994) or differentiated between strategicand operational planning (Shrader, Mulford,and Blackburn 1989). Like planning, sampleand performance measures have also beenoperationalized in a variety of ways.

A second explanation for the incon-sistent findings about the planning/suc-cess relationship is concerned with othervariables that impact the relationshipbetween entrepreneurs' planning andsuccess (Schwenk and Shrader 1993).Thurston (1983) argued that planningcan hinder firm performance because itreduces the flexibility of small businesses,and that "the relevance of planning to aparticular company situation ... is thekey" (p. 164). Risseeuw and Masurel (1993)found that small firms' planning was neg-atively related to success in a highlydynamic environment.Another prominentpotential moderator is culture. Differentcultures lead to different organizational

structures (Adler 1991) and ask for differ-ent leadership and management theories(Erez and Earley 1993). Similarly, a theoryof entrepreneurial success has to makethe cultural (and potentially sub-cultural)issues explicit. Hofstede (1991) definedcultural values as broad tendencies toprefer specific behavioral patterns overothers. He identified four value dimen-sions that pattern behavior—uncertaintyavoidance, power distance, individualismversus collectivism, and masculinity versusfemininity. A given culture's alignment inthe uncertainty avoidance dimension isparticularly relevant to planning. One wayto overcome uncertainty is to plan care-fully. Founding an enterprise is a largestep into an uncertain future, and planscan be seen as an attempt to minimizethis uncertainty (Thurston 1983). Thus,in cultures that value uncertainty avoid-ance, such a behavior may be rewardedand meet with success, w hile in othercultures planning may be detrimental.

To explore the effect of this culturaldimension on the planning/success rela-tionship, Irish and German small businessowners were chosen for comparisonbecause the two countries are quite similarin all of Hofstede's (1991) value dimensionsexcept for uncertainty avoidance. Inthree of these dimensions, Hofstede (1991)reported no differences between Germanyand Ireland. However, in the dimensionof uncertainty avoidance, clear-cut differ-ences appeared betw^een these tw ocountries (see Table 1).

Ireland ranks as one of WesternEurope's countries least concerned withavoiding uncertainty. In contrast, Germanstend to feel more easily threatened byunknown and uncertain situations.There-fore, planning may be differentially impor-tant—and effective— in these two cultures.Germany is a culture in which businessowners are expected to plan more and indetail, while Ireland is a culture in whichdetailed planning is not called for.

Moreover, people are judged by whetheror not they conform to expectations.When

OGTOBER 2000 29

Table 1Cviltural Values of Ireland and Germany^

ValuesIreland

Score Rank

4912

7/847/48

Index Score

28703535

GefmanvScore Rank

42/4415

9/1029

Index Score

35676665

Power distanceIndividualism/collectivismMasculinity/femininityUncertainty avoidance

^Adapted from Hofstede (1991).

a culture is high in uncertainty avoidance,there are general expectations that onew ill deal with uncertainty by carefulplanning. Since entrepreneurial successdepends on doing things "right" from thecustomers' perspective, planning -willlikely be more successful in Germany. Sinceeveryone around the entrepreneur alsoplans, only the well-planning entrepreneurw Ul have a good fit w ith the culture andbe successful.

By contrast, in Ireland—a culture withlow uncertainty avoidance—detailedplanning will have a poor fit with otherpeople's behaviors. Planning in detail isan investment not easily abandoned.As aresult, planning always carries the risk ofinflexibility. In cultures where people dolittle planning, there w ill be a higherdegree of unplanned behavior by others,more tolerance of unplanned behavior,less respect for a plan, and more demandfor flexibility. For all of these reasons,planning may even seem dysfunctionalin such a culture. In practical terms, aGerman business will have customerswho expect (and rew^ard) precise timingaccording to a plan, whereas an Irishbusiness needs to please customersexpecting flexible service, and failing tomeet this expectation means losing busi-ness.Thus, the first two hypotheses are:

Hp Small businesses in Germany do moreplanning than their counterparts inIreland.

H2: Planning has a positive relation-ship with success in Germany whilethe relationship between planningand success is negative in Ireland.

