Strategic Decision Processes (Group 5)

Strategic
Decision
Processes
Strategy Process Group 5

T T H E TE
E
AM
ME
ABUBAKAR AHMAD ANGGA TIRTA FANIA NAOMI H.

2306188153 2306188222 2306188361
STRATEGIC
DECISION MAKING
Strategic decision-making refers to the process of making
choices related to an organization’s overall, long-term direction.
This includes deciding on objectives, resources, and capabilities

to be developed and the key actions needed to achieve these
objectives in the context of all the relevant internal and external
circumstances.
(Mintzberg, Lampel, Quinn, Ghoshal, 2003)

Kenneth Andrews (1955) defined strategy as “The pattern of objectives, purpose,
goals and the major policies and plans for achieving these goals stated in such a
way so as to define what business the company is in or is to be and the kind of
company it is or is to be".
In 1971, he regarded Strategy Process as a

sequence of clearly defined phases: “formulation”
and “implementation,” or also referred to as
“agenda building” and “decision, implementation,
and control.”
Decisions were the relevant objects of analysis.
Strategy formulation was perceived as a decision-
making process, since it was through decisions that
the agenda of the corporation was shaped and
defined.
The formulation and implementation of strategies
KENNETH R. ANDREW was an active, goal-oriented process.
did not simply happen spontaneously nor
Strategies
were they
just subjects of expost rationalization, but were
made explicitly and deliberately, prior to action.
This process was initiated and driven by top
management. Strategies shaped the future of
a corporation and therefore the responsibility
for their formulation and implementation had
to rest with top management. Middle and
lower management participated in the ongoing
process by providing the necessary
information, serving as facilitators in both the
formulation and implementation phases.
Strategy process is tremendously crucial to

the point that the possibility corporations
might not have a strategy at all was not dealt
with, nor even considered.
KENNETH R. ANDREW
(Andrew, 1971)
In 1987, Mintzberg proposed a holistic approach that considered
various dimensions of strategy, known as 5P, covering the methods of
formulating which occured within strategy processes.
MINTZBERG’S MODES OF STRATEGIC DECISION MAKING
Henry Mintzberg (1973)
James Brian Quinn added Logical

Incrementalism in 1980
ENTREPRENEURIAL ADAPTIVE
MODE MODE
Single individual Managers wait for

formulates the strategy issues to happen
Opportunities are Reactive solutions for
focused existing problems
Vision of direction Lacks clarity on
guides the strategy direction and consensus
PLANNING LOGICAL
MODE INCREMENTALISM
Systematic information Interactive strategy

gathering development process
Feasible alternative strategy Incremental commitments to
generation main strategy
Rational selection of Debates and discussions for
sustainable strategy consensus
Proactive search and reactive Resource commitment in rapid
solution changes
DECISION-MAKING APPROACHES
(Mintzberg & Westley, 2001)
STRATEGIC
DECISION MAKING
ARTICLE
By: Eisenhardt, K. M., & Zbaracki, M. J. (1992).
RATIONALITY MODEL
The rational model of choice follows the everyday
assumption that human behavior has some
purpose. In research on decision making, this
translates into a common model of rational
action (March and Simon, 1958; Allison, 1971),
sometimes referred to as the synoptic or
comprehensive model of decision (e.g., Anderson,
1983; Nutt, 1976, 1984).
RATIONAL MODEL STAGES
These objectives
determine the Select the
value of the optimal
The actors
Actors enter possible
gather alternative.
decision consequences of
appropriate
situations with an action.
information, and
known
develop a set of
objectives
alternative
actions
Example: Simon's identification, development, and selection model (Simon, 1965) is a simplified
version of this rational model.
BOUNDED RATIONALITY
Bounded rationality is a concept proposed by Herbert A.
Simon, an American political scientist, in his 1957 book
“Models of Man.” It states that humans base their decisions
on their limited knowledge and cognitive capacity. It goes
against the common belief in economic models that people
are fully rational and capable of making logical decisions.
Bounded rationality differs from the actual concept of
rationality, which assumes humans have complete
knowledge of their alternatives and consequences. The
bounded rationality decision-making model states that
individuals choose satisfactory results instead of the best.
BOUNDED RATIONALITY
CONSTRUCTS
J. Bendor,2015
ARTICLE SOURCE
RATIONALITY
VS
BOUNDED RATIONALITY
Rational or boundedly rational is no longer very controversial.
Empirical research clearly supports:
The existence of cognitive limits to the rational model. Decision
makers satisfice instead of optimize, rarely engage in
comprehensive search, and discover their goals in the process of
searching.
Many decisions follow the basic phases of problem identification,
development and selection, but that they cycle through the
various stages, frequently repeating, often going deeper, and
always following different paths in fits and starts.
The complexity of the problem and the conflict among the
decision makers often influence the shape of the decision path.
POLITICAL MODEL
The application of the political model to strategic decision-making was a
reaction to the prevailing economic assumptions that organizations possess
a single, superordinate goal. As March wrote (1962: 663), The business
organization is properly viewed as a political system and that viewing the
firm as such a system both clarifies conventional economic theories of the
firm and (in conjunction with recent developments in theoretical languages)
suggests some ways of dealing with the classical problems in the theory of
political systems generally. While the boundedly rational model was a
reaction to cognitive assumptions about individuals, the political model was
a reaction to social assumptions about groups. In the political model, people
are individually rational, but not collectively so.
ARTICLE
SOURCE
ORGANIZATIONS AS POLITICAL SYSTEMS
OVERVIEW
The view that organizations are political systems (i.e., collectives of people with at
least partially conflicting goals) has been supported by several colorful case
studies (e.g., Allison, 1971; Bald- ridge, 1971; Pettigrew, 1973; Quinn, 1980;
Pettigrew, 1985; Eisenhardt and Bourgeois, 1989).
EXAMPLE
Baldridge's (1971) book, Power and Conflict in the University. The research chronicles several key decisions
taken at New York University (NYU) in the 1960s that occurred as NYU shifted from an open enrollment,
part-time school to a demanding, research-oriented university. The complex structure within NYU was
clearly consistent with the political view of the firm. On the one hand, the participants-faculty,
administrators, students, trustees, alumni- shared a common interest in the welfare of the university.
DECISION AS THE PREFERENCES OF THE POWERFUL
A second feature of the political model is the assertion that choice reflects the
preferences of powerful people. Here too the empirical evidence supports the
political perspective. For example the NYU research (Baldridge, 1971)
describes how the choices among competing options were ultimately a
reflection of the inequalities within the power structure of the university. The
weak Commerce and Education Schools lost to the powerful central
administration in a series of decisions that changed the NYU student body
from a less-qualified, part-time group into a full- time, high quality, residential
student body.
POLITICS
A third feature of the political model is the assertion that people at least
sometimes engage in politics. By politics, we mean those observable, but
often covert, actions by which people enhance their power to influence a
decision. Examples of politics include coalition formation, lobbying,
cooptation, withholding agendas, and control of agendas (Pettigrew,
1973; Pfeffer, 1981, 1992). Sometimes politics involve tactics of
information-i.e., manipulation and control of critical information channels.
Pettigrew's (1973) study of a British retailer demonstrated how one
manager, Kenny, restricted information flow to the board and vendors
POLITICS AND POWER
SUMMARY 1
Organizations are comprised of people with partially conflicting
preferences,
SUMMARY 2
Strategic decision making is ultimately political in the sense that
powerful people get what they want
SUMMARY 3
People engage in political tactics such as cooptation, coalition
formation, and use of information to enhance their power
Garbage Can Theory
First articulated by Cohen, March and Olsen (1972), the garbage can
model describes decision making in highly ambiguous settings called
organized anarchies. The ambiguity surfaces in three principal ways:
One is problematic preferences: the inconsistent and ill-defined

preferences that decision makers often possess. Decision makers are
as likely to discover their goals through action as they are to
understand them prior to choice.
Second, organized anarchies have unclear technology. People have

only a loose understanding of means and ends. Organizational
participants gain knowledge by trial-and-error learning, but without
clear understanding of underlying causes.
Third, organized anarchies are characterized by fluid participation.

