Assignment on: Impact of strategic planning in the smooth functioning
of an organization
Course: Strategic Management
Course Code: MBA 512
Program: MBA (22 Batch)
The Millennium University
Submitted to :
Submitted By :
Mr. Ibrar Alam
MD Abdul Alim Chowdhury
Dean & Head of Depertment
Id; 319MBA1004
The Millennium University
Batch: 22
Submission Date: 17 March 2020
Abstract
The study investigated the effects of strategic planning on organizational performance with
Nigerian Bottling Company Enugu, as a case in hand; the aim is to know whether strategic
planning has effect on the overall performance of the organization. The methodology that was
used for the study is survey design and the target population was 180 members of staff of
Nigerian Bottling Company Enugu while the sample size was 124 which were determined using
Taro Yamen’s formula. The result of the analysis indicate that there is relationship between
effective strategic planning and organizational performance and also that lack of accountability,
lack of commitment and lack of understanding of the role in the execution process are
challenges in the implementation of strategic planning and therefore recommend among
others that Nigerian firms should give more serious attention to strategic planning and finally,
employee welfare should also be given adequate attention for efficiency and effectiveness in
organization.
Introduction
Strategy is designed to help firms achieve competitive advantage. In the broadest sense,
competitive advantage is what allows a firm to gain an edge over its rivals. Competitive
advantage enables a firm to achieve high performance over an extended period of time.
Strategic planning therefore is part of the contemporary managerial tool kits not only for
dealing with the inevitable uncertainty in the management environment but also, for
stimulating organizational performance (Schendel, 2009). Strategic planning is a vital
instrument in an organizational setting. It is defined as the process of determining the future of
overall goal or objective of a business. Planning therefore bridges the gap between where we
are, and where we want to go (Adeleke, 2001). Planning can be a very difficult exercise because
it requires that we consciously determine a course of action and base our decisions on hope,
purpose, and knowledge on estimates. Nevertheless, the performance of any organization
depends on the extent to which the use of strategic planning is put in place in order to
accomplish the set objectives and mission statement of that organization (Adeleke, 2001).
Strategic planning focuses upon long range objectives and short-term priorities. A properly
structured strategic plan enables management to comprehend the relationship of goals,
objectives and action attainment Dawson (2006). In majority of organization in Nigeria,
planning is the most important management tool for performance and for organizations to
perform well, resources must be well utilized and customers well served. To achieve such ends,
all of an organization‟s human and materials resources must be well utilized in the right way
and the right time to create high quality products at minimal cost. Productivity is a summary
measure of the quantity and quality of work performance, with resources utilization taken into
account. It can be measured at the individual, group, or organizations level, Productivity may be
expressed as success into dimensions of organizations performance, effectiveness and
efficiency (Dawson, 2006). Planning on the other hand, is regarded as the most basic of all the
management functions. It involves the selecting from among alternative future course of action
for the organization as a whole and every department or section within it. Furthermore, it
requires selecting organizational objectives and departmental goals, determines and provides a
rational approach to pre-selected objectives. It strongly implies managerial innovation and the
ability to create something (Dawson, 2006).
Strategic Planning and Organizational Performance
Organizational performance is a central concept of public management research and practice. However, it
has been widely debated (Andersen, Boesen, and Pederson 2016; Walker, Boyne, and Brewer 2010). At
the heart of this debate is the idea that an extreme focus on efficiency and effectiveness is
counterproductive to more democratic outcomes (Radin 2006). However, recent conceptualizations of OP
in public organizations have indicated that it is not any one thing. There are different performance
dimensions (including democratic outcomes), different stakeholders assessing performance (including
citizens), and different sources and types of data to measure performance (Andersen, Boesen, and
Pederson 2016; Walker and Andrews 2015; Walker, Boyne, and Brewer 2010).1
Although recent conceptualizations of OP have identified several performance dimensions, theories of SP
have typically focused on its contribution to overall OP. Specifically, the theoretical logic underlying this
relationship is in accord with the Harvard policy model (Andrews 1980), synoptic planning theory
(Dror 1983), and goal‐setting theory (Locke and Latham 2002). The Harvard policy model argues that
organizational success is contingent on the extent to which there is a fit between the organization and its
environment, which can be established using tools such as SWOT (strengths, weaknesses, opportunities,
and threats) analysis (Andrews 1980). Although this concept originated in the corporate strategy
literature, the importance of organization‐environment fit has long been argued by public management
scholars as well (e.g., Vinzant and Vinzant 1996). Indeed, most approaches to SP incorporate attention to
and analysis of both the organization and its environment, including defining strategies to ensure
organization‐environment fit (Bryson 2011).
