Measuring the effectiveness of strategic planning: proposing a second order operationalization

Purpose The purpose of this paper is to demonstrate a multi-dimensional second-order operationalization of strategic planning, to advance the understanding of this construct. Design/methodology/approach Data on the strategic planning construct were collected using survey questionnaire administered to 123 small and medium-sized manufacturing enterprises (SMEs) in India. Findings The findings clearly reveal that the strategic planning construct can be effectively operationalized as a second-order multi-dimensional construct. Research limitations/implications Data for this study have been collected primarily from SMEs of manufacturing firms. Further investigation in other kinds of firms may help in the enhancement of the construct. Originality/value Scholars have long called for using second-order constructs in strategy research. Operationalizing multi-dimensional constructs as unidimensional leads to inaccurate results and interpretations. By demonstrating a second-order operationalization of strategic planning, the authors illustrate better ways of operationalizing a construct. At the same time, this operationalization should help in better understanding of the implications of strategic planning on firm performance.