The Effect of Formal Strategic Planning on Firm Performance and Job Satisfaction

Topics: Management, Strategic management, Strategic planning Pages: 21 (6368 words) Published: October 14, 2008
Introduction

Telekom Malaysia International (Bangladesh) Ltd. (TMIB), established in 1996, is a joint venture company between Telekom Malaysia Berhad (TM) and A. K. Khan & Co. Ltd. It operates under the brand name ‘AKTEL’, which is one of the largest telecommunication service providers in Bangladesh. AKTEL became the first mobile operator to connect Teknaf and Tetulia, the northern and southern most points of Bangladesh respectively. AKTEL was first to provide seamless coverage along the Dhaka-Chittagong highway, and covers all 61 allowable districts of Bangladesh. It has more than six million subscribers nationwide. AKTEL also has the widest international roaming service in the market, connecting 440 operators across 185 countries. Despite all its achievements, TMIB is far from reaching its organizational goal to become the leading telecommunication service provider in Bangladesh. In an organizational setting, strategic planning plays a major role to achieve the desired goal. This research intends to investigate the effects of formal strategic planning on company performance and job satisfaction in context of TMIB in Bangladesh. Numerous studies have focused on the impact of strategic planning on performance in developed country. This present study differs from the previous studies by conducting the investigation in context of an emerging economy, Bangladesh. This study also investigates the effect of formal strategic planning on job satisfaction.

Statement of the problem

This proposal intends to investigate formal strategic planning and its effect on company performance and job satisfaction in context of TMIB. The effect of formal strategic planning on company performance and job satisfaction, mediated by organization structure and environmental turbulence will be investigated in this study. Previous study (Robbins, 2003) conducted in USA reveals the positive effect of strategic planning to job satisfaction. In context of Bangladesh no such studies were carried out on this topic. This inspired the researchers to conduct a research to explore the effect of formal strategic planning on job satisfaction in context of TMIB in Bangladesh. Formal strategic planning also has a direct effect on company performance. Numerous studies (Covin, Slevin, and Schulz, 1994; Dess, 1987; Dess and Robinson, 1984, Golden, 1992; Hart and Banbury, 1994; Powell, 1992; Venkatraman, 1990; Venkatraman and Ramanujam, 1986; Verhage and Waarts, 1988) have demonstrated that formal strategic planning positively effects company performance. The present study will also investigate the effect of formal strategic planning on company performance in context of TMIB in Bangladesh.

Purpose of the study

The purpose of the study is to present and test a model to identify formal strategic planning and its impact on businesses. One of the reasons this study is interested on formal strategic planning because it leads to important consequences such as company performance and job satisfaction. A review of 29 relevant studies by Greenley (1994) revealed that the majority reported data came from the USA. The frameworks and models that are produced are not necessarily applicable to developing or emerging countries (Koufopoulos, Lagoudis, and Pastra, 2005; Haines, 1988). Greenley (1994) also notes that “although the principles of strategic planning should, of course, have universal application, there may be national differences in strategic planning, country dependent influences from business culture, and influences from different national trading conditions.” This study therefore attempts to investigate the relationship between strategic planning, company performance, and job satisfaction in a different environmental context, that of the developing transitional economy of Bangladesh. Most of the previous researches only related performance to strategic planning. Glaister, Dincer, Tatoglu,...

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