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A Model of the Interaction of Strategic Behavior, Corporate Context, and the Concept of

Author(s): Robert A. Burgelman
Source: The Academy of Management Review, Vol. 8, No. 1 (Jan., 1983), pp. 61-70
Published by: Academy of Management
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?Academy of Management Review 1983, Vol. 8, No. 1, 61-70

A Model of the Interaction of

Behavior, Corporate Context,
and the Concept of Strategy1
Stanford University

Based on a review of previous landmark studies and in the light offindings

of recent research on internal corporate venturing, a model of the strategic
process in large, complex firms is presented under which the propositions
"structurefollows strategy" and "strategyfollows structure" can both be
subsumed. Current corporate strategy induces some strategic behavior but
changes in corporate strategy follow other, autonomous, strategic

The study of the relationships between strategy ties are of two kinds. Most strategic activities are in-
and structure in large, complex firms remains of duced by the firm's current concept of corporate
central concern to scholars in the fields of strategic strategy, but also emerging are some autonomous
management and macro organizational behavior. strategic activities, that is, activities that fall outside
Previous research has, indeed, produced apparently the scope of the current concept of strategy. The
conflicting propositions regarding the directionality consequences of this distinction for the strategic
of these relationships. Depending on which body of process have not previously been made the subject
empirical evidence is used to bolster the argument, of systematic analysis.
"structure follows strategy" and "strategy follows Autonomous strategic activities have been docu-
structure" both seem to be valid propositions (Bow- mented by the students of unrelated diversification
er & Doz, 1979; Galbraith & Nathanson, 1979; Hall through internal corporate venturing (ICV) (Big-
& Saias, 1980). The present paper contributes to the gadike, 1979; Burgelman, 1980, Fast, 1979). Fast's
resolution of this apparent contradiction by eluci- study of new venture divisions in large, diversified
dating further the conditions under which each of firms, for instance, has provided incidental evi-
these propositions may be valid. dence of the autonomous nature of the strategic ac-
The analysis presented here rests on two critical tivities involved in new venturing. As a participant
insights. First, both propositions need to be con- in one of the firms in Fast's study observed:
sidered in terms of what they imply about the na- Top managementsaw a need for venturesand said,
ture of the strategic process. As previous research- "Go ahead and do it." Nobody reallymanagedor
ers have observed (Bower & Doz, 1979), the strate- directedit. So the whole companybeganto get into
venturesbut therewas no cleardirectionor purpose
gic process in large, complex firms consists of the
(1979, p. 76).
strategic activities of managers from different levels
in the organization. Second, these strategic activi- Biggadike's (1979) large sample study of new en-
tries at the business level of analysis also suggests
'Support for this paper from New York University's Graduate the autonomous nature of new venture activities.
School of Business Administration and from the Strategic
Management Program of Stanford University's Graduate School
Even though ICV projects required the commit-
of Business is gratefully acknowledged. Michael L. Tushman ment of substantial amounts of resources over sub-
(Columbia University), Eric J. Walton (New York University), stantial periods of time and changed the scope of
L. Jay Bourgeois, David B. Jemison, and Steven C. Wheelwright
(all of Stanford University) have made helpful comments on the corporate business portfolio when they were
earlier drafts of this manuscript. successful, there seemed to come little guidance
from the firms' current corporate strategy for these tiatives were not the result of an a priori clearly for-
ICV efforts. mulated corporate strategy on the part of top man-
Neither Fast nor Biggadike has attempted to con- agement. Rather, the corporate strategy emerged