Decision making participants come and go from the decision process,
with their involvement depending upon their energy, interest and
other demands on their time (Cohen et al., 1972). Therefore,
anticipating who will actually be involved in a decision is difficult.
ARTICLE
SOURCE
Garbage Can
(Summary)
To summarize, empirical research only modestly supports:
The central idea of the garbage can perspective that organization
anarchies exist. Similarly, the empirical research modestly confirms that
Decisions occur as a result of chance intersection among changing

problems, choice opportunities, solutions, and people (i.e., garbage can
model).
The model is more robust as time frames become longer, deadlines are
removed, and institutional forces are diminished.
Garbage Can
(STATEMENT)
Does the garbage can model describe actual decision
making or is it simply a labeling of the unexplained
variance of other, more powerful, descriptions of strategic
decision making? If the latter, it may more accurately be
described as an extreme form of bounded rationality.
ARTICLE CONCLUSION
1 POI NT 1
St r a t eg i c deci s i o n ma ki n g i s b e st de scri b e d a s
a combi na t i o n o f b o un d e d l y ra ti o n a l a n d
p ol i t i ca l i ns i g ht s .
2 POI NT 2
Bounded r a t i o n a l i t y sha pe s the co gn i ti v e
l i mi t s a nd t h e l o o p i n g o f stra te gi c de ci si o n
p r o ces s es
3 POI NT 3
T he p oli t i ca l p e r s p e ct i v e sha p e s the so ci a l
con t ext
Strategic decision-making has emerged as one of the most active areas of current
management research. As Eisenhardt and Zbaracki put it, despite the crucial role of
strategic decisions, the strategy process research has not departed significantly from
a stage of being based on ‘mature paradigms and incomplete assumptions’
(Eisenhardt and Zbaracki, 1992).
In particular, the need has been recognized for integrative research which explicitlty
considered the impact of context on strategic processes (Schneider and De Meyer,
1991). Papadakis, Lioukas, and Chambers held an empirical inverstigation of the
relationship between the process of strategic decision-making and management and
contexual factors.
Using prior research and empirical evidence, several significant generic dimensions
of the strategic decision-making processes were identified.
Dimensions of Strategic Decision Processes
Many researchers have referred to aspects of contextual influence on strategic
decision-making processes (Beach and Mitchell, 1978; Hitt and Tyler, 1991).
Schneider and De Mayer (1991), in attempt to provide an integrative model,

proposed the following categorization of factors which are expected to influence
strategic processes:
Manager’s individual Internal

characteristics and organizational Environmental Factors
group dynamics context
An integration of these contextual domains into a wider framework
looks for a promising avenue for the following perspectives
THE DECISION THE STRATEGIC OR MANAGEMENT

PERSPECTIVE CHOICE PERSPECTIVE
There’s a possibility that the same
internal and external stimulus may be It stresses that strategic choices
interpreted quite differently by have an endogenous behavioral
managers in different organization or component, and partly reflect the
even within the same organization n idiosyncrasies of decision-makers
(e.g., Dean and Sharfman, 1993a; (Child, 1972; Cyert and March, 1963)
Dutton, 1993; Haley and Stumph, 1989)
THE FIRM CHARACTERISTICS
THE ENVIRONMENTAL
AND RESOURCE AVAILABILITY
DETERMINISM PERSPECTIVE
PERSPECTIVE
Natural selection of species for
organizations: the environment This perspective emphasizes internal
determines who will survive, while top factors such as: internal systems,
managers are passive agents with company performance, size, corporate
minimal impact on corporate control (ownership).
development (Hannan and Freeman
(1977) and Aldrich (1979)). Can be linked to inertial perspective
(Romanelli and Tushman (1986) :
This view is in line with economic existing organizational arrangements,
theories in which decision outputs rather structures, systems, processes, and
than internal DMPs are relevant for the resources, though initially determined
explanation of a firm's behavior in a by management and environmental
competitive environment forces, in turn constrain future strategic
decision making.
RESEARCH RESULT OF
DECISION-MAKING PROCESSES CHARACTERISTICS
(DEPENDENT VARIABLES)
References
Kenneth R. Andrews (1971), 'The Concept of Corporate Strategy', in The Concept of

Corporate Strategy, Homewood, IL: Dow Jones-Irwin.
Eisenhardt, K. M., & Zbaracki, M. J. (1992). Strategic Decision Making. Strategic

Management Journal, 13, 17–37. http://www.jstor.org/stable/2486364
Mintzberg, H., Lampel, J., Quinn, J.B. & Ghoshal, S. (2003), The Strategy Process :
Concept, Contexts, Cases. Upper Saddle River, NJ: Prentice Hall.
Papadakis, V. M., Lioukas, S., & Chambers, D. (1998). Strategic Decision-Making

Processes: The Role of Management and Context. Strategic Management Journal, 19(2),
115–147. http://www.jstor.org/stable/3094060
Strategic Decision Making
Author(s): Kathleen M. Eisenhardt and Mark J. Zbaracki
Source: Strategic Management Journal , Winter, 1992, Vol. 13, Special Issue:
Fundamental Themes in Strategy Process Research (Winter, 1992), pp. 17-37
Published by: Wiley
Stable URL: https://www.jstor.org/stable/2486364
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Strategic Management Journal, Vol. 13, 17-37 (1992)
STRATEGIC DECISION MAKING

KATHLEEN M. EISENHARDT and MARK J. ZBARACKI
Department of Industrial Engineering and Engineering Management, Stanford
University, Stanford, California, U.S.A.
This article reviews the strategic decision making literature by focusing on the dominant
paradigms-i.e., rationality and bounded rationality, politics and power, and garbage can.
We review the theory and key empirical support, and identify emergent debates within each
paradigm. We conclude that strategic decision makers are boundedly rational, that power
wins battles of choice, and that chance matters. Further, we argue that these paradigms rest
on unrealistic assumptions and tired controversies which are no longer very controversial.
We conclude with a research agenda that emphasizes a more realistic view of strategic
decision makers and decision making, and greater attention to normative implications,
especially among profit-seeking firms in global contexts.
Change swept strategic management research musings of Simon to a plethora of ideas by a

