Organisational Characteristics and Strategic Planning in an Emerging Economy: the Case of Jordan

Abstract

This is the first study to examine the relationship between organisational characteristics and the practice of strategic planning in Jordan. Organisational size, age and sector are all factors which have been found to influence the adoption and practice of strategic planning in developed economies. Three hypotheses are generated concerning the relationship between these variables and the extent of the practice of strategic planning in Jordanian publicly quoted companies. The population of the research is 203 companies registered on the Amman Stock Exchange. These companies contributed more than 75% of Jordan’s GDP. The companies were located in the financial, industrial and service sectors. A questionnaire survey of these companies yielded a 41 per cent response rate. The results of the survey provide a rich source of data in relation to the practice of strategic planning in Jordanian publicly quoted companies. Key findings are that company size is a significant influence on the practice of strategic planning in Jordan, but that age is less influential. There were small differences between the three sectors regarding the practice of strategic planning. The study provides empirical evidence about some important areas of strategic planning practice in Jordan including: the nature of the involvement of top and line management in planning activities; the time horizon for planning; the use of environmental scanning (internal and external); commitment to strategic activities and the use of strategic tools and techniques. The results indicate that there are considerable similarities between strategic planning practice in Jordan and those which have been found in earlier studies in developed economies. This is likely to be because there are few barriers to the dissemination of the knowledge elements of strategic planning practice. The research findings lead to a number of recommendations for Jordanian companies. These include the need to pay greater attention to outside resources and the scanning of internal strategic factors in the strategic planning process and, most importantly of all, the need to pay more attention to the involvement of line managers in the strategic planning process, especially in relation to the choice of a strategic proposal