ceptualize the corporate strategic process in which through a somewhat haphazard process. It was the
new ventures take shape. Yet both researchers have result of final authorizations by top management of
suggested that the research of Bower (1970) and his strategic projects that had successfully absorbed the
students could be useful to conceptualize the cor- firm's excess resources and promised to do so pro-
porate strategic processes involved in ICV. In- fitably in the future.
dependent of these suggestions, Burgelman's (1980) Chandler raised the important question: "Why
study of ICV project development in the diversified did the new strategy which called for a change in
major firm has found that Bower's model is indeed structure, arise in the first place?" (1962, p. 14). He
useful but needs to be extended. This study has pro- refers to the major changes in the external environ-
vided systematic field data from which the category ment that had created opportunities for the use of
of autonomous strategic behavior has been in- existing excess resources of the firm. At the conclu-
duced. It also has provided additional insight in the sion of the study, Chandler refers to Penrose's
corporate context processes in which ICV project (1968) work and suggests that his data supports her
development is embedded (Burgelman, 1982). theoretical analysis of the growth of the firm.
These insights concerning the nature of strategic Penrose's analysis, however, emphasizes the in-
behavior and corporate context processes provide ternal impulse toward growth. She observes that the
the basis for reanalyzing the landmark studies from recognition of opportunities takes place in the mind
which the two apparently contradictory proposi- of managers and is often independent of changes in
tions concerning the relationships between strategy the external environment. In fact, Penrose fore-
and structure have been derived. bodes the concept of the "enacted environment"
(Weick, 1979):
Structure Follows Strategy In the last analysis, the "environment"rejects or
confirmsthe soundnessof the judgmentsabout it,
The proposition that structure follows strategy but the relevantenvironmentis not an objectivefact
became firmly established as a result of Chandler's discoverablebeforethe events(Penrose,1968,p. 41).
(1962) study of the historical development of major Implicit in the affirmation of the relevance of
U.S.-based industrial firms in the period 1919-1959. Penrose's analysis seems to be the recognition that
Subsequent empirical research in the multinational corporate development was not really the result of
context, and in firms situated in other countries of top management taking a fresh look at the environ-
the Western world, generally has corroborated the ment, then formulating a strategy, and then estab-
structure follows strategy proposition (Galbraith & lishing the appropriate structural arrangements to
Nathanson, 1979). Relatively little can be learned implement the strategy. In reality, the structural
about the strategic process underlying Chandler's rearrangements reflected efforts to consolidate the
proposition from these large sample, verification- results of autonomous strategic behavior. The new
oriented follow-up studies. The original field study, strategy reflected the recognition of the importance
however, can be reexamined to evaluate the extent of these strategic actions. In the final analysis,
to which the original theoretical generalizations Chandler's study seems to indicate that changes in
were grounded. corporate strategy followed autonomous strategic
Strategy Follows Autonomous Strategic Behavior
Heroic View of Top Management
Chandler's case materials indicate that major
structural adjustments followed the experience of Chandler's case data suggest that multiple layers
severe management problems after strategic initia- of management were involved in the strategic initia-
tives had been undertaken in areas unrelated, or on- tives that produced the extensive diversification,
ly marginally related, to the traditional lines of and in response to which the new strategy and the
business of the firm. new structure eventually emerged. The theoretical
The case data also indicate that these strategic ini- generalizations, however, collapse this strategic

