The Relationship between Strategic Planning and Company Performance – A Chinese perspective

Abstract

What is the relationship between Strategic Planning and Company Performances in Chinese companies? Is there a correlation between Company Performance and the Strategies adopted by these companies, using the Miles and Snow model for Aggressiveness Strategies? And is it possible to say something more about what kind of Strategic Planning gives better Company Performances? We wanted to separate here between the Planning which is related to what is called Competitive Intelligence and other activities related to Planning. The Idea was to be able to say something about the importance of Competitive Intelligence. We also wanted to use more extensive statistical analysis with more variables in light of the criticisms that has been raised about the methodology of previous studies. We found that better planning had a positive effect on a number of key business performance measures. We found that there was indeed a distinction between the different strategies selected and Company Performance. The strategy type named Reactors performed systematically less well than companies who choose one of the other strategies. Moreover we found that there were differences between different planning activities and Company Performance and that activities related to Competitive Intelligence were on the average more important for Company Performance than other Planning activities.