Strategic planning practices. An empirical study in the Indonesian banking industry

Abstract

Strategic planning has been used extensively both in the private as well as in the public sector to improve the performance of organisations. This study examines the strategic planning practices carried out in the high-performing banking industry in the Indonesian context. Although the importance of strategic planning, organisational context, and organisational performance has been acknowledged in academic and practitioner literature, only limited studies examine the strategic planning practices and their interrelationship with organisational context, and organisational performance. To the best of the researcher’s knowledge, this is the first study to analyse the issue in the case of Indonesia.

A qualitative research approach was adopted as the framework for this study. This study seeks to explore and document the strategic planning practices (changes) in the high-performing banking industry and the role of organisational context to facilitate strategic planning. The data collection method employed in-depth semi-structured and unstructured interviews of both key informants (managers, heads of planning departments, and planning members) as well as non-planning members in each identified organisation. Documents were analysed to validate and add to the interview data. The research was carried out between May 2011 and February 2012 for the first period of data collection and during September 2012 to the end of October 2012 for the second period of data collection in six high-performing banks in Indonesia.
The six banks were selected because of their engagement in strategic planning and their high performance status. Research reports from a panel of industry experts were used to first define a bank as high performing in the first instance, and then to select the six highest performing banks for the study. The field data were collected and then analysed using the six steps suggested by Creswell (2009). A systematic approach as recommended by Braun and Clarke (2013), Saunders et al. (2009), and Yin (2009), and Opperman et al. (2013) was also utilised for identifying, analysing, and describing patterns and themes across a dataset to enrich steps suggested by Creswell to strengthen and sharpen the data analysis in this case study.

This study has provided valuable findings regarding the strategic planning practices in the Indonesian banking industry: key findings include the fact that all six banks in this study have accomplished all the common strategic planning activities presented in this study, the fundamental role of the CEOs in strategic planning has been proven, and managers’ commitment to and involvement in the strategic planning process (particularly managers in the division of strategic planning and planning members) has been identified, among other relevant findings.
This study then presented a number of research agenda that need to be dealt with such as: First, future research can replicate this study by investigating across industries including private, government, non-profit organisation, and small medium enterprises to observe whether comparable results can be reached. Second, further research that investigating strategic planning practices across countries is needed. Third, formal strategic planning systems in which flexibility was limited had led the banks to high organisational performance. Therefore, further empirical research is needed that seek to compare each planning approach against organisational performance in relatively stable business environments.

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