process into a top management activity. Even can be verified in the light of the findings of another
though the influence of lower levels in the deter- major line of research in the field of strategic
mination of the content of the strategy is recog- management.
nized, the major emphasis is on the role of top
management. Yet, as the du Pont case materials Strategy Follows Structure
suggest, top management's influence before the
reorganization was very limited, with the real in- The process oriented line of research in strategic
fluence over strategic behavior situated at the management has taken the concepts of the "deci-
department head level. It was only after H. Fletcher sion making" (Cohen, March, & Olsen, 1972; Cyert
Brown wrote a penetrating analysis of this situation & March, 1963; March & Simon, 1958) and "in-
(Chandler, 1962) that the strategic role of the ex- stitutional" (Selznick, 1957) orientations in
ecutive committee (representing the whole corpora- organization theory, and the "incrementalist"
tion) became firmly established. theory in strategy making (Lindblom, 1959) as its
In spite of a preoccupation with the role of top points of departure. These theories allow for a
management in the strategic development of the bottom-up conception of strategy formulation in
firms studied, Chandler presents data that question which top management's role is not necessarily
the relative importance of this role, ironically even critical-one in which the concepts of strategy and
with respect to the decisions to change the structural structure are not clearly delineated from each other
arrangements: (Bower, 1974), nor are operational decisions
At du Pont, GeneralMotors, and JerseyStandard, delineated from strategic decisions (Ansoff, 1965).
the initial awarenessof the structuralinadequacies Basically, this is Chandler's view upside down. Im-
causedby the new complexitycame from executives
close to top management,but who were not them- portant empirical research has investigated the
selves in a positionto make organizationalchanges. usefulness of these theoretical orientations for the
In all cases, thepresidentgave no encouragementto understanding of the process whereby key decisions
theproposersof change(1962,p. 308, emphasispro- are made in complex organizations. It has extended
vided). the theory by clarifying the role of top management
And after reflecting on the meaning of the data, in these processes (Aharoni, 1966; Allison, 1971;
Chandler puts forward another key question: Carter, 1971).
But if the stockholdersand the board becamecap- A landmark study concerning the strategic pro-
tivesof the fulltimeadministrators,werenot the pro- cess is Bower's (1970) carefully designed, longi-
fessional entrepreneursthemselvescaptivesof their
subordinates?Were not the informationand alter- tudinal field study of the management of strategic
natives available to the top determined,possibly capital investment projects in the "diversified ma-
quite unconsciously,by junior executivesdown the jor" firm. Probably the most complex type of divi-
line?Mustnot then the enterpriseor the organization sionalized firm, the latter encompasses an agglo-
as a whole be consideredresponsiblefor the basic meration of widely diversified but partially related
economicdecisions?If this is so, then no individual
or team of individualscan be identifiedas the key businesses grouped into major divisions whose
decisionmakersin the privatesectorof the American general managers report to corporate management.
economy(1962, p. 313).
Chandler concludes that the case data challenge Strategy Making-A Multilayered Process
the view that the role of top management was not Bower's study documents the manner in which
predominant. This conclusion, however, is based the strategic capital investment process in such
on the observation that the new structure had firms is spread over the management hierarchy.
facilitated top management's role in strategy for- Three major subprocesses could be discerned, each
mulation and entrepreneurship after it had been put of which, in turn, comprised three major phases
in place. The case data relating to the situation related to activities of managers at particular levels
before the reorganization do not support the heroic in the organization.
view of the role of top management. Furthermore, At the product/market level in a division, pro-
the proposition that the new type of structural ar- posals are defined in technical/economic terms.
rangement would lead to a greater role for top man- This definition process is triggered by a perceived
agement in the formulation of corporate strategy discrepancy between strategic business objectives

