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

Peter Devenish and Tom Fisher

Journal of Management & Organization, 2000, vol. 6, issue 1, 1-13

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.

Date: 2000
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