during the past decade. Triggered by the work spectrum of authors. However, a quick exami-
of Miles and Snow (1978) and later Porter (1980, nation suggests that the character of the field
1985), strategic content research flourished. The resembles a 'crazy quilt' of perspectives. A more
next decade may bring a similar revolution to thorough scrutiny reveals a field based on mature
strategic process. As Rumelt, Schendel, and paradigms and incomplete assumptions.
Teece (1991: 22) write: 'Both theoretical and A primary purpose of this paper is to review
empirical research into the sources of advantage the literature on strategic decision making.
has begun to point to organizational capabilities, Following Mintzberg, Raisinghani, and Theoret
rather than product market positions or tactics, (1976: 246), we define a strategic decision as one
as the enduring source of advantage.' And, of which is 'important, in terms of the actions
course, strategic process research never really taken, the resources committed, or the precedents
lost favor among the Japanese and Europeans. set.' That is, we focus on those infrequent
Central among strategic process issues is decisions made by the top leaders of an organi-
strategic decision making. It is crucial because it zation that critically affect organizational health
involves those fundamental decisions which shape and survival. We review the major choice
the course of a firm. During the past 30 years, paradigms (i.e., rationality and bounded ration-
many researchers have recognized the centrality ality, politics and power, and garbage can). Our
of the topic by tackling issues in strategic and contribution is a synthesis of theory, key empirical
more generally, organizational decision making. support, and emergent debates.
Overall, research has progressed from the early A second purpose is to suggest an agenda for
future research. Here we propose bringing
strategic decision making closer to mainstream
Key words: Strategic decision making, bounded strategy by emphasizing normative implications,
rationality, politics, power, garbage can especially profit-making firms and international
0143-2095/92/100017-21$15.50
?) 1992 by John Wiley & Sons, Ltd.

152.118.24.31 on Wed, 13 Sep 2023 11:14:20 +00:00
18 K. M. Eisenhardt and M. J. Zbaracki
contexts. And, we propose creating more realistic human behavior. Later variations accepted the
views of strategic decision making by opening rational model, but rearranged the pieces to
up our conceptions of cognition and conflict. allow repetition and variety (e.g., Mintzberg et
Our contribution here is a research agenda which al., 1976; Nutt, 1984; Hickson et al., 1986). The
ties to the strategy field, centers on a few, key most recent incarnation transformed the rational
research areas, and is capable of breaking the vs. boundedly rational dichotomy into a con-
constraints of current paradigms. tinuum, probing whether (e.g., Fredrickson,
We conclude that much progress has been 1984; Fredrickson and Mitchell, 1984; Fredrick-
made in understanding strategic decision making. son and laquinto, 1989) and when (e.g., Dean
It is clear that people are rational, but only and Sharfman, 1992) decision making is rational
boundedly so, that power wins battles of choice, (Table 1).
and that chance affects the course of strategic
decision making. It is also clear that a synthesis
Cognitive limitations
of bounded rationality and political perspectives
provides a compelling description of strategic Several empirical studies reveal cognitive limi-
decision making. Yet, it is equally apparent that tations (e.g., Cyert and March, 1963; Carter,
these traditional paradigms rest on tired debates 1971; Anderson, 1983; Pinfield, 1986). The
about single goals and perfect rationality, and original work is by Cyert, March, and colleagues
on unrealistic assumptions about how people (Cyert and March, 1963). These authors pre-
think, behave, and feel. Thus, it is an opportune sented theory and case studies which demonstrate
time for path-breaking visions of strategic choice. that goals can be inconsistent across people and
time, search behavior is often local, and standard
operating procedures guide much of organi-
RATIONALITY AND BOUNDED zational behavior.
RATIONALITY While Cyert and March developed a global
critique, later authors focused on specific steps
In its most basic form, the rational model of of rational decision making. For example, in a
choice follows the everyday assumption that review of six top-level planning decisions, Carter
human behavior has some purpose. In research (1971) formulated a fine-grained view of search
on decision making, this translates into a common processes by segmenting them into two types.
model of rational action (March and Simon, Personnel-induced search occurs when strong
1958; Allison, 1971), sometimes referred to as executives with definite objectives in mind
the synoptic or comprehensive model of decision stimulate search, and opportunity-induced search
(e.g., Anderson, 1983; Nutt, 1976, 1984). Accord- occurs when firms engage in search when
ing to this model, actors enter decision situations unexpected opportunities arise.
with known objectives. These objectives deter- Allison (1971) challenged the rational model
mine the value of the possible consequences by showing how standard operating procedures
of an action. The actors gather appropriate applied to strategic decisions in government by
information, and develop a set of alternative using them to describe the behavior of the
actions. They then select the optimal alternative. Executive Committee of the National Security
For example, Simon's identification, develop- Council (ExCom) during the 1962 Cuban Missile
ment, and selection model (Simon, 1965) is a Crisis. Allison argued that the actions arising
simplified version of this rational model. from an organization yesterday best predict the
Typically, the research in the rational tradition actions today. He traced this stability to the
sets up this ideal as a 'straw man' in order to standard operating procedures within an organi-
develop variations on the model. The original zation. Thus, for example, the timing of the
debate involved the heroic nature of cognitive discovery of offensive missiles in Cuba reflected
assumptions (e.g., Simon, 1957; Lindblom, 1959; the standard operating procedures for data
Cyert and March, 1963). For example, Simon analysis by the relevant government agencies.
(1957) challenged the validity of the classic Anderson's (1983) review of ExCom decision
economic actor by rejecting the Hobbesian notion making during the Cuban Missile Crisis centers
of consistent, value-maximizing calculation in on goals and alternatives, captured in the 'decision

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Strategic Decision Making 19
Table 1. Summary of empirical research: Rationality and bounded rationality
Author(s) Method Sample Description Conclusions
Cyert and March, Computer N/A Boundedly rational Conflicting goals, local
(and simulation, case model rationality, satisficing,
colleagues), studies problemistic search,
1963 SOP's
Allison, 1971 Case study 1962 Cuban Decisions process Aspects of both are
Missile Crisis is rational and present
bureaucratic
Carter, 1971 Case studies Six top-level Varieties of Supports model, some
decisions in one bounded revisions
computer firm rationality
Mintzberg, Case studies 25 strategic Varieties of Phases of decision making

Raisinghani, decision decision in no order, conceptual
and Theoret, processes processes structure for decision
1976 process
Janis, 1982 Case studies 7 major Examples of poor 'Groupthink' is negative,

governmental and effective can be avoided
decisions decision
processes
Mintzberg and Case study Steinberg's grocery Changes in Planning and strategy
Waters, 1982 chain over 60 strategy over depend on
years time environment, size, &
structure
Anderson, 1983 Case study 1962 Cuban Empirical Sequential choice of

Missile Crisis description of alternatives; goal
decision process discovery; failure
avoidance
Fredrickson, 1984 Scenario-based 38 firms; stable Relationship Comprehensive processes

field studies environment between correlate positively
Fredrickson and 29 firms; unstable comprehensive with performance in
Mitchell, 1984 environment decision stable environments,
Fredrickson and 45 firms, both processes & negatively in unstable
laquinto, 1989 environments performance environments
Nutt, 1984 Case studies Decision processes Varieties of Managers don't follow
in 78 health decision normative process;
service firms processes using various decision
a normative processes; solution
decision process driven decisions
Fredrickson, 1985 Laboratory study 321 MBA Effect of problems Executives combine
students, 116 versus rational analysis with
upper-middle opportunities & intuition
level managers performance on
comprehensiveness
Hickson, Butler, Case studies 150 strategic Varieties of Multiple decision

