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Submitted to: Dr Abdul Waheed

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MOHSIN IFTIKHAR : L1S18MBAM0079

Date:April /03 / 2020

 AN INTEGRATIVE FRAMEWORK FOR STRATEGY-MAKING
PROCESSES

STUART L. HART
University of Michigan

Most prior literature on strategy making has focused on a limited set of themes (e.g.,
rationality) or actors (e.g., top managers). Resulting typologies have, therefore,
tended to be incomplete or overlapping. None have captured the full range of
content aBSociated with the phe• nomenon. In response, this article offers an
integrative framework consisting of five modes: command, symbolic, rational.
transactive, and generative. The framework is based on the varying roles top
managers and organizational members play in the strategy-making process. It goes
beyond existing strategy proceBS models by contrast• ing these roles and
illustrating their interaction. Strategy making is viewed as an organizationwide
phenomenon. Research propositions are also developed linking strategy-making
proceBBes to firm perfor• mance

Over the years, scholars have dealt with strategy making from a number• ber of different viewpoi
nts (e.g., 
Ansoff, 1965; Barnard, 1938; Hofer & Schendel, 1978; Lindblom, 1959; March & Simon, 1958; 
Mintzberg, 1973; Quinn, 1978). 
Such disparate approaches spawned a confounding ar• 
ray of conflicting or overlapping conceptual models. 
Nonetheless, writers have built dozens of different 
approaches over the past three decades •Making typologies (e.g., Bourgeois & Brodwin, 1984;
Chaffee, 1985; Mintz• berg, 1978; Nonaka, 1988), leading to 'pattern proliferation.' Related
empirical research (e.g., Fredrickson & Mitchell, 1984; Miller & Friesen, 1977, 1983;
Shrivastava & Grant, 1985; Wooldridge & Floyd, 1990) has covered such a wide variety of
issues that little accumulated knowledge has resulted. There is a lack of conceptualisation that
can provide a basis for ongoing study. This article offers an integrative structure for pro•
cessation strategy making, composed of five modes: order, symbolic, moral, transactive, and
generative. The system is focused on top man• agers and organizational leaders playing opposing
positions in the strategy-making process. It explains the functions and describes how they
communicate. .. Valuable comments and feedback on earlier versions of this article were
received by the modes Kate Banbury, Dan Denison, Jane Dutton, Avi Fiegenbaum, Susan
Schneider and Paul Shrivastava. The University of Michigan School of Business Administration
offered funding for the investigation. Represent "normal" forms of processes that can be
combined into different tions. The five modes together help to combine and resolve a variety of
previous styles and typologies.
Research suggestions propose relationships within the plan • rendering firm output modes and
measurements, including the moder • attaining results of many primary contingency variables.
Since companies typically de• velop competency in multiple modes, proposals often identify the
most successful combinations of the five methods of strategy making.

PRIOR LITERATURE
Historical Evolution of the Field
Strategy has an historical past which is long and venerable. The basis of this literature is the
well-known rational model, which involves pre-decision hensive and exhaustive study of
compre• (Fredrickson & Mitchell 1984). Rationality means that a decision-maker (a) considers
all the alternatives available, (b) defines and assesses all the implications that would result from
the adoption of each alternative, and (c) selects the al• ternative that would be optimal for the
most valued ends (Mey• erson & Banfield, 1955). The logical decision-making model applied to
the strategy indicates systematic environmental review, evaluation of internal strengths and
limitations, clear target setting, evaluation of alternative course of action, and the development of
a detailed plan for achieving the targets (e.g., Andrews, 1971; Ansoff, 1965; Hofer & Schendel,
1978; Porter, 1980). This calls for the use of a structured strategic planning system
organizationally (Lorange & Vancil, 1977; Wood & Laforge, 1979). An increasingly convincing
body of behavioral research has questioned the premises of rationality (Cyert & March, 1963);
according to this research, only minimal rationality can at best be accomplished by individuals
and organisations (Simon, 1957). Cognitive limitations trigger decision-makers to follow
simplistic world models at the person level, restrict quest actions to maximize • mentally
different choices, and embrace the first suitable outcome (Lind• blom, 1959; March & Simon,
1958; Simon, 1952); In order to organize problems and events into manageable sets of
categories, individuals depend on schema or cognitive maps (Dutton & Jackson 1987; Schwenk
1988). Additionally, in human reasoning, heuristics and prejudices lead in several deviations
from optimality (Schwenk, 1984; Tversky & Kahneman, 1974).
Strategic hypotheses form the basis for organizational frames of reference at the organizational
level (Mason & Mitroff, 1981; Schneider & Shrivastava, 1987; Shrivastava & Schneider, 1984),
which predispose firms to take particular action. Finally, the difficulty of setting organizational
goals can lead to politically motivated actions among actors resulting in a disjointed, gradual
process of organization often characterized as muddling through (Braybrooke & Lindblom,
1963; Cyert & March, 1963; MacMillan & Jones, 1986; Simon, 1964). Independent assumptions
of organizational purpose can lead to a waste model of strategic choice, and strategy. This arises
from organized chaos (Cohen, March, & Olsen, 1972). Therefore, the behavioral literature
indicates a more selective and less inclusive role in the strategy-making process for top
managers. This questions the cognitive and motivational premises implicit in the logical model,
and proposes that members of the company play a major role in the process (Mintzberg, 1978).
Recognizing these limitations, Quinn (1978) suggested logical incremen• talism as the ideal
standard for strategic growth. Executives in this model will be able to predict the broad path of
the ultimate strategy which will result, but not the precise nature. Top managers therefore
concentrate on identif• tifying an organization's loosely specified course, allowing the
information to emerge over time. Along this line of thought, a increasing number of writers have
argued that top management vision and strong corporate values are important in the strategy
process. (Conger & Kanungo, 1988; Pascale, 1985; Kotter, 1988; Peters, 1987; Weick, 1987).
Therefore, instead of trying to be comprehensive-the ideal of rationality-top managers strive to
build a general sense of mission and direction that will guide the activities of members of the
company (Bennis & Nanus, 1985; Johnson, 1988). The vision helps to generate both chaos and
order: it generates chaos by continuously pushing organizational participants to move beyond the
status quo while also providing order by offering a long-term path as a lighthouse to guide
individual, short-term action (Nonaka, 1988).
As part of the dream, the top managers must catch the organizational mem• bers 'imagination
(Burns, 1978; Stata, 1988). Effective visionary leadership is a two-way street which implies
shared duty (Westley & Mintzberg, 1989). There can be no strategic vision without the
engagement and participation of organisation's leaders. Engagement by participation has
therefore emerged as another significant element in the past de• cade's strategy-making literature.
In realistic models strategy making is generally conceived as the prov• ince only of top managers
(e.g., Andrews, 1971; Ansoff, 1965; Porter, 1980). Scholars have also noted, however, the
increasing trend towards more organizational participation in strategic issues (Guth & Mac•
Millan, 1986; Hickson, Butler, Cray, Mallory, & Wilson, 1986; Imai, 1986; Mintzberg, 1990;
Rhyne, 1986; Wooldridge & Floyd, 1990). Difficulties with the implementation of the strategy
(Galbraith & Kazanjian, 1986) and a increasing rate of environmental change (Ansoff, 1979) are
often cited as the reasons for such involvement. Others also recognized the growing importance
of intrapre• neurship to creativity and corporate performance (Burgelman, 1984; Kuratko,
Montagnor, & Hornsby, 1990; Quinn, 1985).
Through defining mediated and autonomous strategic actions on the part of organizational
leaders Burgelman (1983) captured this concept well. In• duced conduct implies rationality-the
intentional use of structure and structured control mechanisms (by top management • ment) to
inspire workers to be • in desirable ways, presumably to enforce a formulated plan. Nevertheless,
autonomous conduct calls for the support (or at least ac-ceptance) of individual organizational
initiative, in the context of increasing efficiency and creativity (Imai, 1986). Organi• Zational
participants in this case exercise flexibility by proposing improvements; Creating new market
markets, and participating in campaigns to promote goods. Middle managers are seeking to
convince top management to embrace these measures, which are always a departure from the
current approach (Bower, 1970).
There are three recurrent themes. First is rationality-the degree to which the approach to the
strategic process may (or should) be systematic, thorough and logical. The literature indicates
that behavioral problems (e.g., bounded rationality, rewarding, political behavior) can limit the
degree of rationality that can be achieved. The second theme in the literature is rationality: the
symbolic role of the top managers in the strategy process. This literature focuses on to what
degree leaders can express a specific stra• tegic vision and inspire members of the company to
embrace it. Implementation concerns however indicate the degree and form of involvement of
organizational leaders as a crucial (and the third) theme in the strategy-making process. These
three principles organize the current pro• cessation typologies of strategy making.

