Abstract
Strategic planning is important for strategic management of companies. The purpose of this study is to explore the impact of strategic planning on financial performance of major industrial enterprises of Turkey. Our findings show that many domestic and foreign firms in our sample have a strategic process in place. It is an annual process and considered a very important organizational activity. This paper is one of the few studies to examine the strategic planning process in a sample of firms from a transitional economy. It can be considered a longitudinal study because it examines a set of institutions to identify changes in their performance over time, as they incorporate the use of strategic tools in a dynamic competitive environment. The findings of this study provide a contribution to our understanding of the nature and practice of strategic planning in Turkish companies and possibilities of correlations between their efforts and performance.
Highlights
Even though the concept of strategy may have had its original underpinnings in the military and its war efforts, over many decades it has become a mainstay and a major process in for-profit and not-for-profit organizations
This paper is one of the few studies to examine the strategic planning process in a sample of firms from a transitional economy. It can be considered a longitudinal study because it examines a set of institutions to identify any changes in their performance over time, as they incorporate the use of strategic tools in a dynamic and evolving competitive environment
Even though the findings show a significant increase in the importance and use of strategic tools and processes in Turkey, a transitional economy, the basic question about the link/positive correlation between the use of strategic tools and company performance remains somewhat unanswered
Summary
Even though the concept of strategy may have had its original underpinnings in the military and its war efforts, over many decades it has become a mainstay and a major process (organizational activity) in for-profit and not-for-profit organizations. These organizations have refined and used the process to understand issues which they cannot control but have a significant impact on their survival and success, and use their limited resources and competencies to improve their competitive positions. Because one of the objectives of this process is to develop competitive advantages leading to superior organizational performance, the relationship between the firm’s strategic planning efforts and firm performance received considerable attention from academics, researchers, and business executives. A recent study by Gibson and Cassar (Gibson & Cassar, 2005) cast doubt on the causal relationship between planning and performance, even in small firms
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