Synoptic planning theory argues that a systematic, rational, and analytical approach to decision making
generates positive outcomes as opposed to a more intuitive, gut‐feeling approach (Dror 1983). This
framework has received support from scholars writing about public and private organizations (e.g.,
Elbanna 2008; Walker et al. 2010). SP offers such an approach to assisting decision making in the
context of establishing purposes, goals, and strategies. Indeed, at the heart of many SP processes is a
stepwise approach to decision making, incorporating an analysis of the internal and external
organizational environment and resulting in informed decisions based on strategic issues (Bryson 2011).
SP can thus be viewed as a materialization of the Harvard policy model and synoptic planning theory
applied to strategy formulation.
Goal‐setting theory proposes that organizations with goals perform better because goals ensure that
activities and resources are focused on addressing core issues and employees understand the priorities
of the organization (Jung and Lee 2013; Locke and Latham 2002). Scholars writing about both private
and public organizations have subscribed to this argument (e.g., Magnan and St. Onge 2005; Stazyk and
Goerdel 2011). SP has typically resulted in concrete strategies, goals, and plans aimed at addressing
strategic issues (Bryson 2011). It applies aspects of goal‐setting theory to strategy formulation by making
it clear to the organization and its stakeholders what the organizational priorities are and how these will be
addressed.
Although the Harvard policy model, synoptic planning theory, and goal‐setting theory would result in the
expectation that SP contributes to OP, other theoretical frameworks have suggested the exact opposite.
Typically clustered within notions of logical incrementalism (Quinn 1978), these frameworks hold that SP
is overly rational, planned, and fixed. Proponents claim that organizations require more flexible, ongoing
methods of strategy formulation that are particularly open to emerging strategies rather than planned,
deliberate strategies (Mintzberg 1978). Additionally, complexity theory has also argued against SP's
effectiveness by indicating that SP might be adept in straightforward, routine organizations but less so in
complex organizations, systems, or networks (Bovaird 2008).
If these arguments from logical incrementalism and complexity theory hold, SP would have no or a
negative impact on OP across the board. In short, the theoretical debate on whether SP actually “works”
and thus contributes to OP is far from over. A meta‐analysis is needed to inject evidence into this debate.
Moderators in the Strategic Planning–Organizational
Performance Relationship
Scholarship on SP and OP has not always taken into account the contextual reality of public
administration and management (Bryson, Berry, and Yang 2010; Poister, Pitts, and
Edwards 2010). Although they provide arguments on why SP may or may not contribute to OP,
the Harvard policy model, synoptic planning theory, and goal‐setting theory do not necessarily
elucidate the conditions under which SP may have a stronger or weaker impact on OP. Thus, in
this article, three specific conditions (and five moderators) that could influence the impact that
SP has on OP are assessed. The first condition includes two moderators, both of which are
concerned with the conceptualization and subsequent operationalization of SP and OP. In the
second condition, the context in which SP is practiced is likely to influence its effectiveness.
