Strategic planning and performance : extending the debate

Abstract

This article extends the debate regarding the relationship between strategic planning and performance. It addresses criticism of previous empirical studies that have largely investigated direct and bi-variate relationships , producing equivocal results. The current study investigates the mediating effects of four rypcs of flexibility on the strategic planning and perfor mance relationship. Flexibility is defined as the extent to which new and alternative decisions are generated and considered in strategic planning, allowing for positive organizational change and adaptation to environmental turbulence. Through investigating simultaneous equations in a structural equation model, we find that two types of flexibility
medi ate the relationship between strategic planning and financial performance, while the other two types mediate the relationship between strategic planning and non- financial performance. The results are new empirical insights that have not been previously reported.