Strategic planning could improve your share price

From a financial point of view the long-term ultimate goal of the firm is to maximize its stock price. A high P/E multiple keeps existing stockholders satisfied, reduces the chances that a corporate pirate will attempt to raid the company, and also facilitates the company's own acquisitions.Therefore, financial managers are especially interested in answers to the questions of if and how strategic planning can help to improve the price-earnings multiple. The results of the study summarized in this article answer the first question in the affirmative and give at least a partial answer to the second. Contrary to the conclusion of some other recent studies, this study finds a definite long-term financial payoff from strategic planning. Furthermore, it suggests that strategic planning may be more effective if it is conducted at the corporate rather than solely at the division level.If maximization of stock price is a corporate goal, delegation of strategic planning entirely to the division level may result in a high cost to stockholders.