INTERACTION OF STRATEGIC MANAGEMENT PROCESSES AND ACHIEVED CORPORATE PROFITABILITY: EVIDENCE FROM CROATIA

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Valentina Vinšalek Stipić

Abstract

Strategic management can be said to have evolved over time and will continue to evolve. In order for companies to be more successful in their operations, they need a methodological approach to developing a strategic plan. Creating a strategic plan is by no means a simple process and it is necessary to carefully observe the environment in which the company operates, as well as to plan in detail all the factors that play a key role in the strategic planning process. The adoption of a good strategic business plan of the company ends with making quality and effective decisions on which the successful business results of the company will be based. After a quality and well-drafted strategic plan, it is necessary to start a good and quality implementation of it. Failure to implement strategic plans is one of the main reasons why companies fail or stagnate. Strategy implementation is a complex process because it is a consequence of complex relationships. In accordance with the above, an empirical study was conducted on a sample of 52 companies in the Republic of Croatia. The subject and goal of the research was to scientifically determine the importance of adopting and implementing long-term strategic plans. The main results of the research are that the degree of implementation of the strategy is not significantly related to the indicators of net profit margin (ROS 0.164) and return on equity (ROE 0.216), while it is partially related to the indicator of  earnings strength (TSZ 0.304) but is significant for a successful business. The implementation of the research revealed that strategic planning is an extremely important and significant factor for stable growth and development of the company. The implementation of the strategy has an important contribution to the successful operation of the company.

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