This line of argument can be extendedto a fuller model of entrepreneurial success.There is evidence that the personalitycharacteristics of small scale businessowners impact both business strategiesand business outcomes (Baum 1995;Kotey and Meredith 1997; Rauch andFrese 2000). Need for achievement is aconcept w^hich is related to entrepre-neurship because entrepreneurs mustperform well at challenging tasks, theymust take responsibility for results, andmust seek feedback on their business'performance (McClelland 1986). Researchhas shown that achievement-orientedbusiness owners are more successful thanthose who are not (McClelland 1986; Singh1978; Gooper and Gimeno-Gascon 1992;Spencer and Spencer 1993). By reviewingstudies on achievement orientation quan-titatively, Rauch and Frese (2000) con-cluded that achievement orientation ispositively related to the success of small

30 JOURNAL OF SMALL BUSINESS MANAGEMENT

enterprises. In addition to achievementorientation, internal locus of control andself-efficacy are owner/manager character-istics that are closely related to entrepre-neurship. Internally controlled businessowners believe that business outcomesare in their control, not simply the resultof chance events. Brockhaus (1980)showed that successful entrepreneursscored significantly higher on measuresof internal control than did unsuccessfulentrepreneurs. The same is true of self-efficacy (Baum 1995).

While these findings on the relationshipbetween owner/manager personality andsuccess are stiU contradictory (Brockhaus1980; Begeley and Boyd 1987; Lorrainand Dussault 1988) and controversial (seeGartner 1988), there is enough evidenceto lead one to propose that an owner/manager's achievement orientation wouldresult in the use of strategies that are cul-turally successful. Thus, achievement-ori-ented owner/managers wUl plan more ina cultvire that values uncertainty avoid-ance and will plan less in a culture thatdoes not.Thus, planning can be seen as amediator between achievement orienta-tion and success O^mes and Brett 1984).Thus, the third hypothesis is:H^:In Germany, achievement orientation

is positively related to planning, whilein Ireland, achievement orientationis negatively related to planning. Inboth cultures, planning is a mediatorin the achievement orientation/suc-cess relationship.

The Possible Effect of EnvironmentDoing a cross-cultural study often pre-

sents certain methodological problems.For example, it is difficult to control con-text variables in cross<ultural studies,making it very difficult to rule out alter-native explanations (Poortinga and Vande Vijver 1987).Triandis (1984) argued,for example, that planning is more com-mon when the environment is pre-dictable, because planning does not get

rewarded in unpredictable environments.In an unpredictable environment, one isbetter off reacting spontaneously to thecurrent situation. Mattews and Scott(1995) also found that planning in smallenterprises declined with increasingenvironmental uncertainty.

Adding a sample from East Germanymakes it possible to test this alternativeexplanation. East and West Germansbelong to the same core culture, but thereare clear differences in their businessenvironments. Since 1989, the EastGerman economy changed from a socialistto a market economy, creating unpredict-able turbulence and a deep economicdepression. In 1993 (the time of ourstudy). East Germany had high rates ofunemployment, decreasing industrialproduction, and a small number of smallbusiness owners. The unemploymentrate in 1993 was 15.4 percent in EastGermany, compared to 5.6 percent inWest Germany (Statistisches Jahrbuch1994). East German businesses wereundercapitalized, and many of its small-scale enterprises had problems with liq-uidity (Knipper 1994). Thus, comparedto West Germany, small-scale enterprisesin East Germany have to maneuver in amuch more uncertain environment. Tosome extent, similar arguments hold forIreland—although Ireland's economy isstronger than East Germany's, its eco-nomic situation is weaker than WestGermany's. In 1993, the unemploymentrate in Ireland was about 18.4 percent, andthe gross domestic product was only halfof that of West Germany (StatistischesJahrbuch 1994). However, like WestGermany, Ireland is a market-orientedeconomy. Within the last 30 years, Ireland'seconomy changed from an agriculturaleconomy to an industrial economy (Glebe1991). Today, Ireland is a well-integratedmember of the European Community andhas overcome its historical dependency onthe British economy. Thus, compared toIreland, East German business owners actu-ally face a more uncertain environment.