and existent physical plant capacity available to at- If structureis to shape strategy,what vision shapes
tain these. Projects survive only if they receive im- structureand how is that vision to be developed?
Who has a say in the process?Moreresearchis need-
petus from divisional level management. This im- ed (1979, p. 159).
petus process is highly political, because managers
at the divisional level are aware that their career A Model of the Interaction of Strategic
prospects depend, to a large extent, on developing a Behavior, Corporate Context, and the
good "batting average" in supporting strategic pro-
Concept of Strategy
jects. Thus managers will evaluate proposals in the
light of the reward and measurement systems that Based on the findings of the process study of
determine whether it is in their interest to provide ICV, and on the insights derived from the preceding
impetus for a particular project. At the corporate review of Chandler's and Bower's studies in the
level, the major contribution is precisely the mani- light of these findings, a new model of the strategic
pulation of the structural context within which the process in large, complex firms can be constructed.
proposal generation takes shape. Through the ma- This new model sheds additional light on the impor-
nipulation of structural context, top management tant questions raised by Bower and Doz. It provides
can influence the type of proposals that will be a conceptual framework from which the two major,
defined and given impetus. apparently contradictory, propositions in the field
Whereas definition and impetus are primarily, if of strategic management can be deduced simultane-
not exclusively, bottom-up processes, the design of ously. Figure 1 represents this model.
the structural context is primarily, if again not ex-
clusively, a top-down process. Thus, to the extent Variation, Enactment, and Strategic Behavior
that capital investment proposals reflect strategic This model, inductively derived, is isomorphous
business planning, it is possible to posit that to the variation-selection-retention model currently
strategy making is both a bottom-up and top-down emerging as a major conceptual framework for ex-
multilayered process (Bower, 1974). Because of the plaining organizational survival, growth, and devel-
effects of structural context on the generation and opment (Aldrich, 1979). Its orientation also is in
shaping of strategic projects, it also is possible to line with current theoretical efforts (White &
posit that strategy follows structure. However, to Hamermesh, 1981) to integrate research done in in-
the extent that the structural context reflects a given dustrial organization economics, organization
concept of corporate strategy, Bower's study ac- theory, and business policy. The model presented
tually indicates that corporate strategy induces here, however, integrates the business and cor-
strategic behavior. porate levels of analysis and applies to the class of
firms that are large enough and sufficiently re-
A Less Heroic View of Top Management
source-rich to be relatively independent of the tight
Bower's study has provided the basis for further control of external environment selection. Such
research of the strategic process in various types of firms are able to engage in "strategic choice"
organizations and concerning different classes of (Child, 1972) and, as pointed out earlier, their
strategic decisions. These have further elucidated strategic choice process involves substantive inputs
the social and political forces in and around the from managers from different levels in the organi-
strategic process (Hofer, 1976). zation. Internally generated variation, resulting
Recently, Bower and Doz have articulated a ma- from the "enactment" (Weick, 1979) of the en-
jor implication of this line of research, which con- vironment is, at the minimum, a very important
cerns an alternative view of the role of top manage- source of variation in such firms (Penrose, 1968).
ment in the strategic process: Strategic behavior, in the model presented here,
Thus, in contrast to strategy formulation as the refers to such enactments.
criticaldirection-settinggeneralmanagementactiv- The model proposes that two generic categories
ity, this new processschool of researchsuggestedan of strategic behavior can be discerned in such large,
alternative,that is, managingthe strategicprocess
(1979, p. 158). complex firms: induced and autonomous. Induced
Yet, as the authors point out, it is not clear how the strategic behavior uses the categories provided by
management of the corporate phase can be done: the current concepts of strategy to identify oppor-