Cray, Mallory, decisions in 30 decision processes depending
and Wilson firms processes upon type of decision
1986
Continued over

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Table 1. Continued
Isenberg, 1986 Laboratory study 12 general Analysis of Managers act sooner than
managers from decision process students, reason more
6 corporations used in solving and use experience
3 senior a business case
undergrads
Pinfield, 1986 Case study Canadian gov't Comparison of Structured processes

development of structured and useful for agreed upon
an 'Executive garbage can goals
Resourcing decision
Strategy' processes
Schweiger, Laboratory study 120 MBA students Comparison of DA and DI approaches

Sandberg and 120 rapidly devil's advocate yield better quality but
Ragan, 1986 advancing (DA), less satisfaction
Schweiger, Laboratory study middle dialectical
Sandberg and managers inquiry (DI)
Rechner, 1989 and consensus
Bourgeois and Case studies Four Strategic decision Successful strategies are
Eisenhardt, microcomputer making in high fast yet rational,
1988 firms velocity centralized yet
environments delegated & bold yet
safe
Eisenhardt, 1989 Case studies Eight Strategic decision Tactics rational in some
microcomputer making speed in ways but not in others
firms high velocity are fast and effective
environments
Langley, 1989 Case studies 3 organizations, Use of formal Formal analysis & social
27 issues analysis interaction are closely
related
Dean and Field study 57 strategic Use of rational Organizations use

Sharfman, 1992 decisions in 24 decision procedural rationality
companies processes in for little threat and
organizations understood issues
making by objection' model. The author observed rational model. Goals are unclear and shift over
that ExCom considered few alternative courses time. People often search for information and
of action simultaneously. Instead, participants alternatives haphazardly and opportunistically.
raised objections to a current alternative. Further, Analysis of alternatives may be limited and
in order to avoid high risk, decision makers often decisions often reflect the use of standard
selected alternatives that even they did not expect operating procedures rather than systematic
would solve the problem. Finally, instead of the analysis.
rational process of goal definition, followed by
alternative generation and choice, Anderson
Rearrangement and repetition
observed the nearly simultaneous discovery of
goals and choices through social processes. A more recent variation of the rational model
Taken as a group, these and other studies accepts the model, but rearranges its pieces to
indicate the limitations of each step of the allow repetition and variety in their order (e.g.,

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Mintzberg et al., 1976; Nutt, 1984; Hickson et Rationality vs. bounded rationality
al., 1986). This work recognizes that decisions
have unique patterns of solution. A third variation presents rationality and bounded
One example is the study by Mintzberg et al., rationality as a dichotomy or continuum (e.g.,
(1976) of 25 decision processes from which they Harrison and Phillips, 1991). Some of this
generated a model of the structure of apparently research takes a contingency slant. For example,
'unstructured' strategic decisions. Three basic Mintzberg and Waters (1982) noted how organi-
phases - the identification, development and zation size affected the rationality of strategic
selection phases of decision making - form the decision making. Dean and Sharfman (1992)
heart of the model. In the classic rational model examined rationality in a study of 57 strategic
of choice, these stages occur sequentially. In decisions in 24 firms. They found that threatening
Mintzberg et al's study, these phases have no environments, high uncertainty, and external
sequential relationship. Rather, within each control decreased rationality.
phase, decisions follow various routines: decision Often this research indicates how decision
recognition and diagnosis routines during the makers can move along the rationality vs.
identification phase, search and design routines bounded rationality continuum, typically by
during the development phase and screen, evalu- increasing conflict (e.g., Cosier, 1981; Janis,
ation-choice and authorization routines during 1982, 1989; Nutt, 1989; Schweiger, Sandberg,
the selection phase. The phases and their routines and Ragan, 1986; Schweiger, Sandberg, and
can come in any order and can repeat. The Rechner, 1989; Cosier and Schwenk, 1990). These
result is that steps in a rational strategic decision authors acknowledge that decision processes are
process actually shift, branch, cycle and recycle. often boundedly rational and so seek to improve
Another example is Nutt's (1984) study of the rationality, usually by using more information
decisions in health-related organizations. This and creating more diverse viewpoints. For exam-
study also indicates that the pieces of the rational ple, Janis (1982) studied a number of strategic
model are valid, but that they do not necessarily decision situations and uncovered a pattern of
follow a simple, causal sequence. The author behavior he called 'groupthink,' an excessive
found five types of decision processes, which tendency to seek concurrence. He prescribed
vary primarily in their approach to search. For several divergence-inducing antidotes to group-
example, in the historical process, people draw think such as creating a devil's advocate, introduc-
ideas from the practices of others in order to ing outside experts, and encouraging argument.
guarantee that the idea will work. The off-the- Similarly, Schweiger, Sandberg, and Ragan
shelf approach uses aggressive search to find (1986) compared the results from groups using
the best available technique while in appraisal dialectical inquiry, devil's advocacy, and consen-
processes, managers use the scientific method to sus approaches to decision making. Like Janis,
evaluate the effectiveness of ideas with unknown they found that normative methods for increasing
value. conflict succeed. Both dialectical inquiry and
More recently, the Bradford group (e.g., devil's advocate groups produced better rec-
Hickson et al., 1986) examined 150 widely varying ommendations and assumptions than did consen-
strategic decisions in the U.K. They determined sus groups. However, the improved performance
that the linearity of the decision process is highly came at the expense of group satisfaction and
variable. The amount of cycling and the shape acceptance of the decision.
of the process depends on how complex and Still other research tackles the normative
political the decision is. Simple matters with little question of where is the optimal point on the
debate follow smooth and often constricted continuum (e.g., Dess, 1987; Priem, 1990). The
decision making processes. In contrast, complex most prevalent argument is that more complex
and contentious matters had more complicated or turbulent environments require less rationality
processes with delays and recycling. Thus, like (e.g., Fredrickson, 1984; Miller, 1987). A good
the previous studies this study suggests that example is a series of studies in the paint and
decision processes vary depending upon decision forest products industries by Fredrickson and
characteristics as executives apparently bypass or colleagues (Fredrickson and Mitchell, 1984; Fred-
revisit different aspects of the choice over time. rickson, 1984; Fredrickson and laquinto, 1989).