OCTOBER 2000 31

Based on Triandis' (1984) argument,planning should be less important in EastGermany than in either West Germany orIreland because East German businessowners are confronted with a muchmore turbulent environment than areWest German or Irish business owners.By the same logic, the relationshipbetween planning and success wouldnot be expected to vary as muchbetween East and West Germanybecause of their shared cultural values.Thus, this three-sample design allowsthis study to test the impact of culturaldifferences while controlling for envi-ronmental differences. Therefore, thefourth hypothesis is:H^: There are similar and positive rela-

tionships between achievement ori-entation, planning, and success insmall firms in East and WestGermany.

MethodsSample

The study was done between October1993 and Eebruary 1995. The sample ofWest German business owners wasdrawn from Giessen and surroundings,the East German sample from Jena, andthe Irish sample from Galway. There aresome structural similarities betweenthese cities. They all have universities.Galway had 51,000 inhabitants in 1994(Statistisches Jahrbuch 1994), Giessennearly 75,000, and Jena about 100,000inhabitants. The German participantswere chosen from lists provided by therespective Chambers of Commerce (inwhich registration is mandatory inGermany). The Irish business ownerswere chosen mainly from lists providedby the Chamber of Commerce and theIDA Gndustrial Development Agency).

Three criteria were used for partici-pating in the study. Eirst, the enterpriseshad to have between one and fiftyemployees because the European Unionuses this measure to define a small busi-

ness. Second, the participants had to bethe founders and owners of the enter-prise; and third, the business had to be astand-alone or a franchise business.

The business owners participated in astandardized interview (about 60 min-utes) and completed a questionnaire. InWest Germany, 98 owners participated,for a response rate of 52.1 percent. InEast Germany, there were 102 businesses(response rate of 63.7 percent), and theIrish sample consisted of 77 enterprises(response rate of 69.4 percent).

MeasuresThe questionnaire items were trans-

lated into English and back translated.Translation errors revealed by the backtranslation were corrected. Achievementorientation was measured with threescales: (1) need for achievement—thewillingness to carry out difficult tasks(Modick 1977); (2) locus of control—theextent to •which a person is confidentthat (s)he is able to modify events in theenvironment (Levenson, 1972; translatedto German by Krampen, 1981); and (3)self-efficacy—the subjective perceptionof one's efficacy at work (Bandura 1986;Speier and Erese 1997). Descriptive sta-tistics for the scales are displayed inTable 2 (East and West Germany) andTable 3 (Ireland). Since there was multi-collinearity among the scales, we com-bined the three scales into one second-order factor (which in the foUow ing dis-cussion is referred to as the achievementorientation of small business owners.)Cronbach's alphas for the scales were.73 in Ireland, .67 in East Germany, and.67 in West Germany. This combining isjustifiable in that the concepts of needfor achievement and internal locus ofcontrol share common variance (Ward1994), and internal locus of control hasbeen correlated with self-efficacy (Chen,Greene, and Crick 1998).

Planning was conceptualized as a con-tinuum ranging from no planning at allto very detailed planning. A respondent's

32 JOURNAL OE SMALL BUSINESS MANAGEMENT

Table 2Intercorrelations and Descriptive Statistics

for Achievement Orientation Scales of East and West Germany*

Questionnaire Scales

1. Need for achievement2. Internal locus of control3. Self-efficacy4. Reliability5. Mean6. Standard deviation7. Range

1

.46*

.34*

.804.97

.601-6

2

.39*

.42*

.665.13

.551-6

3

.36*

.45*

.724.07

.461-5

4

.75

.71

.67

5

4.494.874.04

6.72.54.45

7

1-61-61-5

^Correlations above the diagonal are for West Germany; those below the diagonal are for EastGermany.•p<.01, one-tailed.

