Does it pay to plan?: Strategic planning and financial performance

Abstract

Abstract Previous research on the effects of strategic planning on firm performance has yielded inconsistent and inconclusive findings. In this study, we use a recently validated measurement model of strategic planning to examine the planning‐performance relationship in the California processing tomato industry. Results indicate a strong correlation between the degree of emphasis firms place on strategic planning and financial performance. Moreover, several specific strategic planning tools, specifically, the use of a mission statement, long‐term goals, and ongoing evaluation, were also more heavily emphasized by high‐performing firms. These results suggest that strategic planning does pay off in terms of improved financial performance and that some planning tools may have a significant impact. [Econ‐Lit citations: L100, L660] © 2001 John Wiley & Sons, Inc.

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