Abstract
How does the adoption of formal long-range planning procedures affect a firm's economic performance? The authors have studied firms in six industrial groups and have summarized their findings. Company comparisons, which make up the first phase of the study, show that formal planners significantly outperform informal planners with respect to five economic measures. In addition, they bettered the records they achieved before formal planning was adopted. The second phase of the study is an industry-by-industry analysis. Formal planning firms in the drug, chemical, and machinery industries consistently outperform informal planners; no clear associations can be established in the food, oil, and steel industries. Positive economic performance and formal planning are most strongly related among the medium-size companies in rapidly changing markets.
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