Thus, we examine the practice of SP in public and private organizations and in U.S. and non‐
U.S. settings. The third condition explores the research design implemented in the articles and
examines whether the statistical models included single or multiple data sources. These
moderators help assess the contextual reality of public administration and management, and thus
offer more middle‐range theorizing on SP (Abner, Kim, and Perry 2017).
Formal, Participatory, and Comprehensive Strategic Planning
The aforementioned description of SP centers on the formality of the SP process. Formality is
concerned with the extent to which organizations follow a systematic approach to strategy
formulation, conduct internal and external analyses, define goals, and formulate plans (e.g.,
George, Desmidt, and De Moyer 2016; Poister, Pasha, and Edwards 2013). However, there is
more to SP than its formality, and research has typically included two other aspects of the SP
process: the degree of participation during SP and the comprehensiveness of the SP process.
Integrative stakeholder participation theory argues that stakeholder participation during the
process of decision making generates beneficial outcomes (Hendrick 2003). This approach has
been proposed by scholars of both public and private organizations (e.g., Elbanna 2008; Poister
and Streib 2005). Applied to SP, integrative stakeholder participation is expected to be more
beneficial to SP when a variety of stakeholders participate in it as opposed to only the top policy
makers and managers of the organizations involved. The comprehensiveness of SP is an
indication of an organization's strategic reasoning ability, and it has been identified as an
important characteristic of SP (e.g., Hendrick 2003; Papke‐Shields and Boyer‐Wright 2017). It
suggests that SP includes an analysis of many possible options and alternatives before coming to
an informed decision. Such a comprehensive nature implies that SP is a process of reflection and
careful consideration in which multiple options are generated and contemplated before a final
course is selected. This helps enhance SP's impact on OP. Therefore, we investigate whether
there are differences in the impact of formal SP, participatory SP, and comprehensive SP on OP.
Dimensions of Organizational Performance
Recent studies of OP have stressed that OP is not a unidimensional construct but includes many
different dimensions (Andersen, Boesen, and Pedersen 2016; Hubbard 2009; Walker Boyne, and
Brewer 2010). Dimensions constitute more “classical” concepts such as efficiency, effectiveness,
and financial performance, as well as more “governance”‐related concepts such as societal
outcomes and responsiveness to clients. Importantly, scholars of OP have called for more
insights into which OP dimensions are particularly impacted by management, organization, and
environment variables (Fisk 2010; Walker and Andrews 2015). A question thus emerges as to
whether SP is similarly effective across all OP dimensions. To answer this question, as well as
the call for more multidimensionality in OP research, we assess whether SP's impact on OP
differs when OP is measured as efficiency, effectiveness, responsiveness, outcomes, or financial
performance.
Public and Private Organizations
The differences between public and private organizations have been long‐standing in public
management research and practice relevant to the SP–OP relationship. Several studies have
investigated the differences between public and private organizations. Boyne (2002) found that
public organizations are more bureaucratic and that managers within the public sector tend to be
less committed to their organization. This could make it difficult for SP to “work” in public
organizations because SP processes require a lot of commitment from the organization and its
employees. This could also be hindered by an abundance of procedures and rules. Similarly,
Buelens and Van den Broeck (2007) argued that public sector employees are less extrinsically
motivated than their private sector counterparts, which could make it hard to encourage public
sector employees to engage with SP using external stimuli. Alternatively, Mazzucato (2015)
debunked many of the myths underlying stereotypical public and private sector differences,
implying that the impact of SP on OP could be the same in both sectors. However, this issue has
not been resolved. Thus, we include the public‐private distinction as a moderator to bring some
clarity to this salient and long‐standing debate—indeed, a debate that has been influential in the
adoption of SP in public organizations.