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These studies demonstrated the predicted nega- rationality in complex ways, rather than blindly
tive relationship between the rationality or as and uniformly being more or less rational.
they term it, 'comprehensiveness,' of the decision
process - how exhaustive and inclusive the
Summary
decision process is - and firm performance in
an unstable environment and a predicted positive Overall, the original debate, which shaped the
relationship in a stable environment. The most paradigm, over whether decision makers are
recent study in this series (Fredrickson and rational or boundedly rational is no longer very
laquinto, 1989) demonstrated the strength and controversial. Empirical research clearly supports
stability of this relationship over time. (1) the existence of cognitive limits to the rational
model. Decision makers satisfice instead of
optimize, rarely engage in comprehensive search,
An alternate view
and discover their goals in the process of
Taken as a group, these studies assume that searching. The empirical research also suggests
rationality and bounded rationality anchor ends that (2) many decisions follow the basic phases
of a continuum. However, new threads of of problem identification, development and selec-
research break from this dominant view. This tion, but that they cycle through the various
work argues that rationality is multidimensional, stages, frequently repeating, often going deeper,
and so strategic decision makers are rational in and always following different paths in fits and
some ways, but not others. And, it argues that starts. Furthermore, (3) the complexity of the
such behaviors are effective, particularly in fast- problem and the conflict among the decision
paced environments. makers often influence the shape of the decision
One example is Isenberg's (1986) comparison path.
of thinking protocols of general managers and On the other hand, there is no single theory of
undergraduate students in a problem solving case. bounded rationality, but rather many variations.
Isenberg found that managers made contingency There is 'decision by objection' (Anderson, 1983),
plans, a rational strategy. But, they also acted 'root vs. branch' (Lindblom, 1959), 'constricted,
quickly on incomplete information, a bounded sporadic, flow' (Hickson et al., 1986) and so
rationality strategy. Fredrickson also found that forth. This is the fruit of a paradigm developed
executives engaged in some, but not all, aspects in reaction to the 'straw man' of purely rational
of rational choice. As Fredrickson wrote (1985: choice.
821): 'the executives' approaches were simul- Secondly, a heuristic perspective, in which
taneously rational and intuitive.' In a study decision makers are rational in some ways, but
of strategic choice in 8 microcomputer firms, not others is emerging. This nascent perspective
Eisenhardt (1989) showed that effective decision runs counter to the traditional view of rationality
makers developed many alternatives, but only as a monolithic construct and suggests a debate
thinly analyzed them. They also sought infor- between this monolithic conception and a more
mation from many sources, but focused on a multidimensional approach to how strategic
few. In other words, these executives were decision makers actually think.
rational in some ways, but not others. Moreover,
Eisenhardt (1989) also found that these behaviors
were effective in fast-paced environments. In POLITICS AND POWER
contrast, 'noncomprehensive describes the way
that slow (strategic decision making) teams The roots of the political perspective on strategic
accelerate' (Eisenhardt, 1989: 565). decision making lie in the political science
Thus, this research calls into question the long literature of the 1950s. Various authors of that
standing view of a rationality vs. bounded era developed a view of decision making in
rationality continuum. Rather, it suggests a set government which emphasized the conflictual
of decision making tactics or heuristics which are nature of the legislative process. That view held
rational in some ways, but not others and which that decisions were the result of a process in
are effective in fast-paced, uncertain settings. which decision makers have different goals,
Decision makers are seen as adjusting their they come together through coalitions, and the

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preferences of the most powerful triumph. This leagues in the 1970s, that demonstrate the power
paradigm was obviously well-suited to the legisla- of the political model. We turn now to examine
tive branch of government where there are how consistent the empirical research is with
competing interests, sharply defined coalitions, theory.
and clear winners.
Similar to the boundedly rational model, the
Organizations as political systems
application of the political model to strategic
decision making was a reaction to the prevailing The view that organizations are political systems
economic assumptions that organizations possess (i.e., collectives of people with at least partially
a single, superordinate goal. As March wrote conflicting goals) has been supported by several
(1962: 663), 'I will argue that the business colorful case studies (e.g., Allison, 1971; Bald-
organization is properly viewed as a political ridge, 1971; Pettigrew, 1973; Quinn, 1980;
system and that viewing the firm as such a system Pettigrew, 1985; Eisenhardt and Bourgeois,
both clarifies conventional economic theories 1989). Perhaps the best example is Baldridge's
of the firm and (in conjunction with recent (1971) book, Power and Conflict in the University.
developments in theoretical languages) suggests The research chronicles several key decisions
some ways of dealing with the classical problems taken at New York University (NYU) in the
in the theory of political systems generally.' 1960s that occurred as NYU shifted from an open
While the boundedly rational model was a enrollment, part-time school to a demanding,
reaction to cognitive assumptions about individ- research-oriented university.
uals, the political model was a reaction to social The complex structure within NYU was clearly
assumptions about groups. In the political model, consistent with the political view of the firm.
people are individually rational, but not collec- On the one hand, the participants-faculty,
tively so. administrators, students, trustees, alumni-
The key assumption is that organizations are shared a common interest in the welfare of the
coalitions of people with competing interests. university. On the other hand, their interests
While these individuals may share some goals obviously also diverged. As Baldridge (1971:
such as the welfare of the firm, they also have 107) described, NYU was a 'pluralistic system,
conflicts. For example, some people in a business often fractured by conflicts along lines of disci-
firm may favor growth while others may favor plines, faculty subgroups, student subcultures,
profitability or public service. These conflicting splits between administrators and faculties, and
preferences arise from different bets on the shape rifts between professional schools.'
of the future, biases induced by position within Several examples bring to life the conflicts
the organization, and clashes in personal among the groups. A decision to change the
ambitions and interests (Allison, 1971). student body to a more qualified, full-time group
The heart of the political perspective is the pitted the Commerce and Education Schools and
process by which conflict is resolved among some faculty against the central administration,
individuals with competing preferences. Simply the trustees, the Graduate School of Business,
put, decisions follow the desires and subsequent and more research-minded faculty. A proposed
choices of the most powerful people (March, tuition increase coaligned students and some
1962; Hinings et al., 1974; Salancik and Pfeffer, faculty against the administration. A series
1974). Further, decision makers often attempt to of organizational restructurings created conflict
change the power structure by engaging in among deans, department heads and the adminis-
political tactics such as coalition formation, tration. In each case, the conflict between these
cooptation, strategic use of information, and the participants was not simply a misunderstanding,
employment of outside experts. but a fundamental difference in self-interest.
There are two streams of research within the Another example is Pettigrew's (1973) study
political perspective (Table 2). One consists of computer adoption within a British retailer.
of vivid case studies illustrating the political The author sketched the firm as a patently
perspective in a variety of contexts. The other political system. He focused on three managers
contains a series of deductive studies, many of (Kenny, O'Reilly, and Turner) and their selection
which were conducted by Pfeffer and his col- of computer vendors for automating the firm.

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Table 2. Summary of empirical research: Power and politics
Allison, 1971 Case study 1962 Cuban Decision process Outcome a resultant of
Missile Crisis as a bargaining bargaining among
game players
Baldridge, 1971 Case study New York Policy formation Conflicting interests,
University at NYU as a shifting power, cycles
political process of conflicts, power wins
Sapolsky, 1972 Case study Polaris missile Development of Success of the Polaris
program the Polaris program depended
missile system upon skill in politics
Pettigrew, 1973 Case study Major British Decision process Decision process a
retailer for purchasing a political struggle;
computer control over
system communication
channels critical to
outcome
Pfeffer and Field studies University of Relationship Resources received

Salancik, 1974 Illinois between correlate with
department department department power;
Salancik and power and powerful departments
Pfeffer, 1974 resource get more of scarce
allocation resources
Hills and Field study University of Allocations of Power affects resource

Mahoney, 1978 Minnesota budgets allocations more when
departments resources are scarce
Borum, 1980 Case study Hospital surgical Role of power in Power balance is
unit organizational important
development
Gandz and Field survey 428 managers Managers' Politics pervasive in

Murray, 1980 perceptions of organizations;
politics; sources managers are
of politics ambivalent about
politics
Pfeffer andMoore, Field study Departments at Effects on Higher paradigm
1980 two University department departments get more
of California resource funds; stronger
campuses allocation association between
department power and
resources if resources
are scarce
Quinn, 1980 Case studies Nine major Nature of strategic Firm is a political system;
corporations decision managers develop a
processes broad strategy but
implement it
opportunistically
Continued over