Strategy-Making Process Typologies

Table 1 summarizes 11 main typologies of processes taken from the lit• erature. We are grouped
into the three broad themes: rationality (com• detailed and limited), vision, and engagement
Rationality. Several authors established typologies of strategic process making based on
rationality. Allison (1971) presented three contrasting models to describe the Cuban missile
crisis in his classical decision-making analysis: rational agent, organizational mechanism and
bureaucratic pol• itics. The first model reflected the detailed, classical approach. The two latter
models suggested variations on the theme of behavioral or limiting rationality. Due to the
gradual complexity of organizational processes as well as the competing desires and goals of
individual actors, Allison clarified how results can vary from the logical optimum. Six decision-
making techniques ranging from strongly logical (normative decision theory) to extensively
behavioral (behavioral decision theory, group decision-making) were expanded on this paradigm
by Nutt (1981, 1984). Mintzberg (1973, 1978) identified the strategizing modes of
entrepreneurship, preparation, and adaptation. A successful leader takes brave, risky acts on
behalf of the organization, in the entrepreneurial style. Formal modeling used to formulate
specific, coherent plans for the future characterizes the planning style. In the adaptive mode the
organization responds in tiny, disjointed steps to a difficult environment. Organiza• Tional
leaders play a much greater role in the adaptive mode and top management dominates the modes
of organization and planning. Therefore the first two modes display high levels of
comprehensiveness. The third mode features incrementalism. So Mintzberg received.
 TABLE l
Categorizing the Strategy-Making Process Typologies

Themes from the Literature

Rationality

C i ta tio n C o m p re h e n siv e Bounded V is io n In v o lv e m e n t

Allison ( l 9 7 l ) R a t io n a l O r g a n iz a tio n a l;
B u r e a u c r a tic
Nutt (l 9 8 1 , l 9 8 4 ) N o rm a tiv e ; B e h a v io r a l;
B u r e a u c r a tic G ro u p ;
A d a p tiv e
M i n t z b e r g ( 19 7 3 , E n tr e p r e n e u r ia l; A d a p tiv e
19 7 8 ) P la n n in g
C h a f f e e (1 9 8 5 ) L in e a r A d a p tiv e In t e r p r e t iv e
M in tz b e r g P la n ; P lo y ; P a tte r n P e r s p e c tiv e
(l 9 8 7 a ) P o s it io n
B o u r g e o is & C o m m a n d e r; C o lla b o r a tiv e C u ltu r a l C r e s c iv e
B ro d w in C hange
(1 9 8 4 )
N o n a k a (1 9 8 8 ) D e d u c tiv e In d u c tiv e ;
C o m p r e s s iv e
A n s o f f ( 19 8 7 ) S y s te m a tic Ad H o c ; O r g a n ic
R e a c tiv e
G r a n d o r i ( 19 8 4 ) O p tim iz in g S a tis h c in g ; C y b e rn e tic Random
In c r e m e n ta l
S h r iv a s ta v a & M a n a g e r ia l A d a p tiv e P o litic a l
G r a n t (1 9 8 5 ) a u to c r a c y ; p la n n in g e x p e d ie n c y

b u re a u cra cy
M in tz b e rg & E n tr e p r e n e u r ia l; P ro ce ss; Id e o lo g ic a l; U n c o n n e c te d ;
W a t e r s (1 9 8 5 ) P la n n e d C onsen sus U m b r e lla Im p o s e d

