Does Strategic Planning Improve Organizational Performance? A Meta‐Analysis

Abstract

Strategic planning is a widely adopted management approach in contemporary organizations. Underlying its popularity is the assumption that it is a successful practice in public and private organizations that has positive consequences for organizational performance. Nonetheless, strategic planning has been criticized for being overly rational and for inhibiting strategic thinking. This article undertakes a meta-analysis of 87 correlations from 31 empirical studies and asks, Does strategic planning improve organizational performance? A random-effects meta-analysis reveals that strategic planning has a positive, moderate, and significant impact on organizational performance. Meta-regression analysis suggests that the positive impact of strategic planning on organizational performance is strongest when performance is measured as effectiveness and when strategic planning is measured as formal strategic planning. This impact holds across sectors (private and public) and countries (U.S. and non-U.S. contexts). Implications for public administration theory, research, and practice are discussed in the conclusion. Evidence for Practice• Strategic planning has a positive, moderate, and significant impact on organizational performance in the private and public sectors, across international settings. • The findings suggest that strategic planning should be part of the standard managerial approaches in contemporary organizations and contradict many of the critiques of strategic planning. • The formality of the strategic planning processes (i.e., the extent to which strategic planning includes internal and external analyses and the formulation of goals, strategies, and plans) is important to enhancing organizational performance. • Strategic planning is particularly potent in enhancing organizational effectiveness (i.e., whether organizations successfully achieve their goals), but it should not necessarily be undertaken in the hope of achieving efficiency gains.

Editorial

“…This analysis suggested that, on average, strategic planning (when formal and comprehensive) has a positive impact on organizational performance; and this impact becomes particularly potent when organizational performance is measured as an organization's ability to achieve its goals (i.e. effectiveness) (George et al, 2019). It is noteworthy that George et al's meta-analysis identified the importance of strategic planning being formal as well as comprehensive.…”

“…A number of published research studies has shown, first, that individual public sector managers often feel strategic planning has a range of benefits for them (see Flynn & Talbot, 1996); and, second, that strategic planning makes a positive contribution to public service performance at the organizational level (for example Johnsen, 2016;Poister, Pasha, & Edwards, 2013). A recent meta-analysis (incorporating evidence from almost 9,000 public and private sector organizations) has now shown that strategic planning 'works' (George, Walker, & Monster, 2019). This analysis suggested that, on average, strategic planning (when formal and comprehensive) has a positive impact on organizational performance; and this impact becomes particularly potent when organizational performance is measured as an organization's ability to achieve its goals (i.e.…”

Images of Coordination: How Implementing Organizations Perceive Coordination Arrangements

“…Organizations sometimes fear a loss of power, autonomy, or control over budget (Perri 6 et al , 66; Peters ; Pollitt ; Tosun and Lang ). Moreover, the government apparatus in most countries has strong sectoral “silos” and many (semi)autonomous agencies, with an emphasis on accountability for organization‐specific objectives and targets (Bouckaert, Peters, and Verhoest ; Christensen and Lægreid ; George, Walker, and Monster ). As the results of HPPs often are not immediately visible in organization‐specific indicators, “minding the own shop” is the first priority (Perri 6 et al , 66).…”

A Guide to Benchmarking COVID‐19 Performance Data

“…Two central principles based on findings from recent meta‐analyses published in Public Administration Review lie at the heart of the developed guide: (1) for performance management to enhance public service performance, it is important that performance data can be (and is) benchmarked between different entities (Gerrish 2016); and (2) decisions grounded in an understanding of capacity and environment, strengths and weaknesses, and systemic, data‐based analyses are more likely to enhance public service performance (George, Walker, and Monster 2019). These principles run through the entire development process of the guide to benchmarking COVID‐19 performance data.…”