Table 3Intercorrelations and Descriptive Statistics for

Achievement Orientation Scales of Ireland

QuestionnaireScales

StandardReliability Mean Deviation Range

1. Need for achievement2. Internal locus of control3. Self-efficacy

.42* 52*50*

.87

.71

.67

4.414.923.90

.88

.67

.55

1-61-61-5

*p<.05, one-tailed.

placement on the continuum was deter-mined by responses in the intervie'w thatwere coded by two independent raters.Afirst measure explored the business planprepared at the start-up of the business.If a business plan existed, its level ofdetail was rated on a five-point scale.Theinter-rater reliabilities on this measurewere .94 for Ireland, .85 for West Germany,and .79 for East Germany. A second mea-sure of planning examined plans for thefuture. Participants were asked to reportgoals for their enterprise for the nextyear and how they planned to reachthese goals. An index called "target plan-ning" w as developed that rated eachplan's level of detail and quality. The reli-abilities (Cronbach's alphas) of this scale

were .81 for Ireland, .85 for WestGermany, and .76 for East Germany. Theinter-rater reliabilities were .62 in Ireland,.51 in West Germany, and .53 in EastGermany. Since inter-rater reliabilitieswere low in this variable, the chance ofgetting significant results was reduced.

Small-scale business research shoulduse multiple measurements of successbecause any single measure is prone toerrors (Frese, van Gelderen, and Ombach2000). For example, the profit rate isaffected by tax structures, and sales vol-ume is often dependent on the type ofindustry. Wages are often the mainexpenses in the service sector whereassome manufacturing industries needexpensive raw materials. In this study.

OCTOBER 2000 33

three different measures of success were to failure (Briiederl, Preisendorfer, andsummarized into a total success index: Ziegler 1992). Because the study samplesgrowth of the enterprise (measured by a include a variety of industries, this vari-change in the niunber of employees over able was included to control for thatthe three years), the owner's income, and potential influence,the owner's level of work satisfaction.

Additionally, three control variables ReSUltSwere measured by single items: start-up According to the first hypothesis, meancapital, company age, and industry type differences in planning were expected(craft, service, trade, and manufacturing), between Germany and Ireland. As Table 4Prior research has found the amount of indicates, this hypothesis was not sup-capital available at start-up to be related ported. German business owners reportedto success and company age to be related less often having had a business plan when

Table 4Mean Dijfferences in Planning between Ireland and Germany

Measures of Planning

Level of detail instart-up plan

Target planning

*p<.05, one-tailed.

Ir

Mean

3.233.27

elandStandardDeviation

1.35.94

Gf^rmanyStandard

Mean Deviation

3.393.34

1.25.83

t-Test

-.33-.59

Table 5Partial Correlations of Variables for East and West Germany^

Variables

1. Achievement orientation

2. Start-up business plan (yes/no)

3. Level of plan's detail

4.Target planning

5. Success

1

.02(84).12

(66).11

(84).27"(83)

2

.10(89)

.26*(66)-.07(84).03(83)

3.24*(48).43"(48)

.21*(66).22*(66)

4

.05(89).05

(89).50"(48)

.20*(83)

5

.35"(89)-.02(89).27*(48).14

(89)

Correlations above the diagonal are for West Germany; those below the diagonal are for EastGermany. Controls: age of enterprise, start-up capital, and type of industry.

• p<.05, one-tailed."/)<.O1, one-tailed.

34 JOURNAL OF SMALL BUSINESS MANAGEMENT

they started than did the Irish businessowners (^^(l, n=280) = 4.66; p<.05).This contradicts our hypothesis. However,as this item was rated without any qualityevaluation, the business plans reportedcould range from very detailed to a sketchyoutline. When the content of the businessplan was rated, German business ow^nershad a slight but non-significant tendency toplan in more detail. Similarly, the Germansscored higher in target planning.

Tables 5 (Germany) and 6 Greland)present the bivariate relationships foundbetween planning and success. Asshown, the relationships were all in theexpected direction. The existence of astart-up business plan was not correlatedw ith success in any of the three samples.However, the level of the plan's detail didshow a significant positive relationshipwith success in East Germany (partialr=.22;j5<.05), as well as in West Germany(partial r=.27;/?<.05). In Ireland, the levelof detail was significantly and negativelyrelated to success (partial r= -.36;/><.Ol).Target planning was positively related tosuccess in East Germany (partial r=.2O;p<.Q5) and in West Germany, although it

was not significant there (partial r=.l4;ns.). In Ireland, there was a negative butnon-significant correlation between targetplanning and success (r=.13;ns.).