U.S. and Non‐U.S. Contexts
SP development has a strong U.S. footprint. The Harvard policy model was one of the first SP
models to emerge, and it introduced SWOT analysis (Andrews 1980). Other models from U.S.‐
based scholars soon followed, with some specifically focused on the public and nonprofit
sectors. Often‐cited examples are the models of Cohen and Eimicke ( 1998), Montanari and
Bracker (1986), and perhaps the most cited example, Bryson (2011). Similarly, SP public
management scholarship has predominantly emanated from the United States, reflecting trends in
the public sector (see the reviews of Bryson, Berry, and Yang 2010; George and Desmidt 2014;
Poister, Pitts, and Edwards 2010). Obviously, this does not imply that there is no research from
non‐U.S. settings or that SP is not conducted beyond the United States. However, it does raise
the question of whether SP models originating in the United States can still “work” in non ‐U.S.
contexts. Indeed, context matters in public management studies (O'Toole and Meier 2015;
Pollitt 2013), and organizations from the United States share different institutional contexts than
those from, for instance, the European Union, where more political control, stronger regulations,
and dominant labor unions are present (Meier, Rutherford, and Avellaneda 2017). Hence, it is
relevant to identify whether SP is similarly effective at enhancing OP in both U.S. and non‐U.S.
settings.
Common‐ and Multiple‐Source Data
Much of the SP research has used single cross‐sectional surveys to measure the independent and
dependent variables (e.g., Elbanna 2008; George et al. 2018). However, some studies have
included multiple‐source data to measure OP (e.g., Jimenez 2013; Poister, Pasha, and
Edwards 2013). Recent studies in public management (e.g., Jakobsen and Jensen 2015) and
earlier work in psychology and management (e.g., Podsakoff et al. 2003) have indicated that
studies using the same survey‐based source to measure dependent and independent variables
might suffer from common source bias, especially when OP is the dependent variable.
Specifically, variables measured by the same survey have shared common method variance and
when this variance is so high that correlations between the variables are inflated, common source
bias emerges (George and Pandey 2017). To identify whether common source bias has also
influenced research on SP and OP, we assess whether the SP–OP relationship differs when
common‐ or multiple‐source data are used.
Methods
Data
Data were collected following a systematic literature review. First, we defined the scope of our
search—namely, SP as opposed to other variations of planning (e.g., urban planning, rational
planning). Although SP and other planning concepts (such as rational planning) are often related,
they do not necessarily measure the same construct. For instance, rational planning is a
theoretical framework for strategy formulation, whereas SP is a concrete approach used to
formulate strategy. Second, we did a title and abstract search using Web of Science on August
26, 2017. We focused on articles published in journals classified by the Social Sciences Citation
Index because these journals are international in nature and use strict peer‐review processes to
enhance the quality of their articles (Walker and Andrews 2015). We included articles that
mentioned “strategic planning” in the title or abstract. This resulted in 919 hits. Third, we
analyzed the abstracts of these articles to identify whether the articles included some reference to
OP. This resulted in 139 hits. Fourth, we read the articles to elucidate whether they focused on
the relationship between SP and OP and provided quantitative empirical evidence. This resulted
in 28 relevant hits. Finally, we analyzed the citations in the selected 28 articles using Google
Scholar to identify whether any studies had been omitted. This resulted in an additional 3
articles. figure 1 offers an overview of the systematic literature review. (A list of the studies can
be found in appendix A in the Supporting Information online.)
Figure 1
Open in figure viewerPowerPoint
Systematic Literature Review Process
Our meta‐analysis synthesized the findings of 31 empirical articles, commensurate with other
meta‐analyses in our field (e.g., Gerrish 2015; Harari et al. 2017; Walker 2013). These articles
included 87 correlations between SP and OP. We present an overview of the articles and their
assigned codes for our moderators in appendix B in the Supporting Information. The mean
sample of our articles was 278 organizations, with a minimum of 14 and a maximum of 1,815.
