Environmental uncertainty and managerial attitude: Effects on strategic planning, non-strategic decision-making and organisational performance

Abstract

The strategic management literature has been attempting to confirm the validity of strategic planning as a managerial activity for the past 30 years. Results, however, have been confusing and contradictory and have done little to advance the cause of strategic planning as a rational approach to strategy formulation. In order to better understand the nature of the planning-performance relationship, this paper developed and tested a structural model linking perceived environmental uncertainty, and managerial attitude, to strategic planning, non-strategic decision-making and organisational performance. Data was collected from over 140 respondents and results revealed that managerial attitude, rather than perceived uncertainty in both the task and general environments, is the largest determinant of the emphasis placed on strategic planning activities. The validity of strategic planning was confirmed as it was significantly and positively related to performance, while non-strategic decision-making had negative performance implications.