Figure 1
A Model of the Interaction of Strategic Behavior,
Corporate Context, and the Concept of Strategy
1 (7)

tunities in the "enactable environment" (Weick, create momentum for their further development.
1979). Being consistent with the existing categories Middle level managers attempt to formulate
used in the strategic planning system of the firm, broader strategies for areas of new business activity
such strategic behavior generates little equivocality and try to convince top management to support
in the corporate context. Examples of such strategic them. This is the type of strategic behavior en-
behavior emerge around, among others, new prod- countered in the study of internal corporate ventur-
uct development projects for existing businesses, ing (Burgelman, 1980; Roberts, 1980). The strategic
market development projects for existing products, initiatives leading up to the corporate managerial
and strategic capital investment projects for existing problems documented by Chandler (1962) also
businesses. Such strategic behavior is shaped by the would seem to fall under this category. Such
current structural context. For instance, it can be autonomous strategic initiatives attempt to escape
judged relatively easily in the light of current the selective effects of the current structural con-
evaluation and measurement systems. This is the text, and they make the current concept of corpo-
type of strategic behavior documented by Bower rate strategy problematical. They lead to a redefini-
(1970). It follows corporate strategy. Hence, the tion of the corporation's relevant environment and
feedback loop (1) in Figure 1 between concept of provide the raw material for strategic renewal. They
strategy and induced strategic behavior. precede changes in corporate strategy.
During any given period of time, the bulk of stra-
tegic activity in a firm is likely to be of the induced Corporate Context and Selection
variety. The present model, however, proposes that One of the key insights of the study of ICV, re-
large, resource-rich firms are likely to possess a flected in the model presented here, is that the cor-
reservoir of entrepreneurial potential at operational porate context within which the strategic process
levels that will express itself in autonomous takes place encompasses two distinct, selective pro-
strategic initiatives. Autonomous strategic behavior cesses: structural context determination and strate-
introduces new categories for the definition of op- gic context determination.
portunities. Entrepreneurial participants, at the Structural context determination is a broad enve-
product/market level, conceive new business op- lope concept used to denote the various administra-
portunities, engage in project championing efforts tive mechanisms that corporate management can
to mobilize corporate resources for these new op- manipulate to change the perceived interests of the
portunities, and perform strategic forcing efforts to strategic actors in the organization. In the study of
ICV, it was found to encompass the choices of top Strategic context determination reflects the ef-
management regarding the overall structural con- forts of middle level managers to link autonomous
figuration, the degree of formalization of positions strategic behaviors at the product/market level into
and relationships, the criteria for project screening, the corporation's concept of strategy. To do so, the
the measures of managerial performance, and the middle level managers must make sense out of these
appointment of middle level managers with parti- autonomous strategic initiatives and formulate
cular orientations toward entrepreneurial initiative. workable, attractive strategies for the correspond-
Bower (1970), of course, had identified earlier the ing areas of new business development. In addition,
selective nature of this important process. they must engage in political activities to convince
Structural context determination reflects the ef- top management to rationalize, retroactively, these
forts of corporate management to fine-tune the successful initiatives by amending the concept of
selective effects of the administrative arrangements strategy to accommodate the strategic initiatives.
so as to keep (or bring) the strategic proposal This aspect of the process underlies the proposition
generating process in line with the current concept that strategy follows autonomous strategic behav-
of strategy. This part of the model corresponds to ior. Thus, strategic context intervenes between
Chandler's propostion that structure follows stra- autonomous strategic behavior and concept of stra-
tegy. Hence, the feedback loop (2) in Figure 1 be- tegy-(5) and (8) in Figure 1.
tween concept of strategy and structural context. The intervening effect of structural context is
Over time, this fine-tuning may make the struc- limited here. In the ICV study, this influence was
tural context more elaborate, with more rules ap- reflected only in the concerns of the actors to
plied to the induced strategic behavior. As a result, demonstrate large potential size and fast growth
the range and scope of these strategic behaviors rate for the ICV projects. Hence, the dotted arrow
may become narrower while their probability of (6) from structural context to strategic context in
failure may decrease. One major consequence of Figure 1.
the increased selective efficiency of the structural The degree to which middle management is suc-
context is that fewer of the selected strategic pro- cessful in activating the process of strategic context
jects have the potential to force a significant change determination provides guidance for further entre-
in the concept of strategy. Standardized, quantita- preneurial initiatives at the operational level. This is
tive procedures for project screening, uniform cate- represented by the dotted feed-forward loop (7) in
gories of strategic planning unit systems, selection Figure 1. It is a feed-forward loop because it guides
of higher level managers with strong corporate further strategic initiatives in a particular new area
orientation in their decision making, all tend to before this area has become incorporated in the
reduce the variation in the strategic proposals se- concept of strategy of the firm. It is represented as a
lected by the firm and provide the basis for the pro- dotted line because the guidance is relatively tenta-
position that strategy eventually follows structure. tive and ambiguous.
Thus, structural context intervenes between induced The Concept of Strategy and Retention
strategic behavior and the concept of strategy-(3)
and (4) in Figure 1. This part of the model corre- From the perspective of a process study, the con-
sponds to Bower's findings. cept of strategy of large, complex firms can be
Chandler's proposition focused on the role of top viewed as the result of the selective effects of the
management in bringing structure in line with new corporate context on the stream of strategic
strategy. Bower focused on the effects of structure, behaviors at operational levels. The present model
given strategy. Both studies paid relatively little at- proposes that the concept of corporate strategy
tention, at least in the conceptualization of the find- represents the more or less explicit articulation of
ings, to the role of autonomous strategic behavior the firm's theory about its past concrete
in the process through which corporate strategy achievements. This theory defines the identity of
becomes articulated and changed. The study of ICV the firm at any moment in time. It provides a basis
has focused on the latter process. This has allowed for the maintenance of this identity and for the con-
identification of the process of strategic context tinuity in strategic activity. It induces further
determination. strategic initiative in line with it.

