An Investigation of the Relationship Between Strategic Planning Practices and Corporate Performance in Australian Companies

Tod,Andrew (1991) An Investigation of the Relationship Between Strategic Planning Practices and Corporate Performance in Australian Companies The University of Queensland:

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Author Tod,Andrew
Title of report An Investigation of the Relationship Between Strategic Planning Practices and Corporate Performance in Australian Companies
Formatted title


Publication date 1991
Place of publication The University of Queensland
Total pages 185
Language eng
Subjects 1503 Business and Management
Formatted abstract
This study examined the relationship between the strategic planning practices and the corporate performance of companies operating in Australia.

Previous empirical research on this relationship was reviewed. As a result of this review, an eclectic approach was used in developing the methodology for this study.

A questionnaire was sent to two hundred and thirty four companies listed in the Business Review Weekly's Top 1000 Companies for 1990 to obtain a profile of their planning practices. Ninety four useable responses were received from companies across ten industry sectors.

The performance of the companies was assessed using financial ratios and Altman's Z factor. The performance measures were chosen so that the companies' past, present and future performance could be assessed. A self assessment of performance with respect to the companies' competitors was included in the questionnaire.

The companies were classified as Established Planners, New Planners and Non Planners, depending upon the length of time they had been developing written strategic plans.

The performance of each group was compared using rigorous statistical techniques where the sample characteristics permitted. It was found that there was no significant difference between the performance of the planning groups along any of the performance dimensions.

The a priori expectation, that there would be a positive correlation between planning and performance, was nullified. The presence of mitigating or vitiating exogenous influences, that were unable to be corrected for, may have contributed to this.

The findings of this study suggest that managers of companies operating in Australia should not concentrate on the use of financial measures to assess the performance of their strategic planning systems.

The findings of previous research into this relationship are dichotomous, split between no relationship and a positive correlation. The absence of consensus on this issue raises the point - is the correct question being asked? It may be prudent to investigate the circumstances under which strategic planning can be expected to lead to superior performance.

Further research which examines the causal factors linking planning and performance is needed before a definitive statement can be made as to the direction and the strength of the relationship between a firm's strategic planning practices and its performance.


Document type: Research Report
Collection: MBA reports
 
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Created: Fri, 24 Dec 2010, 09:42:49 EST by Mr Yun Xiao on behalf of The University of Queensland Library