On average, the articles had about three correlations between SP and OP, with the minimum
being one and the maximum being nine. Most of the articles focused on formal SP (27), but
participatory SP (7) and comprehensive SP (6) were also assessed. In relation to OP, 10 articles
focused on effectiveness, 5 on efficiency, 4 on responsiveness, 3 on outcomes, 4 on multiple
dimensions, and 15 on financial performance. Sixteen articles focused on private organizations,
10 on public organizations, and 5 included both. Fourteen articles were from the United States,
15 from a non‐U.S. setting, and 2 from both. Finally, 24 articles used single ‐source data, and 9
used multiple‐source data.
Meta‐Analytical Procedure
This study used a meta‐analysis, or an “analysis of analyses,” defined as “the statistical analysis
of a large collection of analysis results from individual studies for the purpose of integrating the
findings” (Glass 1976, 3). Our meta‐analysis relied on the guidelines proposed by Ringquist
(2013) using the statistical software package Stata. Four steps were implemented.
Identifying effect sizes
The effect size for each relationship between SP and OP identified in an article was calculated.
Correlation coefficients are popular and easily interpretable across the social and behavioral
sciences. Thus, they are the preferred effect size for meta‐analyses in public management and
policy (Ringquist 2013). Most of our articles (71 percent) reported correlation tables, making it
easier to include the correlation coefficients. For those articles that did not provide correlation
tables, we calculated the correlation coefficient based on the t‐statistic (t) and the degrees of
freedom (df) using the following formula:
In turn, the t‐statistic was calculated by dividing the unstandardized regression coefficient by its
standard error. To maximize the number of correlations, we allowed studies to have multiple
effect sizes, a choice that had consequences for our meta‐regression analysis (Ringquist 2013).
However, as an overall robustness check (i.e., to account for studies clustering a large amount of
correlations), we reran the meta‐analysis using only one average correlation per study.
CONCLUSIONS
Judging from the various computation analysis and findings, the
results revealed some pertinent fact from which the researcher then
drew certain conclusion.
Considering the high percentage in favour of the three tested
hypotheses, it can be reasonably concluded that at 95% confidence,
strategic planning enhances performance and survival.
Most of the respondents strongly agree that strategic planning
enhances better organizational performance, as this also constituted
part of the hypotheses used for this study. Few agree while just a
little of the respondents were undecided. Hence, it can be deducted
from the above responses that strategic planning enhances better
organizational performance.
Almost all of the respondents strongly agree and agree that there is a
link between strategic planning and organization’s survival, which
was the final hypothesis tested in the study, while just a very few of
the respondents were undecided, none of the respondents disagree
nor strongly disagree. Hence, it can be concluded that there is a link
between strategic planning and organization’s survival, using the
above responses as proves.
RECOMMENDATIONS
Based on the findings from the study the following recommendations
are made. Having discovered that organizational performance and
survival is a function of strategic planning, Organizations should
accord priority attention to the elements of strategic planning for
example; having a documented mission statement, a future picture
(vision) of the organization, organizations should establish core
values i.e., organization’s rules of conduct, set realistic goals,
establishment of long term objectives (this has to be measurable and
specific) and the development of action (strategic) plans and its
implementation and adequate follow-up.
Finally, since it was discovered that environmental factors affect
strategic planning intensity, organizations should make adequate
environmental analysis both the internal and external analysis, this
can be done through the SWOT analysis which indicates the
Organization’s strengths, weaknesses, opportunities and threats.
References
Aborisade, F., 1997. Research methodology a student handbook.
Multi-Firm Limited Publisher.
Akinyele, S.T., 2007. A comparative analysis of strategic marketing
management of downstream oil industry in Nigeria. An Extract from
Doctoral Dissertation Covenant UniversityOta-Nigeria.
Allison, M. and J. Kaye, 2005. Strategic Planning for Non-Profit
Organizations a Practical Guide and Work Book. Wiley Publishers,
New York, ISBN: 978-0-471-44581-4.
Ansoff, H.I., 1991. Critique of henry mintzbergs the design school
reconsidering the basic premises of strategic management. Strategic
Manage. J., 12: 449-461.