Corporate level managers in large, diversified divisionalized firm emerged as a new generic type.
major firms tend to rise through the ranks, having Once the concept of strategy of the firm has been
earned their reputation as head of one or more of established through top management's ratification
the operating divisions. By the time they reach the of successful autonomous strategic behavior, struc-
top management level they have developed a highly tures can be designed and refined to select and
reliable frame of reference to evaluate business shape strategic proposals compatible with this con-
strategies and resource allocation proposals pertain- cept of strategy. Bower's study has documented the
ing to the main lines of business of the corporation. latter processes. Structural design, however, does
Top managers, basically, are strategies-in-action not work like a well-calibrated sieve. Autonomous
whose fundamental strategic premises are unlikely strategic activities continue to escape the selective
to change (Kissinger, 1979). It therefore is not sur- effects of the structural context by mere chance or
prising that corporate management focuses on the because alert actors are able to circumvent, or play
manipulation of the structural context to keep stra- to their advantage, the selective mechanisms. In any
tegic behavior in line with the current concept of case, the result can be strategic activity falling out-
strategy. In the operating system of the firm, this side the established strategy. In a more deter-
fosters predictability and integration of strategic ac- ministic sense, structure may motivate or impede
tivity: strategy-making takes on a "planning" mode strategic activity in unanticipated ways (Greiner,
(Mintzberg, 1973). 1972; Mintzberg, 1978).
To the extent that the current concept of strategy Structure and strategy thus exist in a reciprocal
is deeply ingrained in corporate management, its relationship to each other. Depending on which
capacity to deal with the substantive issues pertain- part of the strategic process is observed, both
ing to new technological and market developments "structure follows strategy" and "strategy follows
can be expected to be low. Rather than activating structure" can be correct propositions.
the process of strategic context determination, top The present paper has attempted to provide fur-
management is likely to rely also on the manipula- ther insight in the strategic process of large, com-
tion of the structural context to bring autonomous plex firms by focusing on the interaction between
behavior under control. Ironically, from this ana- the corporate level process of relating structure to
lytical perspective, the establishment of a new ven- strategy, and the process of strategic behavior at the
ture division constitutes a manipulation of the product/market and middle levels in the firm. The
structural context to reduce the variability in the model presented here accommodates the conven-
operating divisions rather than the implementation tional, normative proposition that corporate stra-
of a strategy of unrelated diversification. Also, tegy induces strategic behavior. In addition, and
from this perspective, Fast's (1979) finding that the perhaps more fundamentally, the model reflects the
position of a new venture division in the corporate new proposition that the more dramatic changes in
context is precarious and Burgelman's (1980) obser- the corporate strategy of large, complex firms are
vation of wide oscillations in new venture activity likely to have been preceded by autonomous strate-
are not surprising. Nor is the finding that the activa- gic initiatives at the operational and middle levels of
tion of the strategic context requires great concep- the organization: strategy follows autonomous stra-
tual and political skills on the part of middle level tegic behavior. The complete list of propositions
managers. embedded in the model presented in this paper are
summarized in Table 1. It is hoped that these will
Conclusions and Implications stimulate further theoretical and empirical research
in the field of strategic management.
The widening of the scope of a corporation's The present paper focuses the attention of practi-
business portfolio as a result of successful autono- tioners of strategic management on the dilemmas
mous strategic activity puts strain on its admini- that result from the opposing tendencies in large,
strative machinery. Periods of unrelated diversifica- complex firms toward stability and change. Coher-
tion thus are likely to be followed by periods of con- ence, continuity, and stability in corporate strategy
solidation. Chandler's study has documented such require the institutionalization of strategic behavior
cycles during the period 1919-1959, out of which the through strategic planning systems. Corporate en-

