Strategic planning–organizational performance relationship: Perspectives of previous studies and literature review

Abstract

Purpose: The purpose of this paper is to explore the strategic planning–organizational performance relationship (SP–OP). It is based on reviewing and analyzing previous studies and literature. A total of 15 related studies have been chosen from well-renowned electronic academic resources and databases (e.g. Emerald, Elsevier, ProQuest, Sage, Wiley Online, and University Utara Malaysia, etc.). The assumed SP–OP relationship considered some of the important contingent variables identified by these studies as: formal strategic plan (FSP), sort, size, and environment (turbulent) of business.Design/methodology/approach: The main methods being used for this article were comprehensive review and analysis of related studies and literature review for development of hypotheses. Well prominent electronic resources and databases have been selected. Navigating and selecting relating articles was based on using same keywords of this article title (impact of, relationship, strategic, planning, organizational performance), and excluding those are not. The article hypothesis is constructed based on these studies, literature review and my own observations. The criterion of assessing is made by formulating and drawing comparative table. The contents of the table (refer to Appendix A) are author/s and article titles, purpose, and the findings. In addition, two important columns are comparing this article hypothesis with selected articles’ and whether they are in congruence or not have been identified.Findings: Despite the large number of studies examining SP–OP relationship, the results have been inconclusive. Findings are ranging from positive, negative, and/ or to no relationships. Eight studies support the FSP–OP relationship; nevertheless, these supporting studies have come up with findings of many previous studies which evidenced inconclusive and unquantifiable. SP–OP relationship in banking and tourism sectors is positively explored. Intensity of SP in banking sector causes better performance. Four studies are from bank sector. Three of them fully agreed on the positive SP–OP relationship (especially FSP–OP). Although SP–OP relationship has been largely neglected in tourism, hospitality industry, and healthcare, it had showed a significant relationship. In regard to impact of business size on SP–OP relationship: five studies are devoted to small business size, three of them found no significant relationship. The impact of firm size on SP–OP relationship has not yet reached a final conclusion. The majority of studies and literature suggest the non-existence of this relationship. The impact of FSP on OP is varied and contradictory in instable environment. Some findings of studies support this hypothesis, while others found difficult to formulate and implement a plan in such environment. There are five studies tried to explore this relationship. Three of them support this hypothesis and two found no relationship.Research limitations/implications: The big confines to empirically conduct this study is the unwillingness of companies to freely participate. Also, such a study or alike requires longitudinal method using both financial and non-financial metrics. This limitation is in alignment with Glaister et al. who recommended incorporation of other performance measures, such as quality and employee satisfaction, in addition to financial measures which would enrich our understanding of the planning–performance relationship.Originality/value: Chosen studies have been selected from different countries. These differences will enrich the study with diverse perspectives and findings.

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