Dynamic strategic planning and firm competitive performance: A conceptualization and an empirical test

Using the dynamic capabilities and flexible planning framework, we propose a Dynamic strategic planning (DSP) scale. We test for the nomological validity of Dynamic strategic planning using operational capabilities (OC) as a mediator. Using a survey of 267 US-based SMEs, we test for the mediation effect of operational capabilities (disaster immunity, innovation, product quality, delivery reliability, process flexibility, and cost leadership) between Dynamic strategic planning scale (clarity of vision, understanding of core capabilities, selecting strategic targets, shared responsibility, and taking action) and financial performance. Supporting the nomological argument that Dynamic strategic planning will be less efficacious directly and would be more effective when it is manifested through operational capabilities, the findings show that Dynamic strategic planning has a negative but non-significant association with financial performance; however, it positively influences financial performance through operational capabilities. Implications of the results are discussed with theoretical contributions and future research directions.