The Value of Formal Planning for Strategic Decisions: Review of Empirical Research

Strategic Management Journal, Vol. 3, pp. 197-211, 1982

Posted: 31 Mar 2005

See all articles by J. Scott Armstrong

J. Scott Armstrong

University of Pennsylvania - Marketing Department

Abstract

A review of research from organizational behavior supported the guidelines by corporate planners: that is, use an explicit approach for setting objectives, generating strategies, evaluating strategies, monitoring results, and obtaining commitment. To determine whether these findings could be applied to strategic decision making in organizations, a review was made of all published field research on the evaluation of formal planning. Formal planning was superior in 10 of the 15 comparisons drawn from 12 studies, while informal planning was superior in only two comparisons. Although this research did not provide sufficient information on the use of various aspects of the planning process, mild support was provided for having participation by stakeholders. Formal planning tended to be more useful where large changes were involved, but, beyond that, little information was available to suggest when formal planning is most valuable. Future research should assess the formal planning process, the situation in which it is used, and its effects on the total system.

Keywords: Formal planning, strategic decision, management, coporate planning

Suggested Citation

Armstrong, J. Scott, The Value of Formal Planning for Strategic Decisions: Review of Empirical Research. Strategic Management Journal, Vol. 3, pp. 197-211, 1982. Available at SSRN: https://ssrn.com/abstract=680686

J. Scott Armstrong (Contact Author)

University of Pennsylvania - Marketing Department ( email )

700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States
215-898-5087 (Phone)
215-898-2534 (Fax)

HOME PAGE: http://marketing.wharton.upenn.edu/people/faculty/armstrong.cfm

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