The practice of an evolved, sophisticated strategy process and the implications for organization performance

There is a long history of studies of the contentious strategic planning - performance relationship. However in the 1980s and 1990s the strategy literature moved on with the writing of Kenichi Ohmae, Henry Mintzberg and other experts to argue the need for more effective strategic thinking to improve organization performance. A new survey scale is developed using data from an Australia wide sample of 237 respondents to capture contemporary views on strategic thinking and strategic planning practice. The paper presents the first exploratory factor analysis and reliability analysis of a new strategy construct which combines strategic thinking elements and strategic planning. The construct is labelled an evolved or sophisticated strategy process. Building on the earlier research of Hart (1992), Mintzberg (1994), Hart and Banbury (1994), Liedtka (1998) and Hill and Stephens (2003) the evolved or sophisticated strategy process construct has six elements or modes including five strategic thinking elements: flexible resource inputs, entrepreneurial, strategic intent, participative and thinking in time. An organization performance scale is developed which balances shareholder and stakeholder outcomes. Regression analysis evidences strategic thinking is more influential than strategic planning in achieving better organization performance. This is an interesting and possibly controversial finding given the robust debate in the literature between Igor Ansoff and Henry Mintzberg. Some evidence of a time lag between the practice of an evolved or sophisticated strategy process (Hart and Banbury 1994), better perceived non-financial organization performance at a point in time, and better actual financial results in later years is also found.