Two opposing modes of systematic rationality-one dominated by a powerful (entrepreneurial)

leader and one dominated by formal (planning) analysis and procedure.
For the remaining eight typologies too these separate aspects of rationality are apparent. The
modes of the dictator (Bourgeois & Brodwin, 1984) and the managerial autocracy (Shrivastava
& Grant, 1985) both represent a cycle of strategy governed by a strong leader or chief executive
(similar to Mintzberg's business mode). By comparison, the linear (Chaffee, 1985), deductive
(Nonaka, 1988), systematic (Ansoff, 1987), optimizing (Grandori, 1984), and expected
(Mintzberg & Waters, 1985) modes represent a thorough and exhaustive analysis-oriented
method (similar to the logical mode of Al• lison, 1971, or the normative mode of Nutt, 1984).
The remaining modes mimic the school of action with its limiting rationality. For exam-ple,
Choffees (1985) adaptive, Mintzberg's (1987a) method, Ansoff's (1987) ad hoc, Grcmdori's
(1984) satisfying, Shrivastava and Grant's (1985) adaptive preparation, and Mintzberg and
Waters '(1985) cycle all reflect stratum • egy making that is constrained by cognitive and
political realities (similar to Allison's organizational mode, 1971, and Nutt's behavioral mode, 1)
Vision. Like Allison, Chaffee (1985) also outlined three strategy-making models: linear, adaptive and interpretive.
The first 2 models are grounded in the field of rationality. However, the third model taps into the subject of vision.
Strategy making based on the interpretive model is con• cerned with metaphors and frames of reference that allow
organizational stakeholders to understand the organization and its environment. This motivates members to believe
and behave in ways that are likely to yield successful outcomes for the organisation.

Through his five Ps of strategy, Mintzberg (1987a) expanded his thought on this theme: play,
tactic, place, trend and perspective. While the first four of these modes reflect various levels of
rationality, the perspective mode explicitly represents the preceding section's symbolic approach
to strategy. Similarly, the concept of the Mintzberg and Waters (1985) defines the theoretical and
umbrella approaches to strategy formation. Regard• The political style, tactics come from
common values and inten• tions exist as a collective vision for all actors. As far as umbrella
mode is concerned, leadership establishes boundaries or goals to which actors can react or
establish them. Similarly, the cybernetic style of Grandori (1984) includes organizational
learning within some specific set of goals or objectives.
This theme was also taped by Bourgeois and Brodwin (1984) in their framework which
emphasized the role of top management. The first three examples, again, refer to the dimension
of rationality. Nevertheless, the cultural model represents the theme of vision and interpretive
dimensions of strategy, with its focus on common principles as moderators of work behaviour.
But their fifth model (the form of cres• cive) taps another domain. In this style policy arises from
the bottom up, with no input from top management (analytical or symbolic). In this scenario,
leaders of the company play the criter• ic position in strategy creation.
Involvement. Many writers have integrated the concept of involving • ment into their typologies
of strategy making. For example, strategic activity is largely unmanaged in Ansoff's (1987)
organic, and in Mintzberg and Waters '(1985) unconnected modes, and strategy is the product of
serendipity. These modes present high rates of autonomous action by organizational ac• tors and
show distinct similarities to the crescive model of Capitalist and Brodwin (1984).
Shrivastava and Grant (1985) analyzed pro• cessations of strategic decision-making in 32
business organizations. They empirically developed four prototypical trends of strategy
development, using a mixture of quantitative and qualitative analysis. The first two were
identified as the managerial au toe• racy model and the systemic (comprehensive) model of
bureaucracy, while the third was called the model of adaptive planning (bounded rationality).
The fourth, known as the model of political expediency, was sim• ilar to the crescive model of
Bourgeois and Brodwin (1984), since in this case the policy was the product of negotiations
between decentralized coalitions And groups of concern within the organization.
Nonaka (1988) presented strategy making as an information-building activity and posed three
modes: deductive, inductive and compressive. Deductive management is driven from top to
bottom and requires high levels of central planning and interpretation (high rationality, low
participation). Induc• Tive management, on the other hand, is bottom-up (like Bourgeois &
Brodwin's, 1984, crescive model) and is directed within the organisation by individual or
community initiative: Hence, top management's job is primarily to support ventures and make
sense of the decentralized operation. Compressive management incorporates both deductive and
inductive types, and requires high levels of interaction for top executives and leaders of the
company. Therefore, both top-down and bottom-up plan making is.

AN INTEGRATIVE FRAMEWORK

As shown in the literature review, there has been substantial conceptual development in the
strategy-making process. There are growing sources of literature. These streams tap several
themes which created typologies of com• peting or overlapping. None of the individual
typologies, how• ever, covers the range of themes and dimensions associated with the cycle of
strategy creation. Alternatively, each one only emphasizes a portion of the material. Considering
the fragmented and overlapping existence of the literature, the theoretical synthesis will greatly
support the field of management.
The proposed integrative system builds on the existing gies typolo•. The system is based around
the complementary positions that top executives and organizational leaders play in strategic
creation. This interpretation of position has been typically implied in prior literature. Where roles
are established, the emphasis is either on top managers or tional members of the company, not on
how the roles interrelate. It should be noted from the previous discus• sion that the position
played by top managers should vary from that of a leader, where policy is actively conceived at
the top and distributed to the rest of the organization.
(Bourgeois & Brodwin, 1984), where policy arises from below and is merely acknowledged and
sponsored by the top (Mintzberg, 1978), to what could be considered a sponsor. Similarly, the
position performed by members of the company can range from that of a good soldier in which
members implement the strategies devised by top managers (Guth & MacMillan, 1986) to that of
an entrepreneur in which members are required to behave autonomously in search of new
initiatives (Burgelman, 1983).
The literature reveals people in strat• egy making taking on a number of postures. Specifying
both who is involved in creating a plan and how a useful organizing concept for the devel•
system alternative is given. The juxtaposition of these positions clarifies their relationship and
promotes the discovery of distinctive strategic ways To this end, Table 2 sets out five modes of
strategy making: order, symbolic, moral, transactive, and generative. A command mode of
strategy making is defined in the second column, in which top managers for• multiply the
strategy and organizational members execute it. In such a scenario, develop strategy for a strong
leader or a few top executives and force it down inside the company. Top executives are in
charge. The third column defines a symbolic style of strategy making, whereby the leaders are
predominantly involved in articulating a goal and developing a vision and shared viewpoint that
helps direct organizational members 'actions towards a common purpose.
A rational mode of strategy making is represented in the fourth column, where structured
planning processes and hierarchical relationships predominate. Strategy making in this case is
seen as implementing the plans generated by thorough analysis and systematic procedure.
Through a systematic planning method, top managers evaluate strategic direction that includes
comprehensive data collection and highly organized organizational participant in the volvement.
In transactive mode, leaders of the company shift to a higher degree of participation in the
strategic phase yet.
In such a situation, the primary function of top managers is to promote an integrated strategy
formulation process; the substance of the plan emerges from interactions between organizational
leaders, vendors, clients and key stakeholders. FiNally, with the generative mode of strategy
making, central guidance fully gives way to internal entrepreneurship and top management
changes the strategy to suit the trend of innovations emerging from below.
In fact, top managers concentrate on specific goals for each of the five modes-they pull specific
organizational "levers." In the symbolic mode, for example, top managers focus specifically on
the mission and vision of the company. By comparison, in the logical mode, top managers
concentrate funda• mentally on the company's goals and strategic strategy, and the structured
structure and processes required to execute them.