As Table 7 indicates, there were signif-icant differences in the planning/successrelationship between the German sam-ples and the Irish sample. The Irish andWest German samples differed signifi-cantly in the relationship between suc-cess and the business plan's level ofdetail (z=3.06;/)<.01); this was also truebetween Ireland and East Germany(z=2.99;/?<.01). Additionally, there was asignificant difference between Irelandand East Germany in the relationshipbetween target planning and success(^=1.94; p<.05). These results showsophisticated planning to be positivelyrelated to success in Germany. In Ireland,on the other hand, sophisticated plan-ning had a negative relationship withsuccess.Thus, the second hypothesis wassupported.

Achievement orientation was posi-tively correlated w ith success in all threesamples: East Germany (partial r=.27;/?<.O1); West Germany (partial r=.35;

Table 6Partial Correlations of Variables for Ireland^

Variables 1 2 3 4

1. Achievement orientation

2. Start-up business plan (yes/no)

3. Level of plan's detail

4.Target planning5. Success

.06(66)

-.38*(44)

-.18(65)

-.10(65)

.12(44)

.23"(59)

-.02(59)

-.36*(40)

-.13

^Controls: age of enterprise, start-up capital, type of industry.

*p<.05, one-tailed."/><.O1, one-tailed.

OCTOBER 2000 35

Table 7Differences in Partial Correlations between Ireland,

West Germany, and East Germany Using r-to-z Transformation

Ireland vs.Correlations West GermanyStart-up business

plan with successDetail of plan with successTarget planning with successAchievement orientation

with successAchievement orientation

with detail of planAchievement orientation

with target planning

.243.96"1.57

.81

2.96"

1.39

Ireland vs.East Germany

.242.99"1.94*

.17

2.59"

1.72*

West Germany vs.East Germany

.52

.26

.40

.64

.61

.32

5, one-tailed./x.Ol, one-tailed.

j!J<.01), and Ireland (partial r=.23;/J<.05).There were no significant differencesamong the three correlations. However,there were differences in the correla-tions of achievement orientation withthe planning measures. In East Germany,the correlations were positive but notsignificant. In West Germany, achieve-ment orientation was positively and sig-nificantly related to level of detail in thestart-up business plan (partial r=.24;/7<.O5). In contrast, this relationship wassignificantly negative in Ireland (partialr=-.36;/?<.01). Similarly, the relationshipbetween target planning and achieve-ment orientation in Ireland was negative,although the correlation was not signifi-cant. As Table 7 indicates, the correlationsbetween achievement orientation andbusiness plan detail differed significantlybetween Ireland and West Germany(z=2.96; /?<.O1), as well as betweenIreland and East Germany (z=2.59;p<.Ol).Additionally, there was a significant differ-ence between East Germany and Irelandin the correlation of achievement orienta-tion with target planning (z=1.72;p<.05}.Thus, the German achievement-oriented

business o^vners practiced careful plan-ning, whereas the Irish achievement-ori-ented business owners did not. Asexpected, there was no differencebetween the correlations of East andWest Germany.

The bivariate relationships reported sofar between achievement orientation,planning strategies, and success are nec-essary but not sufficient conditions forthe validity of a mediator (James and Brett1984). In Ireland and in West Germany,the strategy of developing a detailedbusiness plan at start-up satisfied thenecessary condition of a mediator testbecause it was correlated significantlywith both achievement orientation andsuccess. Multiple regression analysis(Cohen and Cohen 1975; Baron and Kenny1986) was used to test whether level ofdetail is a mediator between success andachievement orientation in Ireland andin West Germany. Table 8 shows theresults of the mediator analysis.

As Table 8 sho'ws, the third hypothesiswas supported—the strategy of making adetailed business plan at start-up didmediate the relationship between

36 JOURNAL OF SMALL BUSINESS MANAGEMENT

Table 8Hierarchial Regression Analysis of Detail of Start-upBusiness Plan Mediating the Relationship hetween

Achievement Orientation and Success^

IrelandNon-mediator model''Mediator modeF

West GermanyNon-mediator model''Mediator modeF

A«2

.04*.01

.09*.07

/?2 Difference

.03

.02

R^ Reduction

75 percent

22 percent

''Controls are age of enterprise, start-up capital, type of industry.''Achievement orientation on success; no control for detail of start-up business plan.' Achievement orientation on success; detail of start-up business plan controlled.

