The purpose of this research was to investigate the relationship between formal planning system and environmental turbulence and develop their contingency model. The study focused on the design of formal planning system which can fit organizational environment.
In this context, by relating the structural and procedural aspects of formal planning system to the degree of environmental turbulence, sixteen hypotheses were generated.
The dimensions which must be considered in designing formal planning system were discovered and defined through reviewing existing research and logical reasoning. The variables which represent these dimensions include (1) centralization (2) planning process (3) formality (4) completeness (5) linkage (6) planning unit, and (7) time horizon. And environmental turbulence was defined along two dimension-dynamism and complexity. These two dimensions were used to categorize the environment into four typologies of increasing turbulence, which ranged from simple and stable to complex and unstable environment.
Data required in this study were collected by means of questionnaire and interview. The sample size was 40 large companies in eleven industries based on medium classification of KSIC (Korea Standard Industry Classification).
Data analysis was composed of three sections-reliability tests, hypothesis tests and additional analyses. Reliability tests were conducted using Cronbach's alpha(α) coefficient, hypotheses were tested using the Kendall correlation coefficient and the $X^2$ testing, and additional analyses were undertaken by T-test and discriminant analysis.
The result of the hypotheses tests was that ten of sixteen hypotheses were confirmed at 5% level of significance and the rest were not.
The study led to the conclusion that the effective design of formal planning system have much to do with environmental turbulence.
But this research is still in an exploratory stage and has many weaknesses from the view of theory building and research methodology. Therefore in order to reduce these weaknesses eight directions of furture research were suggested in the final section of this study.