TABLE 2
An I n t e g r a t i v e F r a m e w o r k for S t r a t e g y - M a k i n g P r o ce s s e s

D e s c r ip t o r s C om m and S y m b o lic R a tio n a l T r a n s a c tiv e G e n e r a ti v e

Style (I m p e r i a l ) (C u l t u r a l ) (A n a l y t i c a l ) (P r o c e d u r a l ) (O r g a n i c )
S tr a te g y d r iv e n S tr a te g y d r iv e n S tra te g y d riv e n S tr a te g y d r iv e n S tr a te g y d r iv e n
by l e a d e r o r by m i s s i o n by f o r m a l by i n t e r n a l by o r g a n i z a -
s m a ll to p a n d a v is io n s tru c tu re a n d p ro c e ss a n d tio n a l a c t o r s
te a m of t h e f u t u r e p la n n in g m u tu a l in i t i a t i v e
s y s te m s a d ju s t m e n t

Role of T o p (C o m m a n d e r ) (C o a c h ) (B o s s ) (f a c i l i t a t o r ) (S p o n s o r )
M anagem ent P r o v id e M o tiv a te a n d E v a lu a te a n d Em pow er and E n d o rse a n d
d ir e c tio n in s p i r e c o n tr o l e n a b le su p p o rt
R o l e of O r g a n i - (S o l d i e r ) (P l a y e r ) (S u b o r d i n a t e ) (P a r t ic i p a n t ) (E n t r e p r e n e u r )
z a tio n a l O b ey o rd e rs R e s p o n d to Follow t h e L e a rn a n d E x p e rim e n t a n d
M e m b e rs c h a lle n g e s y s te m im p r o v e t a k e ri s k s

Top management focus is focused on developing and promoting efficient organizational

structures and processes with the trans-active mode. Therefore, the organizational levers open to
top management can be described as ranging from the articulation of corporate mission and
vision, on the one hand, to consideration for informal processes and people on the other, with a
number of levers falling in between. Table 3 summarizes the relationship between the five types
of strategy-making and the related instruments that top managers uses.
The framework's five modes incorporate the overwhelming array of literature on the strategy-
making process. Table 4 makes use of the structure for mapping main typologies described in the
previous section. Command and rational modes clearly reflect the two distinct aspects of
comprehensive rationality, while transactive mode incorporates most of the material from the
category of bounded rationality. The symbolic mode is a direct representation of the dream
theme. Finally, material from the topic of involvement is mainly captured in generative mode.
The five modes are not viewed as being mutually exclusive. In action, orga• nizations may
combine two or more modes into distinctive combinations of the processes of strategy making.
These process modes and configurations can have important implications for firm efficiency.
Command
A powerful individual leader or a few top managers exercise absolute control over the business
in respect of this style. Strategy creation is a trolled, aware process concentrated at the very top
of the company (Mintz• berg, 1973). It analyzes the strategic situation, considers alternatives and
determines the correct course of strategic action (Vesper, 1980). Strategies in such a style are
deliberate, completely formed and ready to go

TABLE 3
S t r a t e g y - M a k i n g Mode and the O r g a n i z a t i o n a l " L e v e r s " o f
Top M a n a g e m e n t

L ev ers C o m m and S y m b o lic R a tio n a l T r a n s a c ti v e G e n e r a tiv e

M is s io n
V is io n
G o a ls
S tr a te g y
S tru c tu r e **
S y s te m s
P ro ce sse s **
P e o p le
• P r im a r y fo c u s
•• S e c o n d a r y fo c u s
 TABLE 4
M a p p i n g the T y p o l o g i e s on the I n t e g r a t i v e F r a m e w o r k

Citation C om m and S y m b o lic Rational T r a n s a c ti v e G e n e r a ti v e

Allison ( 1 9 7 1 ) R a tio n a l O rg a n iz a tio n a l; B u r e a u c r a tic

Nutt ( 1 9 8 1 , N o rm a tiv e B u r e a u c r a tic B e h a v io r a l;

19 8 4 ) G r o u p ; A d a p ti v e
M in tz b e rg E n tre p r e n e u r ia l P la n n in g A d a p tiv e
(1 9 7 3 , 19 7 8 )

C h a ffe e (1 9 8 5 ) In te r p r e tiv e L in e a r A d a p tiv e

M in tz b e r g P e r s p e c tiv e P la n ; P o s itio n ; P a tte r n

(1 9 8 7 a ) P lo y

B o u rg e o is & C om m a nder C u ltu r a l C hange; C r e s c iv e

B r o d w in C o lla b o r a tiv e
(1 9 8 4 )

N o n a k a (1 9 8 8 ) C o m p re s s iv e D e d u c tiv e In d u c tiv e

Ansoff ( 1 9 8 7 ) S y s te m a tic Ad hoc re a c t i v e O r g a n ic

G ra n d o ri C y b e r n e tic O p tim iz in g S a tis fic in g ; Random

(1 9 8 4 ) In c r e m e n ta l

S h r iv a s ta v a & M a n a g e r ia l S y s te m a tic A d a p tiv e P o litic a l

