Rational strategic planning has long been used as an instrument to improve financial performance. With the increasing complexity of the business environment, this positive impact has decreased. As a result, there have been several calls for more work focusing on investigating and understanding the strategic planning process and how it affects financial performance. Many recent studies suggest that a rational approach to strategic planning should be combined with an adaptive approach to build a hybrid approach that is better suited to the current dynamic and complex environment. The purpose of this research is to examine how a strategic planning process that combines rational characteristics and adaptive characteristics improves financial performance. To this end, this study develops and empirically tests a conceptual model, using a quantitative study of 335 European organizations. A combined strategic planning process has a positive impact on financial performance, through the mediators of employee strategic alignment and organizational capabilities.
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