This paper investigates the relationship between the process of strategic decision-making and management and contextual factors. First, drawing on a sample of strategic decisions, it analyzes the process through which they are taken, into seven dimensions: comprehensiveness/rationality, financial reporting, rule formalization, hierarchical decentralization, lateral communication, politicization, problem-solving dissension. Second, these process dimensions are related to (1) decision-specific characteristics, both perceived characteristics and objective typologies of strategic decisions, (2) top management characteristics, and (3) contextual factors referring to external corporate environment and internal firm characteristics. Overall, the results support the view that strategic decision processes are shaped by a multiplicity of factors, in all these categories. But the most striking finding is that decision-specific characteristics appear to have the most important influence on the strategic decision-making process, as decisions with different decision-specific characteristics are handled through different processes. The evident dominance of decision-specific characteristics over management and contextual factors enriches the traditional ‘external control’ vs. ‘strategic choice’ debate in the area of strategic management. An interpretation of results is attempted and policy implications are derived. © 1998 John Wiley & Sons, Ltd.

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Strategic decision-making processes: the role of management and context

The Eclectic Roots of Strategy Implementation Research

Top management consensus on corporate objectives and on the competitive weapons employed to attain them was studied in 12 non-diversified public corporations. It was found that while agreement on both is associated positively with economic performance, agreement on means is significantly more important—in fact, agreement on goals without agreement on means correlates with poor performance. This suggests that strategy makers should concentrate on reaching consensus concerning means rather than ends (corporate goals) when formulating strategies for single-mission enterprises.

Performance and consensus

This paper examines the relationship between organizational performance and consensus (or agreement) within top management teams on company objectives and competitive methods for a sample of nineteen firms competing within a highly fragmented industry—paints and allied products (SIC 2851). It was hypothesized that intense competitive pressures and the resultant low industry profitability would constrain organizational resources and augment the need for consensus on both objectives and methods. However, findings indicate that consensus on either objectives or methods is positively related to organizational performance.

Consensus on strategy formulation and organizational performance: Competitors in a fragmented industry

The authors empirically examine differences between automatic and controlled processing by executives in an increasingly dynamic industry. The results suggest that cognitive inertia affects judgments in both modes, but the effect is stronger with automatic processing. Specifically, the authors conducted two studies examining executives' cognitive maps of competitive positioning. First, they explored differences in ways strategists categorize competitors in a cross-sectional field study conducted during a period of significant environmental upheaval. They found that managers relied on cognitive maps that reflected obsolete industry boundaries rather than configurations representative of the deregulated marketplace. Hence, managers must be mindful to incorporate new information proactively from many sources and to actively discard old, automatic maps in order to develop reliable maps for changing environments. In a second study, managerial competitive schemas of competitive positioning were compared longitudinally across three research projects conducted in the financial intermediary industry. An eight-year time frame provided a unique opportunity to explore the content of mental models in an industry undergoing an accelerating rate of change. The longitudinal results indicate that change creates diversity of thought across managers in the same environment. Managers at competing firms are therefore apt to view competition quite differently in turbulent environments. Implications of the study findings for strategic decision making, consensus and conflict, and organizational learning and executive succession in turbulent environments are discussed. Issues are identified that warrant further research.

Managerial Categorization of Competitors: Using Old Maps to Navigate New Environments

(1977). Planning for Existing Markets: An Empirical Study. International Studies of Management & Organization: Vol. 7, Strategy Formulation, pp. 99-122.

P H Grinyer

Papers

Planning for existing markets: an empirical study