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Does it pay to plan?: Strategic planning and financial performance

Author

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  • Gregory A. Baker

    (Food and Agribusiness Institute, Santa Clara University,, 500 El Camino Real, Santa Clara, CA 95053-0396., E-mail: gbaker@scu.edu)

  • Joel K. Leidecker

    (Food and Agribusiness Institute, Santa Clara University,, 500 El Camino Real, Santa Clara, CA 95053-0396., E-mail: gbaker@scu.edu)

Abstract

Previous research on the effects of strategic planning on firm performance has yielded inconsistent and inconclusive findings. In this study, we use a recently validated measurement model of strategic planning to examine the planning-performance relationship in the California processing tomato industry. Results indicate a strong correlation between the degree of emphasis firms place on strategic planning and financial performance. Moreover, several specific strategic planning tools, specifically, the use of a mission statement, long-term goals, and ongoing evaluation, were also more heavily emphasized by high-performing firms. These results suggest that strategic planning does pay off in terms of improved financial performance and that some planning tools may have a significant impact. [Econ-Lit citations: L100, L660] © 2001 John Wiley & Sons, Inc.

Suggested Citation

  • Gregory A. Baker & Joel K. Leidecker, 2001. "Does it pay to plan?: Strategic planning and financial performance," Agribusiness, John Wiley & Sons, Ltd., vol. 17(3), pages 355-364.
    • Handle: RePEc:wly:agribz:v:17:y:2001:i:3:p:355-364
    DOI: 10.1002/agr.1021
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    References listed on IDEAS

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    1. Robin M. Hogarth & Spyros Makridakis, 1981. "Forecasting and Planning: An Evaluation," Management Science, INFORMS, vol. 27(2), pages 115-138, February.
    2. J. Scott Armstrong, 1982. "The value of formal planning for strategic decisions: Review of empirical research," Strategic Management Journal, Wiley Blackwell, vol. 3(3), pages 197-211, July.
    3. Lawrence C. Rhyne, 1987. "Contrasting Planning Systems In High, Medium And Low Performance Companies," Journal of Management Studies, Wiley Blackwell, vol. 24(4), pages 363-385, July.
    4. J. Scott Armstrong, 1986. "The value of formal planning for strategic decisions: Reply," Strategic Management Journal, Wiley Blackwell, vol. 7(2), pages 183-185, March.
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    Cited by:

    1. Chao-Chien Chen & Hsiu-Ping Yueh & Chaoyun Liang, 2016. "Strategic Management of Agribusiness: Determinants and Trends," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 12(4), pages 69-97.
    2. Lopes, Miguel Vieira & Ross, R. Brent, 2013. "A Comparative Analysis of Strategic Planning Practices in Michigan Agribusiness Firms: 1992 vs. 2012," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 16(3), pages 1-30, September.
    3. Gregory A. Baker, 2003. "Strategic Planning and Financial Performance in the Food Processing Sector," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 470-482.

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