G r a n t (1 9 8 5 ) a u to c ra c y b u re a u c ra c y p la n n in g e x p e d ie n c y

M in tz b e rg & E n t r e p r e n e u r ia l Id e o l o g i c a l; P la n n e d Proce ss; U n c o n n e c te d ;

W a te rs U m b r e lla C o n se n su s Im p o s e d
(1 9 8 5 )

Implementation. In this style of strat• egy formation, the top boss is the leader, and
organizational participants are good soldiers who conduct the plan as the top articulates it
(Bourgeois & Brodwin, 1984; Mintz• berg & Waters, 1982). Business history annals are packed
with stories of powerful entrepre• neurs and business leaders credited with chairing either
business development or growth (Collins & Moore, 1970); for example, in scholarly and popular
literature, Henry Ford (Ford Motor Company) and Tom Watson (IBM) have become folk heroes.
More recently, with their impressive success stories, people like Bill Gates (Microsoft) and Steve
Jobs (Apple) have gained tremendous attention. A single person (or rather limited inner circle)
had a detailed business strategy in each case, so it was effective to cease enforcing it on the
organisation.

Symbolic Mode:
The symbolic mode includes establishing a compelling vision and a strong corporate mission by
top management. The corporate vision gives meaning to the operations of the organization and
gives the employees a sense of identity; it describes the company's basic philosophy and values
(Bennis & Nanus, 1985; Block, 1988; Dutton & Dukerich, 1991). This method relies on the use of
words, metaphors, and feelings (Conger & Kanungo, 1988; Edelman, 1971; Willner, 1984). For
example, NEC's vision is "C&C," the union between computers and communication, a powerful
metaphor capturing the value of technical synergy within the organization.
Strategy making in the symbolic mode also involves the development of a long-term
organizational mission — an articulation of strategic purpose (Hamel & Prahalad, 1989); This
mission is translated into concrete objectives, either internal to the organization (e.g., capability
development) or external (e.g., competitor overtaking), which encourages organizational
leaders to reach higher levels (Hasegawa, 1986; Imai, 1986). For example, at Komatsu the goal
is "Maru-C- to encircle its primary rivals, Caterpillar.
As with a coach in athletics, the task of top management in symbolic mode is to
motivate and empower members of the organization (Nonaka, 1988). Top management
provides the requisite emphasis and energy to direct organizational players 'innovative acts
through interviews, persuasion, slogans, new ventures, and acknowledgement (Itami, 1987).
The symbolic mode thus establishes an implicit control structure, based on mutual values
(Pascale 1985; Weick 1987). It depends on maintaining a common viewpoint for all
organizational leaders, that is, a strong mision, shared beliefs, and a corporate vision or dream
that is emotionally appealing (Torbert, 1987). Founder Konosuke Mat- sushita, for example,
created a grand 250-year dream at Matsushita. The dream was operationalized by the
"Matsushita's Seven Spirits"-the company's common principles. Every year, Matsushita
rededicates the mission of the organization to its vision by weaving its short-term goals into the
dream of a future, captured through a slogan that serves as the theme for the year.

Rational Mode:
The logical mode tends to be detailed in nature as opposed to the order or symbolic modes. There
is a high degree of detailed analysis in the logical mode — the compilation and use of internal
and external data (Miller, 1989). In such a scenario, means are isolated from ends, and policy
meets structure (Chandler, 1962). Formal analysis, such as environmental screening, portfolio
analysis, and industrial and strategic analysis, is also used to assist in formulating business
strategies (Porter, 1980; Steiner, 1979). This process is typically institutionalized through
structured strategic planning which involves written strategic and operational plans (Armstrong,
1982; Rhyne, 1986; Wood & LaForge, 1979). Organizational leaders engage in a structured
structure which needs data and information to be exchanged upwards. The outcome is a
comprehensive action plan, including product-market details, strategic strategy, and distinctive
competency (e.g., Hofer & Schendel, 1978). The highly sophisticated approach to strategic
planning by General Electric, which was developed during the 1960s and 1970s, is an example
of this style of strategy making in practice. For the comprehensive- ness of their systematic
planning frameworks, Texas Instruments and IBM have also earned broad attention.
Top management carefully monitors the actions of subordinates who are kept responsible
for benchmarked results against the program to ensure successful execution. Organizational
members are motivated by structure and formal structures to behave in desirable ways. In brief,
the rational mode is embedded in the desire of top management to incorporate as much data as
possible while formulating a specific business strategy.

Transactive Mode:
The nature of the transactive mode is strategy-making focused on interaction and understanding
rather than predetermined plan execution (Fiol & Lyles 1985). All cognitive limits (March &
Simon, 1958; Slovic, Fischhoff, and Lichtenstein, 1977) and environmental instability (Dutton,
Fahey, & Narayanan, 1983; Lyles & Mitroff, 1980) tend to restrict the ability of top managers to
distinguish policy design from execution. Strategy is built based on a continuous dialog with key
stakeholders, staff, vendors, consumers, governments, and regulators. Central to this mode is
cross-functional communication among members of the organization. Feedback and learning
include an iterative strategy building process (Argyris & Schon, 1978). In this situation, top
management is concerned with promoting a transaction process with key stakeholders and
connecting the results of those processes over time to assess strategic direction (Mintzberg,
1987b).
In recent attempts by many companies to encourage employee engagement, customer
attention, and complete quality control, the transactive style is expressed (Ishikawa & Lu, 1985;
Lawler, 1986; Shapiro, 1988). This style typically includes lateral contact networks and new
frameworks to include customers and other main stakeholders in the planning and decision
making process. Popular transactive mode initiatives include just-in-time management, system
management, quality loops, and implementation of quality functions. Organizations like Ibm,
Xerox, and Ford have devoted considerable resources to promoting these transactive systems in
the United States. The Deming Prize in Japan and the newly established Malcolm Baldridge
National Quality Award in the U.S. are awarded on the basis of the ability of a business to
demonstrate high organizational learning potential fostered by transactive partnerships between
vendors, consumers and staff.

