Contingency effects of firm structure and environmental uncertainty on strategic planning process and firm performance: Evidence from UAE enterprises

• Author: Houyem Chaib Lababidi,Mustafa Colak,Mumin Dayan,Reem Lababidi
• Published date: 01 March 2020
• Date: 01 March 2020
• DOI: http://doi.org/10.1002/jsc.2325

RESEARCH ARTICLE

Contingency effects of firm structure and environmental

uncertainty on strategic planning process and firm

performance: Evidence from UAE enterprises

Houyem Chaib Lababidi

1

| Reem Lababidi

2

| Mustafa Colak

3

| Mumin Dayan

4

1

ICD Business School, Paris, France

2

IMTI International Management Institute,

Louveciennes, France

3

Department of Business Administration,

Social Sciences University of Ankara, Ankara,

Turkey

4

Department of Business Administration,

United Arab Emirates University, Al Ain,

United Arab Emirates

Correspondence

Mustafa Colak, Social Sciences University of

Ankara, School of Political Sciences,

Department of Business Administration,

06050 Altında

g-Ulus, Ankara, Turkey.

Email: mustafa.colak@asbu.edu.tr

Abstract

Previous research has reported inconsistent findings concerning the relationship

between strategic planning and organizational performance and pointed out that a

reason for this ambiguity is the fact that most research has traditionally focused on

the direct effects of strategic planning on performance, taking insufficient consider-

ation of the influence of several contextual variables on this relationship. Following

this observation, this study adopts the perspective of contingency theory and

develops six hypotheses predicting that strategic planning is positively related to

organizational performance only when the two contextual variables of organizational

structure and environmental uncertainty are aligned individually and jointly with the

strategic planning process. Data were collected on senior executives and managers

involved in formulating strategies in the United Arab Emirates (UAE) enterprises and

analyzed by using multiple regression analysis involving moderated moderation.

Results supported all the six hypotheses, confirming the central assumption of the

present study that, at least in the UAE setting, a holistic or multivariate fit approach

to contingency theory can shed light on the planning–performance relationship. The

theoretical and managerial implications of the study findings are finally discussed.

1|INTRODUCTION

Despite more than four decades of research, the question of whether

strategic planning has an impact on organizational performance

remains unresolved (Al-Shaikh, 2001; Al-Shammari & Hussein, 2007).

Various researchers have attributed inconclusive findings on the issue

to methodological shortcomings, such as most studies being too

focused on the direct effects of strategic planning on performance,

inconsistenciesin the operationalization of strategicplanning, and stud-

ies being limited to financial measures (e.g., Greenley, 1994; Phillips &

Moutinho, 2014; Rudd, Greenley, Beatson, & Lings, 2008). Regardless

of the reasons for inconclusive findingsand despite the questions over

its value, strategicplanning continues to enjoy a high levelof popularity

in practice (Wolf & Floyd, 2013) and academia (Phillips & Moutinho,

2014). However, academic research on strategic planning has failed to

keep pace with practice (Phillips & Moutinho, 2014) and has been on

the wane sincethe 1990s (Wolf & Floyd, 2013).

The varying opinions over the benefits of strategic planning and

the paucity of recent research on the topic impelled the researchers

of the present study to give a modestmomentum to this intriguing line

of research by revisiting it from a contingency theory perspective. In

line with this perspective, we argue thatit is not the strategic planning

itself that impacts organizational performance, but it is the individual

and simultaneous fit of the planning process with the contextual vari-

ables of organizational structureand environmental uncertainty.

Our arguments generated six hypotheses shown in Figure 1.

While the dotted lines in the figure indicate the existence of fit

between and among the variables of interests, the solid lines indicate

the hypotheses associated with the postulated fit relationships. The

dashed lines in the figure, on the other hand, represent the control

JEL Classification code: M10.

DOI: 10.1002/jsc.2325

Strategic Change. 2020;29:241–252. wileyonlinelibrary.com/journal/jsc © 2020 John Wiley & Sons, Ltd. 241