Table 1 both induced and autonomous strategic behavior.
Propositions Concerning the Interaction They attempt to strike the kind of balance discussed
of Strategic Behavior, Corporate Context, in the previous paragraph. "Prospectors" empha-
and the Concept of Strategy size autonomous strategic behavior. They, how-
(1) The current concept of strategy induces some but usually
ever, face the problem of maintaining coherence
not all strategic activity in large, diversified firms. and continuity in their corporate strategy.
Therefore, at any moment in time, the totality of strategic "Defenders" emphasize induced strategic behavior
activity of such firms is usually a mixture of induced and
autonomous strategic behavior. based on a very clear concept of corporate strategy.
(2) The current concept of strategy leads to the establishment Such firms face the long run danger of a lack of
of a structural context aimed at keeping strategic behavior
at lower levels in line with the concept of corporate creativity and renewal in their corporate strategy.
strategy. In this sense, structure follows strategy. Finally, "reactors" have neither a clear corporate
(3) Structural context intervenes in the relationship between
induced strategic behavior and concept of strategy. It strategy to induce strategic behavior nor the en-
operates as a selection mechanism on the stream of in- trepreneurial capabilities related to autonomous
duced strategic behavior. In this sense, strategy follows
structure. strategic behavior. They find themselves in a
(4) Over time, structural context reduces the variation in in- dangerously unstable situation.
duced strategic behavior, and may thereby prevent
strategic learning on the part of the firm. This is another The model of the strategic process presented here
aspect of the strategy follows structure proposition. seems also relevant for the emerging theory of
(5) Strategic context intervenes in the relationship between
autonomous strategic behavior and concept of strategy. organizational learning. The concept of strategy of
Through the activation of the process of strategic context a corporation and the corresponding structural ar-
determination, autonomous strategic behavior can become
integrated in the concept of strategy of the firm. rangements impound the learning of the firm over
(6) Structural context intervenes only to a limited extent in the time. The concept of strategy provides a more or
relationship between autonomous strategic behavior and
concept of strategy. less explicit, and more or less shared, frame of
(7) The activation of the process of strategic context determi- reference or "paradigm" (Duncan & Weiss, 1979;
nation has a weak influence on maintaining the volume of
autonomous strategic behavior in the firm. Jelinek, 1979) concerning the bases of the firm's
(8) Over time, changes in the concept of strategy are the result
of the retroactive rationalization of autonomous strategic
past success. Not unlike the sociological notion of a
behavior. This, in turn, changes the basis for the further paradigm (Kuhn, 1970; Masterman, 1970), it pro-
inducement of strategic behavior. vides guidance for further strategic action in line
trepreneurship and the resulting strategic renewal of with it. At the same time, it crystallizes the at-
large, complex firms, on the other hand, require the titudinal and social factors that were selected
interlocking autonomous strategic initiatives of in- together with the cognitive, substantive factors
dividuals at operational and middle levels, and an underlying the past success. As such, it also is likely
experimentation-and-selection approach at the cor- to prescribe, often implicitly and tacitly, attitudes
porate level. Maintaining a pragmatic balance be- and managerial styles and an ideology deemed nec-
tween these fundamentally different requirements essary for the prolongation of the firm's success.
presents a major challenge for top management. Autonomous strategic behavior, identified here as
This is evident, for instance, in the problems of the major source of strategic renewal, thus is likely
dealing with performance differences between divi- to encounter nonrational obstacles in its efforts to
sions (Hamermesh, 1977) and in the need to provide convince top management that changes in corporate
strategic guidance for different types of strategic strategy are necessary.
business units (SBUs) in the corporate business Further research may find it useful to explore
portfolio. The present paper suggests that such these less obvious, potentially entropic (Rifkin,
challenges may be met more readily by recognizing 1980) consequences of a concept of corporate stra-
the different requirements of different strategic tegy for organizational learning. Such research also
situations existing simultaneously in the organiza- could shed more light on the factors-external
tion. and/or internal to the firm-that influence the
The distinction between autonomous and in- balance between induced and autonomous strategic
duced strategic behavior in the model presented in behavior at any given moment in time, and the evo-
this paper also provides a theoretical foundation for lution of this balance over time. In the same line of
the deduction of the categories in Miles and Snow's thought, further research also could investigate the
(1978) typology. "Analyzers" are firms high on role of acquisition and divestment as compensatory

mechanisms-positive and negative, respectively haust the full content and meaning of the data.
-for the firm's adaptationefforts throughautono- Such researchallows progressthroughan iterative
mous strategicbehavior. process: new conceptuallenses can be brought to
Finally,the presentpaperillustratesan important bear on old data to generatenew insights.Through
characteristicof field research. The conceptual this process, the old insightscan be refinedand/or
frameworksinducedfrom such researchseldomex- some of their additionalimplicationsrevealed.

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Robert A. Burgelman is Assistant Professor of Manage-

ment in the Graduate School of Business, Stanford