The impact of performance measurement in strategic planning

Abstract

Purpose

To investigate the impact of performance measurement in strategic planning process.

Design/methodology/approach

A large scale survey was conducted online with Warwick Business School alumni. The questionnaire was based on the Strategic Development Process model by Dyson. The questionnaire was designed to map the current practice of strategic planning and to determine its most influential factors on the effectiveness of the process. All questions were close ended and a seven‐point Likert scale used. The independent variables were grouped into four meaningful factors by factor analysis (Varimax, coefficient of rotation 0.4). The factors produced were used to build regression models (stepwise) for the five assessments of strategic planning process. Regression models were developed for the totality of the responses, comparing SMEs and large organizations and comparing organizations operating in slowly and rapidly changing environments.

Findings

The results indicate that performance measurement stands as one of the four main factors characterising the current practice of strategic planning. This research has determined that complexity coming from organizational size and rate of change in the sector creates variation in the impact of performance measurement in strategic planning. Large organizations and organizations operating in rapidly changing environments make greater use of performance measurement.

Research limitations/implications

This research is based on subjective data, therefore the conclusions do not concern the impact of strategic planning process' elements on the organizational performance achievements, but on the success/effectiveness of the strategic planning process itself.

Practical implications

This research raises a series of questions about the use and potential impact of performance measurement, especially in the categories of organizations that are not significantly influenced by its utilisation. It contributes to the field of performance measurement impact.

Originality/value

This research fills in the gap literature concerning the lack of large scale surveys on strategic development processes and performance measurement. It also contributes in the literature of this field by providing empirical evidences on the impact of performance measurement upon the strategic planning process.

Citation

Tapinos, E., Dyson, R.G. and Meadows, M. (2005), "The impact of performance measurement in strategic planning", International Journal of Productivity and Performance Management, Vol. 54 No. 5/6, pp. 370-384. https://doi.org/10.1108/17410400510604539