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Table 2. Continued
Eisenhardt and Case studies Eight Politics of strategic Politics more prevalent
Bourgeois, 1988 microcomputer decision making when power imbalances
firms in high velocity exist; politics stable;
environments effective firms avoid
politics
Eisenhardt and Case studies Eight Conflict in Conflict arises from roles,
Bourgeois, 1992 microcomputer strategic interactions & tactics;
firms decision making mixed performance
effects
Dean and Field study 25 firms in 16 Study of conditions Differing interests lead to
Sharfman, 1992 industries leading to political behavior; trust
political and importance of
behavior in decision mitigate
strategic politics; theory
decision making exaggerates level of
politics
Consistent with the political model, each manager organization as a political system of conflicting
had well-defined, yet conflicting, preferences preferences has wide support from studies in
regarding computer vendors. Kenny favored government, universities, large corporations, and
the current vendor, Newton, and one specific high technology firms.
technical approach. In contrast, Turner and
O'Reilly favored different vendors and technical
Decision as the preferences of the powerful
approaches from each other and from Kenny.
These preferences arise not only from genuine A second feature of the political model is the
disagreements about technology and the quality assertion that choice reflects the preferences of
of the different vendors, but also from differences powerful people. Here too the empirical evidence
in the managers' positions within the firm and supports the political perspective. For example
their perceptions of self-interest. the NYU research (Baldridge, 1971) describes
There are further examples of case studies of how the choices among competing options were
politics in decision making. Allison's (1971) study ultimately a reflection of the inequalities within
of the Cuban missile crisis reveals that deep the power structure of the university. The weak
divisions existed among President Kennedy's Commerce and Education Schools lost to the
advisors regarding an appropriate reaction to the powerful central administration in a series of
deployment of Russian missiles in Cuba based decisions that changed the NYU student body
on different assumptions and their place in the from a less-qualified, part-time group into a full-
hierarchy. Quinn's (1980) study of strategic time, high quality, residential student body.
decision making processes within nine large, As one Commerce faculty member described
international corporations, including Chrysler (Baldridge, 1971: 53), 'A real power struggle
and General Motors describes these firms as developed, but in this battle the administration
political systems. As Quinn outlined the firms, had most of the weapons.'
the organizations were comprised of constantly Some of the best evidence that powerful people
changing groups of people with diverse talents triumph comes from deductive studies. The
and interests. In their study of U.S. microcom- original study (Pfeffer and Salancik, 1974) exam-
puter firms, Eisenhardt and Bourgeois (1988) ined budgeting at a major university by juxtapos-
noted that conflict among executives regarding ing rational and political models of choice. The
appropriate action was common. Thus, the authors found that the power of university

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departments influenced their share of the budget both gain power directly and attempt to make
and did so more than rational criteria such as themselves appear less political in the process.
student units taught. This capability of powerful Although Pfeffer's work is not an empirical
individuals and groups to get what they want study, his collection of anecdotes and accounts
was then replicated in other studies of universities from popular business journals added to more
and charitable funding agencies which also systematic research in order to illustrate the use
contrasted predictions from political and rational of politics.
models (e.g., Pfeffer and Moore, 1980; Hills and
Mahoney, 1978).
An alternate view
Taken together, these studies and others indicate

Politics
that politics are common in strategic choice.
A third feature of the political model is the However, underneath this consistency lies a deep
assertion that people at least sometimes engage division emerging within the literature. The
in politics. By politics, we mean those observable, traditional view is that politics arise from conflict
but often covert, actions by which people enhance (e.g., Pfeffer, 1981; March, 1962). That is, people
their power to influence a decision. Examples of with conflicting preferences engage in politics in
politics include coalition formation, lobbying, order to gain a favorable decision. Politics are
cooptation, withholding agendas, and control of assumed to be fluid (e.g., Gamson, 1961; March,
agendas (Pettigrew, 1973; Pfeffer, 1981, 1992). 1962; Stevenson, Pearce, and Porter, 1985).
Sometimes politics involve tactics of Decision makers easily move from one alliance
information-i.e., manipulation and control of to another as positions and decisions shift. They
critical information channels. Pettigrew's (1973) vary their political tactics like teenagers change
study of a British retailer demonstrated how one radio stations. And, ultimately, the traditional
manager, Kenny, restricted information flow to view is that politics are essential to organizations
the board and vendors. Kenny effectively blocked (e.g., Quinn, 1980; Pfeffer, 1981, 1992). Creating
the access of other managers to board members effective change and adaptation within organiza-
and slanted information from vendors to favor tions depends upon effective use of politics.
his preferred course of action. Pfeffer (1992) cites studies from government
Sometimes politics emphasize the tactics of (Sapolsky, 1972), big business (Pascale, 1984)
timing and opportunism. Quinn's (1980) study and nonprofits (Borum, 1980) to support this
of executive choice indicated that effective view. For example, Pfeffer quoted Sapolsky's
managers used such politics, which he termed (1972) study of the Polaris submarine develop-
'logical incrementalism.' Senior executives ment as follows: 'The success of the Polaris
developed a broad strategy of what they wished program depended upon the ability of its pro-
to accomplish, but implemented that strategy in ponents to promote and protect the Polaris.
a series of piecemeal, opportunistic decisions Competitors had to be eliminated; reviewing
along 'corridors of indifference.' This selective agencies had to be outmaneuvered; congressmen,
approach allows executives to build a power base admirals, newspapermen, and academicians had
for their ideas, to accelerate or delay as necessary, to be coopted. Politics is a system requirement'.
and to be flexible as the need to change arises However, a contradictory view is emerging.
(Quinn, 1980). Politics are triggered by power imbalances.
Sometimes the sheer variety of tactics is Frustrated executives turn to politics as a last
evident. In the Eisenhardt and Bourgeois (1988) resort in autocratic and power-vacuum situations.
study of politics in microcomputer firms, execu- For example, autocratic CEOs created an atmos-
tives used many political tactics such as coalition phere of frustration and mistrust in which
formation, withholding information, and the use subordinates came to regard politics as their
of expert consultants to gain advantage over last resort to getting their views considered
others. (Eisenhardt and Bourgeois, 1988). Politics are
The most comprehensive treatments of politics static. Empirical evidence suggests that decision
are Pfeffer's (1981, 1992) discussions of a wide makers rely on the same allies and the same
variety of political tactics by which people politics time after time (e.g., Pettigrew, 1973).

