Assessing the relationship between formal strategic planning and firm's financial performance: An emphasis on flexible planning and innovation

Improving the firm performance, especially its financial aspect, has always been at the core of the attention of both researchers and stakeholders during history. The formal strategic planning process is an element that has shown its impact, whether positive, negative, or neutral on firm financial performance in the literature. Besides, some variables, such as innovation and flexibility in planning, can affect this relationship as moderating factors. Therefore, this study strives to evaluate the association between formal strategic planning and firm financial performance while supposing innovation and flexibility in planning as moderating variables. The statistical population of this paper involves 300 top and middle managers of Refah bank, one of the biggest banks in Iran, and the variables are measured by a questionnaire that is based on the five-point Likert scale. The findings of this research have two main achievements. Firstly, results demonstrate that all three studied variables, meaning that formal strategic planning, innovation, and flexibility in planning have positive impacts on firm financial performance. Secondly, and according to the first conclusion, integrating innovation and flexibility into the formal strategic planning process isa necessity leading to a better firm financial performance.