Strategic planning and organization performance in a volatile economic environment

by Campbell, Ronna H., Ph.D., CAPELLA UNIVERSITY, 2010, 145 pages; 3432492


Research suggests that strategic planning is positively linked to organizational performance. Yet many organizations do not plan, do not plan effectively, or are dissatisfied with their existing planning systems. Strategy scholars also disagree on the benefits of traditional analytical approaches to planning in today's dynamic business environment. Past planning and performance linkage studies focused on planning formality or sophistication with various, often invalidated, means to measure planning, and no empirical studies have examined the relationship between planning and performance in an unstable economic environment. To address this research gap, a validated multidimensional measurement model was used to assess the use of seven strategic planning tools with a sample of CEOs and/or business owners of firms from four industries. Revenue and profit growth during 2008-2009 was used to measure performance. This research provides insight which could encourage the increased use of planning tools in organizations and lead to improved organizational performance. Results indicated high revenue and profit growth companies placed more emphasis on strategic planning tool usage than low revenue and profit growth firms, and large companies placed more emphasis on tool usage than small firms. No significant differences in planning emphasis were found across the four industry groups. Most high performance companies strongly emphasized all seven planning tools versus less than 25% of low performance companies. Short-term action plans was most strongly emphasized by all groups, and emphasis on all planning tools increased during the 2008-2009 recessionary period. Results also suggest that high performance companies benefit from business management education, and that large firms are more likely to be high performers.

AdviserClifford L. Butler
Source TypeDissertation
Publication Number3432492

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