The role of personnel commitment to strategy implementation and organisational learning within the relationship between strategic planning and company performance

Purpose: The study seeks to add to the existing body of knowledge on the link between strategic planning and company performance by exploring the mediating role of personnel commitment to strategy implementation and organisational learning. To study the indirect link between strategic planning and company performance, the paper aims to introduce a participative strategic planning construct that may enable firms to: commit personnel to strategy implementation; increase organisational learning; and improve company performance. Design/methodology/approach: Using data from 160 small and medium-sized Finnish IT companies, the authors conduct an Mplus-analysis. Findings: The findings indicate that participative strategic planning positively affects personnel commitment to strategy implementation, which thereby increases company performance. However, according to the analysis, participative strategic planning does not impact organisational learning, although organisational learning does have a positive impact on company performance. Research limitations/implications: The results of this study are generalisable to a dynamic industry context of small and medium-sized IT-firms operating in a small open economy, such as that of Finland. Practical implications: The results suggest that managers need to involve personnel in strategic planning to increase personnel commitment to strategy implementation. However, because participative strategic planning does not facilitate organisational learning, managers need to determine other ways to facilitate learning at an organisational level. Originality/value: The paper highlights the role of participative strategic planning, which facilitates personnel commitment to strategy implementation and thus improves company performance.