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Long‐term performance contracts are awarded to top management in order to provide incentives to maximize shareholder value. We test the incentive hypothesis using 350 firms, one half of which has adopted long‐term performance plans over the period 1971–80. The analysis uses performance indicators such as earnings per share (EPS), rate of return on assets (ROA), rate of return on equity (ROE), rate of return on investment (ROI), and stock returns (ASR). In addition to using a control group of firms that did not adopt plans, the test period consists of a control period (six years prior to plan adoption) and a test period (six years following plan adoption). The results support the incentive hypothesis in that all performance indicators for the test firms improved compared to prior performance, but the performance of test firms in the period subsequent to plan adoption when compared to the control firms was not significantly different.

This study examined the relation between performance plan adoption and profitability. It posits that the nature of this relation varies with the ownership structure of the firm, arguing that following performance plan adoption, profitability will increase in owner‐controlled firms. Results based on data from a usable sample of 70 US firms support this contention with respect to owner‐controlled firms but not manager‐controlled firms.

Performance plans, a form of executive compensation plan, are designed to reward management for improved performance over the long run. Various accounting measures can be used to evaluate this performance: return on assets (ROA), return on equity (ROE), and earnings per share (EPS) are examples. This study employs these, as well as cash flow measures, on a sample of matched performance plan adopting and control firms to examine whether there is a difference in performance associated with the adoption of a plan. The results indicate that adopting firms display significantly greater growth in ROA, ROE, and working capital from operations to total assets (WCFO) than do control firms. This result continues to hold for ROE, but not ROA or WCFO, after controlling for economy‐wide growth.

Executive compensation plans have come under increasing criticism. A new approach—value performance plans—offers a promising way to motivate executives to make decisions consistent with the long‐term interests of their companies.

This study aims to determine the effect of individual and group variable pay plans on pay satisfaction among Canadian workers from six occupational groups.

Theoretical foundations rest on the discrepancy model of pay satisfaction and equity theory. Canadian national data from the Workplace and Employee Survey (WES) were used to test the hypotheses.

The results show that individual and group variable pay plans act differently on workers’ pay satisfaction. For individual pay plans, being eligible for a variable pay plan, and thereby having one's performance rewarded, has no effect on pay satisfaction. Workers on variable pay plans are more satisfied with their pay only when they receive performance‐dependent payouts. In short, they want to be rewarded not only for performance but also for effort. For group pay plans, not receiving payouts has no negative effect on pay satisfaction. In contrast, receiving payouts creates pay dissatisfaction. Individual and group plans have a distinct effect on pay satisfaction by occupational group.

Managers can make informed decisions regarding the adoption of variable pay plans and their implementation.

This study sheds light on the link between variable pay and pay satisfaction. It improves our understanding of the mechanism by which variable pay affects pay satisfaction: the effort – performance – pay link (i.e. risk and perceived fairness of the allocation).

The purpose of this paper is to examine the inventory performance effect of advanced material planning modes and analyse how internal and external contextual difficulties moderate this relationship. This study also identifies avenues for future research.

The empirical analysis uses a survey of material planning for purchased items in 292 Swedish manufacturing and wholesaling companies. Three dimensions of inventory performance are dependent variables: material planning performance, inventory turnover rate, and service level.

Advanced material planning modes are directly associated with material planning performance, but this study could not verify direct associations with inventory turnover rate and service-level performances. External and internal contextual difficulties have direct effects on all inventory performance dimensions and moderate the inventory performance effect of advanced material planning modes. The moderating effect is stronger in non-difficult contexts, for which advanced material planning has significant inventory performance effects. Demand- and human-related contextual dimensions are especially critical.

The study identifies the following guidelines for companies to consider in order to unlock the potential of advanced material planning: consider full implementation of advanced material planning in non-difficult contexts; minimise the plan variability effects of high parameter revision and planning frequencies; minimise the need for, and use of, manual modification of planned orders before release; reduce demand uncertainty and variability; and secure appropriate human skills and working time.

This study somewhat contradicts the literature on material planning by not finding a direct positive effect on any inventory performance dimension from analytical design of order quantities and safety stocks. The research adds to the literature by identifying direct and moderating effects of external and internal contextual difficulties on all three-inventory performance dimensions. The relative importance of managing automatic order release identified in the study motivates future research as the effect has not been previously highlighted in the literature. Accordingly, avenues for future research and an agenda for practice-oriented research are suggested.