* /»<.O5, one-tailed.** p<.0\, one-tailed.

achievement orientation and success inIreland and in West Germany, but inopposite directions. In West Germany,detailed plantiing positively affected therelationship between achievement orien-tation and success, while in Ireland itwas a negative mediator.

DiscussionIn this study, the relationships

between planning strategies and successin small-scale enterprises were examinedin West Germany, East Germany, andIreland. It was found that the quality ofplanning was positively related to suc-cess in both East and West Germany,while this relationship was negative inIreland. Moreover, achievement orienta-tion correlated with success in all threecountries. The level of detail in the start-up business plan was found to mediatethe relationship between achievementorientation and success.

According to the first hypothesis,more precise planning was expected inEast and West Germany than in Ireland.

When asked whether a business planhad been prepared, the Irish businessowners said "yes" more often than theGermans. This does not mean, however,that these plans were developed in anydetail. In fact, there were no mean differ-ences in the quality of planning betweenIreland, East, and West Germany. Thus,our first hypothesis w as rejected.However, mean scores derived from cul-turally different samples are vulnerableto the effects of large sets of antecedentdifferences (Malpass and Poortinga1986). For example, different raters ofthe different samples may have devel-oped different anchor points to define adetailed plan. Such a bias is liable toreduce differences in mean scores butwould not affect the relationships posit-ed in the other hypotheses.

In the second hypothesis, it was pos-tulated that plarming has a positive rela-tionship with success in East and in WestGermany, while this relationship isabsent or even negative in Ireland. Themere existence of a start-up business

OCTOBER 2000 37

plan did not contribute to success.However, detailed planning was positivelyrelated to success in both East and WestGermany and negatively related in Ireland.The planning/success relationship in theIrish sample differed from the relation-ships found in the two German samples.This difference can be explained by theeffect of different cultural values, withuncertainty avoidance being the mostlikely value dimension at work Uncertaintyavoidance is related to platining becauseplatining is perceived to help one controlfuture events (Thurston 1983) and thusto reduce the uncertainty of running one'sbusiness. Since Germans as a whole valueplanning highly, only business owner/managers who plan in detail have a goodfit with their culture and achieve success.

Why is planning negatively related tosuccess in Ireland? Plantiing does havesome potential disadvantages. Planningrequires time and money, and suchinvestments are not easily abandoned.This reluctance to deviate from a planrisks creating a certain amount of inflex-ibility that can be detrimental. In a cul-ture that does not value planning, thereis more tolerance for unplanned behav-ior and more expectation for quick solu-tions made "on the spot." For this reason,platining might be maladaptive in Irelandand thus negatively related to success.

In all three samples of small businessowners, achievement orientation wascorrelated with success.This is interesting,because in the field of entrepreneurshipresearch, relationships of personalitycharacteristics with success have beencontroversial (Begley and Boyd 1987;Gartner 1988; Chell, Haworth, and Brearley1991; Rauch and Frese 2000). Our studysupports the proposed relationshipbetween achievement orientation andsuccess.This relationship was fotmd con-sistently in three different samples.Moreover, the level of planning detailmediated the relationship between achieve-ment orientation and success. Detailed plan-ning was a negative mediator in Ireland and

a positive mediator in Germany.Thus, theresults indicate that an achievement orien-tation is related to the use of strategiesthat are culturally successful.

The study has some important impli-cations. Many small business owner/managers do not plan at all—this is trueof our sample and has been found in pre-vious research (see Robinson and Pearce1984). However, this lack of planningneed not necessarily be viewed withalarm. Based on our findings, it would beill-advised to recommend a firm doextensive planning without consideringits cultural context. The results of thisstudy suggest that planning in small-scaleenterprises is related to success otily incultures that value uncertainty avoidance.Our findings on the effects of culture mayallow a reinterpretation of some contra-dictory findings. While studies done inGermany have shown planning to berelated to success Oungbauer-Gans andPreisendorfer 1991), studies done in Anglo-American cultures often found no relation-ship and even questioned the usefulnessof planning (Robinson and Pearce 1984;Lyle et al. 1995).The contingency view ofour study suggests that research on plan-ning/success relationships should takecultural conditions into account.

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