Generative Mode:
The generative mode of strategy-making depends on the organizational members 'autonomous
actions. Strategy evolves upward by entrepreneurship-new product concepts, and employee
initiative forms the strategic course of the company (e.g., Kanter, 1983; Peters & Waterman,
1982). In this scenario, high-potential ideas that originate from below are mainly chosen and
nurtured by top managers (Mintzberg & McHugh, 1985). Developed businesses make inventions
by behaving more like small business enterprises (Maidique & Hayes, 1984; Quinn, 1985). New
ideas are germinated in the generative mode by separating creative operation from the operating
organisation's day-to-day work (Tushman & Nadler, 1986)
 Universities, hospitals, and professional organizations are well known for their
generative properties (Cohen, March, & Olsen, 1972). However, the generative mode can also be
found in con- texts of industry and manufacturing. Kidder (1981) described the generative
processes by which a 32-bit supermini machine of Data General appeared. The 3 M Company's
creation of the "Post-It" note also epitomizes the generative process: the concept was conceived
in his spare time by a research scientist and was internally "bootlegged" and marketed upward
within the company. CEO Lewis Lehr recognized its potential and became its main supporter.
The idea ultimately turned into a $200-million 3 M company every year.
The task of top management in this mode is to promote creativity and risk-taking by
the organization's people and to promote the creation of the highest potential ideas. This
sponsorship position is achieved through a number of processes such as skunk works, innovation
time and the staffing of vital innovation positions to promote individual and team-based
innovation (Burgelman, 1984; Peters & Waterman, 1982). In this style, the identification,
creation and reward of product champions – the people who can connect innovative ideas with
organizational capital to make them a commercial reality – are of vital importance (Maidique,
1980; Roberts & Fusfeld, 1981). The generative mode therefore requires the continuous
adaptation of the strategy to match the trend of high-potential innovations that emerge from
below.

IMPLICATIONS FOR RESEARCH

The set structure suggests several directions for future study. The five strategy modes would
have to be operationalized and empirically tested as a first move. Beyond this, attention should
be centered on (a) determining the relation between strategy-making mode and firm results, (b)
examining the impact of key systemic contingency factors, and (c) exploring successful
strategic-making combinations or configurations.

Strategy-Making Mode and Firm Performance:

Present empirical research indicates substantial gaps in strategy-making processes between
successful and ineffective firms (Fredrickson, 1984; Fredrickson & Mitchell, 1984; Miller &
Friesen, 1977, 1983). The five strategy-making modes described in this article should also
display significant difference in performance. At one extreme (command mode), top
management prescribes desired actions by dictating policy from top to bottom, leaving little
position for members of the company except as implementers. Organizational leaders behave
more like "sheep" in the planning phase than like active participants. On the other extreme
(generative mode), top management abdicates strategic power by supporting and sponsoring
ventures introduced from the bottom up and adjusting strategy accordingly. Strategy benefits
from the operation of "wild ducks "— internal entrepreneurial independent initiatives.
 Relevant organizational skills and capacities are underused in both the command
and the generative modes. Between these two extremes there are strategic modes incorporating
elements of senior management and organizational-member initiative. In these situations, top
managers provide some sense of strategic direction through either symbolic, technological, or
process means, and organizational members are active participants in the strategic process (see
Figure 1). Since the three middle modes allow better use of organizational skills and resources,
they should be correlated with higher overall output rates in their pure form than either the
command or the generative modes. This leads to the following general proposition:
Proposition 1a: The symbolic, rational, and transactive methods of strategy making would be
more high-performance predictive than the command and generative modes are.
However, it is important to determine how the success of a company would be calculated to
make the proposal testable. As Venkatraman and Ramanujam (1986) have pointed out, a
multidimensional construct is firm output. They proposed three general levels of firm
performance:

F IG U R E 1
S t r a t e g y M a k i n g Mode and Firm P e r f o r m a n c e
C om m and S y m b o lic R a tio n a l T r a n s a c tiv e G e n e r a tiv e

R o le o f
Top M a n a g e m e n t

R o le o f
O r g a n iz a tio n a l
M e m b e rs
Low er Low er
H ig h e r P e r fo r m a n c e
P e r fo r m a n c e P e r fo r m a n c e
(G r e a t e r b a l a n c e b e t w e e n
(R o le (R o l e
re la tiv e c o n tr ib u tio n s o f
im b a l a n c e ) im b a la n c e )
to p m a n a g e r s a n d
o rg a n iz a tio n a l m e m b e rs )

1.Financial Performance: Accounting related indicators such as asset return (ROA), revenue
return (ROS), and equity return (ROE). Really tap those metrics on "actual productivity."
2.Business Performance: Measures based on the market like market share, production,
diversification and product creation. There tend to be two dimensions here: the growth / share
indicators in current companies (i.e., revenue growth and market share) and the indicators
relevant to the company's future positioning (e.g., new product creation and diversification).
3.Organizational Effectiveness: Measures focused on stakeholders, such as employee
satisfaction, productivity and social responsibility. There do seem to be two dimensions here: the
quality indicators (e.g. product quality, employee satisfaction, overall quality) and the social
responsibility measures (e.g. environmental and civil responsibility).
Thus, five dimensions of firm performance are proposed: (a) current profitability, (b)
growth/share, (c) future positioning, (d) quality, and (e) social responsibility. Given the
distinguishing orientations of the five strategy-making types, each should be linked to different
performance aspects. The command mode is not supposed to predict firm results on any
dimension because a large number of organizational member skills are underused in this case. In
certain cases, this mode can also be output related in a negative way. Likewise, there is no
assumption that the generative mode would bear a significant output relation. Conversely, for
different dimensions of efficiency, the three hybrid modes (symbolic, rational, and transactive)
should be closely correlated with positive outcomes.
These relationships are captured in the following specific propositions:
Proposition1b: Given its focus on mission and vision, it will positively connect the symbolic
mode with the positioning of future and growth / share.
Proposition1c: The logical mode would be favorably correlated with current productivity and
growth / share, despite its focus on structured planning and control systems.
Proposition1d: The transactive mode would be strongly correlated with quality and social
responsibility, despite its focus on feedback and learning.
Proposition1e: The command mode will not be correlated with any of the output dimensions
despite its orientation towards complete top management power.
Proposition1f: The generative mode will not be correlated with any of the output dimensions
provided its complete reliance on employee initiative.

