1. Introduction
Contemporary business leaders face remarkable challenges. Success is increasingly a function of a firm's ability to develop and to deploy unique and costly to imitate resources in an innovative way. Scholarly inquiry in strategy focuses on how firms can deliberately and proactively leverage their idiosyncratic combination of resources to create competitive advantages (Barney, 1991; Penrose, 1959). Scholars also question how formal strategic planning and planning flexibility may contribute to a firms' ability to innovate and profit (e.g., Titus, Covin, & Slevin, 2011; Wiltbank, Dew, Read, & Sarasvathy, 2006). Positioned at the nexus of these research streams, the current study examines the relationships among financial performance and formal strategic planning processes (i.e., the process of identifying and implementing the firm's strategic initiatives (Jarzabkowski & Balogun, 2009)), planning flexibility (i.e., the ability of a firm to deviate from its formal strategic plan in response to emerging opportunities or threats (Barringer & Bluedorn, 1999)), and innovativeness i.e., a firm's emphasis on innovation (e.g., Dibrell, Craig, & Hansen, 2011b).
