Planning and performance in State-Owned Enterprises: A multidimensional assessment

The present paper investigates the relationship between planning and performance in the context of State-Owned Enterprises (SOEs). It considers dimensions of planning relating to: decentralisation, formalisation, depth of analysis, monitoring/reviewing, and coverage of plan content. Each dimension is operationalised through multiple measures and composite variables, as derived from statistical analysis. Planning variables are then related to performance, which is approached by ‘output’ and ‘process’ effectiveness. Output effectiveness is measured through profitability, growth and innovativeness indicators. Process effectiveness refers to the role of planning in organising and focusing management effort; measures are constructed which refer to planning's contribution to awareness of factors external to the enterprise, cross-functional integration, mobilisation of human potential and exercise of management control. The analysis controls for tightness of the regulatory framework, market competition, and enterprise size. Empirical testing is based on data from the operational planning processes of 55 Greek SOEs. Statistical analysis reveals various significant associations between specific aspects of planning and measures of output and process effectiveness. More significant appears to be the impact of planning on innovative aspects of performance, as well as on the internal management process. The results offer new insights into the impact of planning, and justify the multidimensional treatment of both planning and performance. Directions for future research are pointed out, and conjectures for practitioners are derived.