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<p>Strategic planning is a proactive action that involves defining an organization’s goals and objectives and finding ways to achieve them within a specific period. For this reason, business owners and managers around the world have identified strategic planning as one of the most amongst managerial approaches. Despite this idea, studies on strategic planning and firm performance have remained divergent, and most of them emphasized the relationship to financial performance. Thus, the objective of the study was to investigate the relationship between departmental strategic planning and both financial and non-financial organizational performance. A cross-sectional design was employed, and data were collected from 301 top-level and middle-level managers drawn from 25 large private manufacturing companies in Tigray, Ethiopia. These companies were included in the study using a census approach<b>,</b> while purposive sampling was applied to select knowledgeable managerial respondents. Data were gathered through a structured questionnaire using a five-point Likert scale. Structural equation modeling (SEM) was employed for data analysis. The measurement model demonstrated acceptable levels of reliability (α &gt; 0.70)<b>,</b> convergent validity (AVE &gt; 0.5, CR &gt; 0.9, SRW &gt; 0.70)<b>,</b> and discriminant validity (AVE &gt; r<sup>2</sup>)<b>.</b> The findings reveal that departmental strategic planning is significantly and positively associated with both financial performance (β = 0.78, p &lt; 0.001) and non-financial performance (β = 0.65, p &lt; 0.001). This study contributes to the literature by integrating both performance dimensions and highlighting insights from a developing country context. It provides practical guidance for departmental managers aiming to enhance organizational outcomes through strategic planning. Therefore, the study recommends that managers emphasize goal setting, strategic option development, and environmental analysis to improve outcomes, while policymakers should foster supportive environments through training and standardized planning practices in the manufacturing sector.</p>

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Strategic planning and organizational performance: evidence from tigray

  • 期刊论文

  • 发表日期：

    2025年11月19日

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  • Desalegn Berhane Asgedom

摘要

Strategic planning is a proactive action that involves defining an organization’s goals and objectives and finding ways to achieve them within a specific period. For this reason, business owners and managers around the world have identified strategic planning as one of the most amongst managerial approaches. Despite this idea, studies on strategic planning and firm performance have remained divergent, and most of them emphasized the relationship to financial performance. Thus, the objective of the study was to investigate the relationship between departmental strategic planning and both financial and non-financial organizational performance. A cross-sectional design was employed, and data were collected from 301 top-level and middle-level managers drawn from 25 large private manufacturing companies in Tigray, Ethiopia. These companies were included in the study using a census approach, while purposive sampling was applied to select knowledgeable managerial respondents. Data were gathered through a structured questionnaire using a five-point Likert scale. Structural equation modeling (SEM) was employed for data analysis. The measurement model demonstrated acceptable levels of reliability (α > 0.70), convergent validity (AVE > 0.5, CR > 0.9, SRW > 0.70), and discriminant validity (AVE > r2). The findings reveal that departmental strategic planning is significantly and positively associated with both financial performance (β = 0.78, p < 0.001) and non-financial performance (β = 0.65, p < 0.001). This study contributes to the literature by integrating both performance dimensions and highlighting insights from a developing country context. It provides practical guidance for departmental managers aiming to enhance organizational outcomes through strategic planning. Therefore, the study recommends that managers emphasize goal setting, strategic option development, and environmental analysis to improve outcomes, while policymakers should foster supportive environments through training and standardized planning practices in the manufacturing sector.