Strategic Planning, Organizational Learning, Slack, and Firm Performance

Despite extensive research on strategic planning, the effects of planning on performance remain unclear. This paper argues that the critical question is not whether strategic planning influences performance, but when firms experience different outcomes from planning. We propose that firms will benefit from planning only when they have both the ability to learn from their planning as well as the resources to act on their learning. Stated differently, organizational learning should mediate the relations between strategic planning and performance, and firm slack (both absorbed and unabsorbed) should positively moderate these relations such that planning will have a stronger effect on learning, and therefore, on performance, under conditions of high slack. We test our model with a survey of 293 individuals from 191 publicly listed U.S. firms across a variety of industries. Results indicate that, as hypothesized, organizational learning mediates the relations between strategic planning and organizational perfo...