Against the theoretical backdrop of the embeddedness and the resilience literatures, this paper investigates if and how SMEs' planning for adversity affects firms' performance.

The paper develops hypotheses that investigate the link between the risk management of immigrant-led and native-led SMEs and their performance and draw on novel data from a survey on 900 immigrant- and 2,416 native-led SMEs in 5 European cities to test them.

Immigrant-led SMEs are less likely to implement an adversity plan, especially when they are in an enclave sector. However, adversity planning is important to enhance the growth of immigrant-led businesses, even outside a crisis period, and it reduces the performance gap vis-à-vis native-led businesses. Inversely, the positive association between adversity planning and growth in the sample of native entrepreneurs is mainly driven by entrepreneurs who have experienced a severe crisis in the past.

This paper empirically uses planning for adversity as an anticipation stage of organizational resilience and tests it in the context of immigrant and native-led SMEs. Results support the theoretical reasoning that regularly scanning for threats and seeking information beyond the local community equips immigrant-led SMEs with a broader structural network which translates into new organizational capabilities. Furthermore, results contribute to the process-based view of resilience demonstrating that regularly planning for adversity builds a firm's resilience potential, though the effect is contingent on the nationality of the leaders.

The purpose of this paper is to examine two predominant export decision‐making orientations emanating from normative and descriptive decision theory, namely planning and improvisation and their coexistence within exporting firms. In addition, contingencies under which one may be more appropriate than the other for optimal performance consequences are identified.

A qualitative study was conducted with UK exporters by way of in‐depth interviews. The results were analyzed using within‐ and cross‐case displays of in‐vivo and literature‐based codes, based on Miles and Huberman's recommendations.

The study reveals widespread use of improvisation in export functions, and its co‐existence with export planning for enhanced decision‐making. In addition, resource‐ and capabilities‐based moderators are identified that may affect the ways in which planning and improvisation are related to export performance.

This is a preliminary study which addresses the two export decision‐making orientations together for the first time. Further quantitative research is needed to formally test the conceptual model developed.

Export decision‐makers often feel guilty about improvising, believing that planning is the accepted norm. Avoidance and covert use of improvisation, however, are not necessary. Indeed, export improvisation can have many positive consequences for the export function, especially when combined with export planning.

Research on export decision‐making has tended to focus on normative decision theory (from which planning emerges), largely overlooking descriptive approaches which identify improvisation as a valid decision‐making orientation. However, in today's global and competitive environment, better performance consequences are increasingly to be found in the faster and more creative export decisions that improvisation can afford. This study addresses for the first time how benefits can be drawn from employing a combination of export planning and improvisation.

This paper uses a neural network to analyse the interactive effects of strategic planning on hotel performance. Based on the data collected from 100 hotel units the constructs of planning sophistication and planning thoroughness have direct positive effect on overall performance. Conversely, the degree of planning formality and rigidity )even if it is following a market‐led orientation) can hamper overall performance.

Planning is a perennially popular management tool with an ambiguous relationship to learning and performance. The purpose of this study attempts to resolve this ambiguity. The authors suggest that the critical question is not whether firms need learning for planning to influence performance, but when different firms experience different performance outcomes. The authors propose firms will benefit from strategic planning only when they learn from planning and have the resources to act on their learning.

The authors collected data from a survey of 293 individuals from 191 publicly listed US firms.

Organizational learning mediates the relations between strategic planning and organizational performance. This mediated relationship is positively moderated by high levels of human resource slack and moderate to high levels of financial slack.

The study provides evidence for previous theoretical arguments on the planning–learning relationship while extending this research by finding a complicated moderating effect of slack. The study also adds to the existing debate on optimal slack levels by suggesting that having bundles of slack resources may matter more than having uniformly high or low levels of slack. A cross-sectional study means the authors cannot infer causation.

While strategic planning is a common practice, companies may vary in their planning methodologies, influencing the outcomes of planning. Firms seeking to benefit from planning need to have both the mechanisms to learn from planning and slack to deploy these mechanisms.

These findings clarify the planning–learning–performance relationship while challenging the assumption of an average effect of planning on performance across firms.