Culture, strategy formulation, and firm performance: a meta-analysis

Purpose This article explores how strategy formulation affects firm performance to determine whether rational/analytical strategy formulation is more effective than emergent/reflexive strategy formulation. Additionally, the article assesses if such superiority holds for different cultural contexts. Design/methodology/approach Meta-analysis was performed using the Raju, Burke, Norman, and Landis (RBNL) procedure applied to a dataset of 43 empirical studies reporting 54 effect sizes on strategy-performance relationships. Findings Implementing a formal strategy formulation process positively relates to firm performance. Rational/analytical formulation approaches are more effective than emergent/reflexive approaches in enhancing firm performance, especially for cultures with low future orientation, high uncertainty avoidance, and high power distance. Originality/value These findings provide a partial explanation for the varying results yielded by strategy formulation and suggest cultural contexts in which rational/analytical strategy formulation should be more effective than emergent/reflexive approaches.