Key Contingency Factors:

Since the early studies of Miller and Friesen (1983), Fredrickson (1983), and Fredrickson and
Mitchell (1984), empirical research on the process-performance relation has taken on a con-
tingency perspective. This pattern has continued to the present day (for example, Fredrickson,
1984, 1986; Fredrickson & Iaquinto, 1989; Miller, 1987a, 1989). It is clear that potential
researchers will need to analyze or monitor key contingency factors.
Miller (1987b) has argued that a range of factors are limiting the variety of organizations
and giving rise to different strategic modes. He cited four imperatives guiding the making of
strategies: climate, structure, leadership and strategy. Since leadership is captured within the
integrative framework-, three main contingency factors are proposed — environment, structure
(firm size, firm growth stage) and strategy. Consequently, contingencies for these factors are
established for each of the five strategy making modes (Table 5).
 Command mode: Since the top manager in the command mode determines policy
almost entirely, it is important that the market environment is not too difficult for one person (or
a very small top-management team) to grasp. Therefore, the command mode can only work well
in fairly simple circumstances-a low in complexity task setting (Dess & Beard, 1984). The
command mode should be used more frequently, for the same purpose, in relatively small
organisations, where one person can still retain effective control. Virtually any strategic strategy
should be achievable through the command mode, given that the top management retains
sufficient levels of control over the market. Thus, the following proposition:
Proposition 2a: Command mode will dominate most in fairly simple environments amongst
small organizations. In such cases, the command mode would also be correlated with higher
performance.
Symbolic mode: Unlike command mode, which should be limited to small
organizations, symbolic mode in larger, more differentiated organizations may become essential.
The symbolic mode must establish a corporate mission and vision that permeates the entire
organization. If the leaders of the organization cannot be convinced to share the vision or
interpret it as false or trivial, the resulting lack of commitment

TABLE 5
St r a t e g y - M a k i n g M o d e s and C o n t i n g e n c y F a c t o r s

Contingency
Factors Command Symbolic Rational Tranaactlve Generative
Environment Simple; Dynamic; High Stable; Low Complex; Many Turbulent;
Low-level velocity or degree of stakeholders Dynamic
complexity radical change and
change complex

Firm Size Small Medium-Large Medium-Large Large No relation

Stage of Firm No relation Rapid growth; Steady growth Mature No relation
Development Reorientation

Strategic No relation Proactive Solidify position Continuous Innovation

Orientation change (Defender) improvement (Prospector)
(Prospector/ (Analyzer)
Analyzer)

can threaten organizational performance. The mission and vision must reach everyone in the
company and guide their individual behavior. In a complex, high-velocity setting (Bourgeois &
Eisenhardt, 1988), the symbolic mode that hold the key to the speed and stability required for
strategic performance, as there is little room for top management to build comprehensive
planning or structured structures in these situations. Moreover, symbolic mode may be successful
in hostile (low munificence) in- (Dess & Beard, 1984) where strategic orientation change
becomes necessary. Given its emphasis on mission and motivation for change, the symbolic
mode should be more effective in supporting proactive strategies-prospectors or analyzers-than
advocates or reactors for reactive strategies (Foster, 1986; Miles & Snow, 1978). Thus, the
following proposition:
Proposition2b: The symbolic mode will be most prevalent among either rapidly rising or
reorienting firms in competitive, high-velocity environments adopting constructive strategies. In
addition, in these circumstances the symbolic mode is associated with higher efficiency.
Rational mode: Comprehensiveness of the study is a key feature of rational mode,
and research has shown that such a process strategy works well in a competitive setting that is
stable or predictable (Fredrickson 1983). Regardless of the great demands that this mode imposes
on top management, the risks of cognitive fatigue and "paralysis by thought" are often present,
making the logical mode particularly difficult in complex, rapidly evolving environments.
Indeed, the rational mode appears to be especially appropriate for firms experiencing steady (as
op- posed to rapid) growth, where the advantages of structured planning and control systems can
be realized in full. This style should also be seen more frequently in large organizations than in
small, new projects, given the degree of information processing needed. Finally, considering the
time it takes for this style to be implemented, it would continue to describe firms defending
stablished strategic positions (Miles & Snow, 1978) rather than firms trying to evolve or
radically alter. Thus, the following proposition:
Proposition2c: The rational mode will predominate among larger, steadily rising companies,
defending competitive positions in fairly stable environments. In addition, in these situations
rational mode will be correlated with higher efficiency.
Transactive Mode: Transactive mode is iterative and participatory in nature; such an
approach may be essential in market environments characterized by high rates of complexity and
heterogeneity (Dess & Beard, 1984), in order to achieve adequate awareness and consensus
among key stakeholders. These conditions may occur in industries with a diverse base of
suppliers or clients, and for foreign companies in a wide range of markets. In addition, broad
involvement in the strategy process can be crucial to social recognition and credibility for
companies influenced by a range of outside stakeholders. The transactive mode should be most
popular in large organizations operating in mature industries, despite its orientation towards
internal processes and organizational learning. In addition, despite the time-consuming and
somewhat gradual nature of such a method, an analyser approach aimed at gradual product or
service improvement should be supported more effectively (Imai, 1986; Miles & Snow, 1978). ).
Thus, the following proposition
Proposition2d: In mature industries characterized by heterogeneity and complex interactions
between vendors, customers and other stakeholders, the transactive mode will be most prevalent
among large firms adopting "analyzer" strategies. In addition, the transactive mode in these
situations will be correlated with higher efficiency.
Generative Mode: The generative mode relies on the organisation's creative
activities to generate the plan of the organization. The greatest strength of this style could also be
its greatest weakness-top management exercises with very little strategic influence over the
organization, making it impossible to participate in any large-scale changes involving central
coordination or "synergy" throughout the organizational units. Therefore, this style should be
especially well suited for companies in volatile environments, characterized simultaneously by
both dynamism and uncertainty (Emery & Trist, 1965). Under these circumstances, careful
strategizing of some kind may become difficult. The generative mode would better help a
prospector strategy in diverse and competitive markets, due to its orientation towards
decentralized entrepreneurship (Miles & Snow, 1978). Thus, the following proposition:
Proposition2e: The generational mode will prevail most among companies operating in turbulent
(complex and rapidly changing) market environments, where prospecting is critical for
competitive success. In addition, in these circumstances the generative mode is correlated with
higher performance.

