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Is Strategic Planning Worth the Effort? A Study of Firm Performance Versus Planning Comprehensiveness in Australia

Published online by Cambridge University Press:  18 September 2015

Peter Devenish  and
Tom Fisher
Peter Devenish
Affiliation:
Campbelltown College of TAFE, SWSIT, Campbelltown NSW 2560, Australia, Tel: +61 2 4620 1790, Email: che@flex.com.au
Tom Fisher
Affiliation:
School of Management, University of Technology, Sydney, NSW 2007, Australia, Tel: +61 2 9514 3620, Email: tfisher@uts.edu.au
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Abstract

The planning-performance literature suggests that there is a weak positive correlation between strategic planning and financial performance. This study has been undertaken to determine whether this weak positive correlation is true for Australian firms.

Strategic planning for the purposes of this study is arranged in three levels of planning complexity. A sample of 77 listed firms was surveyed to determine their level of planning complexity, and this was correlated with the firm's financial performance over a three year period.

A range of statistical tests did not reveal any significant correlation between strategic planning at any of the three levels and the financial performance of the firm. This negative finding is generally in line with other recent studies conducted in Australia, the United States and the United Kingdom.

However, positive correlations were found with several subjective performance measures, suggesting that respondents generally believe that strategic planning is helping their company.

Keywords

Strategic planningplanning complexityfinancial performance
Type
Research Article
Information
Journal of Management & Organization , Volume 6 , Issue 1 , January 2000 , pp. 1 - 13
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2000

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