Does Strategic Planning Improve Organizational Performance? A Meta‐Analysis

• Date: 01 November 2019
• DOI: http://doi.org/10.1111/puar.13104
• Author: Richard M. Walker,Joost Monster,Bert George
• Published date: 01 November 2019

810 This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.

Research Article

Joost Monster is associate consultant at

Focus Orange in the Netherlands. He holds

a research master in public administration

and organizational science from Utrecht

University and sits on the board of Editors

of Public Note, a science dissemination

outlet.

E-mail: monster.joost@gmail.com

Richard M. Walker holds the Chan

Hon-pun Professorship in Behavioral and

Policy Sciences, is Dean of the College of

Liberal Arts and Social Sciences, Director

of the Laboratory for Public Management

and Policy and Chair Professor in the

Department of Public Policy at City

University of Hong Kong.

E-mail: rmwalker@cityu.edu.hk

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.

Bert George

Ghent University, and Erasmus University Rotterdam

Bert George joined the faculty in

the Department of Public Governance

and Management at Ghent University,

Belgium, in October 2019. Previously,

he was assistant professor of public

management in the Department of Public

Administration and Sociology at Erasmus

University Rotterdam. His research focuses

on strategy, behavior, and performance in

public organizations using experimental,

observational, and meta-analytical research

methods.

E-mail: bert.george@ugent.be

Does Strategic Planning Improve Organizational

Performance? A Meta-Analysis

Richard M. Walker

City University of Hong Kong

Joost Monster

Focus Orange

Strategic planning (SP) is one of the more popular

management approaches in contemporary

organizations, and it is consistently ranked

among the five most popular managerial approaches

worldwide (Rigby and Bilodeau 2013; Wolf and

Floyd 2017). Typically operationalized as an approach

to strategy formulation, SP includes elements such

as analysis of the organization’s mandate, mission,

and values; analysis of the organization’s internal and

external environment; and identification of strategic

issues based on these analyses and the formulation of

strategies, goals, and plans to address the issues (Bryson

2011). Based on arguments drawn from the Harvard

policy model (Andrews 1980), synoptic planning

theory (Dror 1983), and goal-setting theory (Locke

and Latham 2002), SP can be expected to positively

contribute to organizational performance (OP). The

Harvard policy model implies that organizational

strategies should be geared toward finding a fit

between the organization and its environment

(Andrews 1980). Synoptic planning theory argues that

strategic decisions should be grounded in thorough

analysis and a systematic approach to decision-

making (Dror 1983). And goal-setting theory argues

that concrete goals, strategies, and plans should be

devised to understand what an organization wants

to achieve and how (Locke and Latham 2002). SP

ideally offers an approach to strategy formulation that

includes procedures, tools, and practices geared toward

incorporating these theoretical arguments during

strategy formulation—although it should be noted

that much variation exists in how organizations “do”

SP (Bryson, Edwards, and Van Slyke 2018; Ferlie and

Ongaro 2015). The popularity of SP seemingly offers

credence to the idea that it contributes to OP. After all,

why would SP be so popular if practitioners believed it

did not provide any benefits?

SP’s prominence in the public sector grew apace

from the 1980s onward (George and Desmidt 2014).

Public Administration Review,

Vol. 79, Iss. 6, pp. 810–819. © 2019 The

Authors. Public Administration Review

published by Wiley Periodicals, Inc. on behalf of

The American Society for Public Administration.

DOI: 10.1111/puar.13104.