Combinations and Configurations:

Although these recommendations provide insight into the process-performance relation, they are
obviously incomplete: they have the advanced time to define the independent effects of each of
the five strategy-making modes, but do not indicate the combinations or mode packages function
especially well (Hambrick, 1984). As Miller and Friesen's research (1984) suggests, thinking of
firms as having combinations of styles and processes may be more true. Growing of the five
modes of strategy-making reflects specific forms of processes that can be combined in various
organizational combinations. The effect is distinctive gestalts or configurations for creating the
strategy.
Several scholars have specifically suggested how beneficial it would be to combine various
strategic types, either sequentially (Allison, 1971: 255) or at the same time (Mintzberg, 1973:
44). Nonaka (1988) outlined a strategy-making process in which top management develops a
vision or dream and middle management invents and implements concrete ideas to solve the
contradictions that arise from what exists now versus what top management hopes to create. This
strategy making approach, described as middle-up-down, incorporates elements of the symbolic
and generative modes.
Chaffee (1985) went beyond this approach to imply that a hierarchy of styles of strategy-making
could exist, whereby each successive level of strategy-making integrates those less complex. She
suggested that the first level is in linear (rational) mode. The second level, the adaptive
(transactive) mode, integrates linear mode, and the most complex level — the interpretive
(symbolic) mode — combines all three together in the form of a gestalt.
Companies that can combine multiple modes into a high "process efficiency" may be expected to
perform better on more output dimensions than single-mode or less process-capable
organizations. For example, a organization that combines elements of the symbolic and
transactive modes will balance commitment to a common (symbolic) vision and mission with a
strong learning orientation (transactive). Such a business should be doing well in terms of
production, quality and planning for the future. A company, on the other hand, which is
restricted to the rational mode will display high profitability, but may be weaker in relation to
other performance parameters. In short, any single mode alone can suffer from limitations and
bi-ases; combining the various logics associated with the five modes can hold the potential for
fewer blind spots and better performance (Prahalad & Bettis, 1986); In general, the greater the
strategic ability of the organization in each mode and the greater the number of strategic modes it
combines, the higher its performance, which suggests the following proposition:
Proposition3a: The more skills firms can build in multiple strategy-making modes (high-process
capacity), the better their performance in all dimensions.
However, not every combination of modes will produce comparable per-formance. Indeed, the
emerging theory of organizational efficiency (e.g., Bourgeois & Eisenhardt, 1988; Quinn, 1988;
Quinn & Cameron, 1988) indicates that high performance involves a balancing and simultaneous
mastery of seemingly conflicting or paradoxical organizational capabilities, Determination and
reflectivity, broad vision and attention to detail, bold steps and gradual change. In a similar vein,
Pondy (1983) stressed that when executives combine rational-analytical techniques with
intuition, they are most successful
Therefore, strategic architectures incorporating inconsistency or paradoxical modes should be
correlated with high efficiency. Conversely, configurations of identical modes should be related
to reduced output. More precisely, proximal modes (those with more common positions for top
managers and organizational leaders such as transactive and generative modes) will appear to
occur in lower-performing firms together, whereas distal modes (e.g., command and generative)
should be found in higher-performing firms together. This notion leads to the following
propositions:
Proposition3b: Higher performing firms will combine distal modes of strategy making.
Proposition3c: Lower performing firms will combine proximal modes of strategy making.

SUMMARY AND CONCLUSIONS

This article provides a structure for processes of strategy making that integrates the fragmented
literature on the subject. Indeed, over the past 40 years a lot of academic focus has been given to
the topic of strategy making. The issue of whether strategy making can (or should) be moral has
been discussed in several classic works. Authors have also concentrated on top management
vision concepts and the role of organizational leaders in the creation of strategies. Most of the
previous literature has therefore centered either on a common theme (e.g., rationality) or on one
group of actors (e.g., top management) to the exclusion of others. Hence, subsequent typologies
tended to compete or overlap, but none captures the full range of associated content.
As guiding principle for the integrative system, the positions played by both top managers and
organizational leaders were selected. The juxtaposition of these functions made it easier to define
five common strategic modes: command, symbolic, rational, transactive and generative. This
modes and roles framework was then used to define several research proposals that related the
process of strategy-making to the firm performance.
Nevertheless, there is still a lot of effort to operationalize and enforce the integrated system.
While the five modes tend to be the correct degree of aggregation for literature integration and
reconciliation, they also need to be empirically grounded. Therefore, it is recommended that
researchers seek to establish accurate and reliable measures of the five strategy modes. Ideally, in
a broad sample of organizations, they can use data obtained from both top executives and
organizational leaders. A natural outcome of this study will be the degree of agreement or
consensus between the two organizational levels on strategy-making processes (e.g., Wooldridge
& Floyd 1989, 1990).
Once the five strategy-making modes have been assessed, process-performance linkage studies
will follow. Extensive analytical work will be needed to analyze the research questions and
recommendations on the approach and firm performance established in this article. Multiple
complementary research designs are recommended to accurately monitor the defined
contingency factors (Dess, Ireland & Hitt, 1990): large, multi-industry survey studies will help to
determine the overall relationship between strategy-making and firm performance processes.
Targeted studies of particular sectors and types of firms are suitable for evaluating the different
dependent proposals associated with the System. Assuming that companies combine or merge
multiple strategy-making modes into different process capability levels, case-comparative
(qualitative) research will be a useful and valuable means to explore more detailed strategy-
making configurations. Such research could un-cover how companies combine or blend more
than one style of strategy making, and could explain how high process capacity making strategy
is currently embedded in organizations. Lastly, quantitative research will be undertaken to
uncover how strategic processes change and to discover how organizations gain power in
additional ways over time.
It is evident from the above is that decision making can no longer be conceptually limited to
either the chief executive or the top-management team. Instead, strategy-making needs to be
conceptualized as a process across an enterprise. Specifying the complementary positions played
by top executives and leaders of the company helps to explain how strategy is ultimately built
within organizations.