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In their study of microcomputer computer firms, organized anarchies. The model was largely a
Eisenhardt and Bourgeois (1988: 754) observe: reaction to rational and political models of choice
'They (executives) routinely seek out alliances which Cohen and colleagues believed lacked
with the same people. When usual allies disagree sufficient sensitivity to decision making in a
on an issue, they generally do not seek out more complex, unstable, ambiguous world.
favorably disposed executives. Rather, they either Central to the garbage can perspective are
drop the issue or pursue their interests alone.' organizations termed 'organized anarchies,'
Finally, politics are seen as ineffective. Many organizations beset by extreme ambiguity (Cohen
people dislike politics, finding them inefficient, et al. 1972). The ambiguity surfaces in three
unpleasant, and unnecessary (e.g., Gandz and principal ways. One is problematic preferences:
Murray, 1980; Sharfman and Dean, 1992). As the inconsistent and ill-defined preferences that
one executive described, 'Lobbying isn't a good decision makers often possess. As the authors
use of time' (Eisenhardt and Bourgeois, 1988; noted, decision makers are as likely to discover
750). These authors concluded that politics creates their goals through action as they are to
animosity, wastes time, disrupts information understand them prior to choice. Second,
channels, and ultimately leads to poor perform- organized anarchies have unclear technology.
ance. Other research (e.g., Sharfman and Dean, People have only a loose understanding of
1992) suggests that the pervasiveness of politics means and ends. Organizational participants
has been exaggerated. Traditional theorists have gain knowledge by trial-and-error learning, but
underestimated the degree to which executives without clear understanding of underlying causes.
will put aside parochial interests for the good of Third, organized anarchies are characterized by
the firm. fluid participation. Decision making participants
come and go from the decision process, with
their involvement depending upon their energy,
Summary
interest and other demands on their time (Cohen
In summary, most scholars accept the central ideas et al., 1972). Therefore, anticipating who will
of the political perspective: that (1) organizations actually be involved in a decision is difficult.
are comprised of people with partially conflicting The garbage can model describes the accidental
preferences, (2) strategic decision making is or random confluence of four streams: (1) choice
ultimately political in the sense that powerful opportunities-occasions which call for a
people get what they want, and (3) people decision, (2) solutions-answers looking for
engage in political tactics such as cooptation, problems, (3) participants-people with busy
coalition formation, and use of information to schedules who might pay attention, and
enhance their power. These observations fit both (4) problems-concerns of people within and
the published research and most people's day- outside the organization. Thus, decision making
to-day experience within organizations. And occurs in a stochastic meeting of choices looking
these central ideas form a much more coherent for problems, problems looking for choices,
theory than do those of bounded rationality. solutions looking for problems to answer, and
Thus, the original debate over whether organiza- decision makers looking for something to decide.
tions have single or multiple goals is no longer In comparison to political and rational models,
very controversial. However, an emerging debate the garbage can model calls attention to the
within the paradigm is whether politics are a importance of chance. What gets decided depends
positive, conflict-driven phenomenon or a power- very strongly on timing and luck. Moreover,
driven process signaling dysfunctional decision decisions themselves have a fuzzy character.
making. They lack the clear beginning and end points of
rational and political models. Garbage can
participants wander in and out of the decision.
GARBAGE CAN Their preferences differ as well. The sharply-
honed goals assumed by the political model and
First articulated by Cohen, March and Olsen even the more vague ones of the boundedly
(1972), the garbage can model describes decision rational perspective are missing as individuals
making in highly ambiguous settings called are not sure about what they want and change

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their minds often anyway. Decisions are not ophy of the school. As candidates turned the
the result of analysis by boundedly rational school down, the criteria shifted to ones which
individuals or the power of a coalition, but rather could be met by the more realistic pool of
are a random confluence of events. candidates.
Research within the garbage can perspective Olsen (1976) also described fluid participation,
follows three streams (Table 3). First, there are another characteristic feature of organized
studies (e.g., Padgett, 1980; Carley, 1986; Masuch anarchies. Many people were engaged in the
and LaPotin, 1989) which follow the simulation selection process, but in a part-time fashion.
tradition of the original statement of the model. Further, he argued that the key decision makers
For example, Anderson and Fischer (1986) switched over time from the faculty, to the dean
develop a more fine grained model of a garbage and a few close associates, and finally to the
can process, achieving similar results to the vice chancellor as the school's problems in
original simulation (Cohen et al., 1972). More attracting candidates mounted.
typically, these studies introduce variations on
the organized anarchy themes. For example,
Decision as a random confluence of streams
Padgett (1980) developed different assumptions
about which decision makers can influence the The heart of the garbage can model is the
decision and then showed the implications of premise that decisions are the result of a random
that change. confluence of people, problems, solutions, and
The simulation tradition has generated some choice opportunities. Again, some of the empiri-
provocative ideas. However, field research has cal evidence is convincing. For example, Rommet-
not kept pace. Instead of probing the simulation veit (1976) put together a chart of changing
results, most field researchers have focused on participants, problems, solutions, and choice
description. Hence, the second stream of research opportunities for an approximately 7-year
uses case studies (e.g., Kreiner, 1976; Weiner, decision to locate a medical school in Tromso,
1976; Olsen, 1976) to demonstrate the descriptive Norway. Over the course of the decision,
accuracy of the garbage can model, perhaps problems such as how to improve the local
adding nuances such as deadlines. These case region, reform medical education, and build a
studies confirm elements of the perspective, but regional hospital arose. Similarly, solutions
also suggest an alternative, less random model. shifted from building a university in Tromso, to
We now turn to this evidence. adding an extension of other universities, shifting
clinical work to Trondheim and so forth.
Several case studies amplify the garbage can
Organizations as anarchies
model. One set of results concerns deadlines.
Empirical evidence suggests that some organiza- Decision making processes tend to become less
tions can be accurately characterized as organized like a garbage can as deadlines are imposed. For
anarchies (e.g., Olsen, 1976; Kreiner, 1976; example, Weiner (1976) explored the impact of
Levitt and Nass, 1989). The evidence is drawn deadlines on the garbage can process to integrate
primarily from government and education the San Francisco school district. Deadlines
examples (March and Olsen, 1976), with more forced the 'ejection' of extraneous garbage from
recent efforts applying the garbage can model to the can and a focusing on the remaining issues.
military organizations (March and Weissinger- The number of participants decreased. But these
Baylon, 1986). fewer participants became more knowledgeable
Olsen's (1976) study of the selection of a new and their participation was more frequent. In
dean at a U.S. university provides a good addition, problems and solutions became clearly
illustration. Olsen reported that the preferences intertwined.
of the various decision makers were 'multiple, Related empirical results concern time perspec-
inconsistent, ill-defined, and changing.' At the tives. A number of authors (e.g., Kreiner, 1976;
outset, most participants desired a new dean Olsen, 1976; Rommetveit, 1976) have observed
who was young. They also preferred a person that a longer time perspective improves the fit
who was well-trained in mathematics, and a with the garbage can model, whereas a short
serious academic who could support the philos- time perspective is better captured by rational

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Table 3. Summary of selected research: Garbage can model
Cohen, March and Computer N/A Introduces garbage Decision making as a

Olsen, 1972 simulation can model of combination of
decision making problems, solutions,
in organized people and
anarchies opportunities
Kreiner, 1976 Case study Danish Example of a Description of garbage

experimental garbage can can decision making
free school process
Olsen, 1976 Case study Major American Selection of a dean Evidence supports the
public university as rational garbage can model
conflict &
garbage can
Rommetveit, 1976 Case study Norway Decision to locate Evidence supports the
third medical garbage can model
school in
Norway
Weiner, 1976 Case study San Francisco Decision process Evidence supports garbage
Unified School for can; consequences of
District desegregating deadlines
elementary
schools
Padgett, 1980 Mathematical N/A Stochastic garbage Implications of ambiguity;

model can model for managerial implications
bureaucracy
Anderson and Monte Carlo N/A Develops a Monte Results consistent with the
Fischer, 1986 Simulation Carlo model of garbage can
variation of
garbage can
Carley, 1986 Computer N/A Simulation Measures of efficiency

simulation measuring the possible
efficiency of
garbage can &
structured
processes
March and Case studies Military Applications of Military does not fit pure
Weissinger- organizations garbage can to garbage can models;
Baylon, 1986 military garbage can needs
structure to
Pinfield, 1986 Case study Canadian Federal Comparison of Both models help
Bureaucracy structured & understanding;
garbage can decisions not as
models random as garbage can
predicts
Continued over

