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An integrative model of relationships among managerial, environmental, and organizational factors, strategic planning intensity, and financial performance was developed and tested using data from 112 banks. The results suggested that the intensity with which banks engage in the strategic planning process has a direct, positive effect on banks’ financial performance, and mediates the effects of managerial and organizational factors on banks’ performance. Results also indicated a reciprocal relationship between strategic planning intensity and performance. That is, strategic planning intensity causes better performance and, in turn, better performance causes greater strategic planning intensity. Finally, the results hold implications for other financial services institutions subject to similar conditions that banks must operate under. © 1997 by John Wiley & Sons, Ltd.
Hopkins et al. (Mon,) studied this question.