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Table 3. Continued
Magjuka, 1988 Field study 28 schools in 2 Comparison of Descriptive validity for

Illinois school garbage can & garbage can;
districts structural participation shows
autonomy structural stability
Levitt and Nass, Cases Textbook Institutional & Descriptive validity for
1989 study/content publishing garbage can the garbage can;
analysis industry processes institutional
mechanisms affect
decisions
Masuch and Computer N/A Model of Disorderly decisions, but

LaPotin, 1989 simulation ambiguous due to commitment
choice under and cognitive
conditions of limitations
structure
and political models of choice. Apparently, as could participate in decision making, a core
time progresses, the scope of decisions increases, group of six people dominated choice processes.
the participants become more varied, and the Moreover, they faced a predictable group of
number of solutions becomes larger. opponents.
Taken together, the above research supports Some of the results for decision making as a
the existence of organized anarchies and the random confluence of streams are also modest.
garbage can decision making process (i.e., ran- For example, in Kreiner's (1976) study of decision
dom confluence of independent streams). How- making within an experimental free-school, the
ever, a closer look at this and other work suggests story of the decision begins with the observation
that the support is less than robust. that two teachers in the third grade could not
get along with one another and proceeds from
there. At the end, the reader is told that the
An alternative view
story exhibits a garbage can choice process, but
A good illustration is the empirical support for without any real conceptual tie between the story
problematic preferences. For example, in the and the model. Kreiner (1976: 170) simply
Olsen (1976) study of dean selection which is concludes: 'We have described decision making
cited above, the importance, if not ranking, of in a standard garbage can situation.'
criteria such as philosophical kinship to the school Another approach in the case studies has been
and academic leadership remained throughout the to assert that, since small perturbations in
decision process. Thus, while there was some circumstances could have dramatically changed
variation and ambiguity about what people the outcome of choices, the garbage can model
wanted in a dean, there were common themes must be accurate. For example, Olsen (1976)
throughout the choice process. Similarly, Krei- claims that the garbage can model provides a
ner's (1976) study of decision making in a Danish superior explanation to rational and political
free-school indicates that certain values such as explanations of decision making because only
Marxism and children's rights for self-determi- the garbage can model can support the existence
nation were relevant throughout the decision of multiple outcomes that could have happened
process. under slightly different circumstances. However,
Participation is not always so random either. such a backhanded argument seems better able
Again using Kreiner's (1976) study of a Danish to refute other theories than to confirm the
free-school, although all parents and teachers garbage can.

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Comparative research that patterns of participation are purposive,

rational, and predictable.'
More recently, a third stream of research
on garbage can models (e.g., Pinfield, 1986;
Summary
Magjuka, 1988; and Levitt and Nass, 1989) has
compared the garbage can model with other To summarize, empirical research only modestly
perspectives. These studies partially affirm the supports (1) the central idea of the garbage can
descriptive accuracy of the garbage can model, perspective that organization anarchies exist.
but then show how alternative perspectives Similarly, the empirical research modestly con-
strongly challenge the model. firms that (2) decisions occur as a result of
For example, Levitt and Nass (1989) found chance intersection among changing problems,
evidence for the existence of organized anarchies choice opportunities, solutions, and people (i.e.,
in their study of textbook publishing. But, once garbage can model). Finally, (3) the model is
the research went beyond an individual case more robust as time frames become longer,
study description, other mechanisms imposed deadlines are removed, and institutional forces
more order than the garbage can model allows. are diminished.
For example, the authors indicated that the Overall, the empirical support underlying
institutional factors constrain or 'put a lid on' organized anarchies and the garbage can model,
the garbage can. which is often single case studies in book chapters,
Similarly, Pinfield (1986) studied the decision has modest methodological validity and is surpris-
to develop a human resource strategy within the ingly soft. Thus, a central debate emerges. Does
Canadian government. While Pinfield found the garbage can model describe actual decision
some support for a garbage can interpretation, making or is it simply a labeling of the unexplained
he also found that participation was not randomly variance of other, more powerful, descriptions of
fluid, but rather was a consequence of institutional strategic decision making? If the latter, it may
roles, politics, and the phase of the decision more accurately be described as an extreme form
process. Thus, participation was somewhat pre- of bounded rationality.
dictable. He also observed that streams of Finally, a synthesis of the empirical support
problems, people, choice opportunities and solu- for the three traditional paradigms suggests that
tions were not independent, but rather linked strategic decision making is best described as a
together by the issue at hand. Further, individuals combination of boundedly rational and political
attempted (often successfully) to manage choice insights. Bounded rationality shapes the cognitive
opportunities and the participation of others in limits and the looping of strategic decision
the process (Pinfield, 1986). processes, and the political perspective shapes
Perhaps the strongest critique comes in another the social context. While useful, the garbage can
study of participation. Magjuka (1988) extensively perspective is less empirically robust than these
studied participation in public school curriculum other perspectives.
reform over several years using two school
systems, several hundred teachers, and multiple
levels of participation at the school and district TOWARDS A NEW RESEARCH
levels. This author found that the garbage can AGENDA
was supported at the individual level. That is,
individual teachers did come and go at random The previous sections look to the past in
in the process of curriculum reform. However, describing the three major strategic decision
overall patterns of participation were clearly perspectives (Table 4). These paradigms offer
predictable from psychological and demographic continuing research opportunities. The emerging
variables as well as from position in the social debates surrounding them-i.e., whether
network. The author concludes (Magjuka, 1988: bounded rationality is a monolithic construct or
256) that the results suggest an interpretation set of heuristics, whether politics are effective or
'that does not support the Garbage Can or is in dysfunctional, and whether the garbage can
any sense congenial to the underlying thrust of model is relevant at all-are particularly useful
the Garbage Can theory. The results indicate avenues for research.

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Table 4. Comparison of strategic decision making perspectives
Concept Rationality and bounded Politics and power Garbage can models
rationality
Key contribution Breakdown of perfect Breakdown of consistent Temporal logic rather than
rationality organizational goals causal logic
Organization Collection of people pur- Coalition of people with Organized anarchy

suing common direction competing interests
Participation Depends upon decision Depends upon interests, Fluid: depends on load &
needs power structure
Cognition Plodder Superhero Not applicable
Search and analysis Local, to find a solution To justify view, to win Not applicable
Goals Reasonably consistent or Conflicting, multiple Ambiguous, shifting

sequential attention
Conflict Positive but no attention High, stimulates 'game' Not applicable

to resolution of politics
Choice processes Intendedly rational with Conflict of interests Random collisions of

cognitive limits & loops dominated by powerful problems, solutions,
coalitions participants, &
opportunities
Emphasis Problem solving Resolving conflict Problem wandering
New debates Rationality as monolithic Politics as effective vs. Garbage can as valid
construct vs. set of ineffective description vs. labeling of
heuristics unexplained variance
However, in this section, we sketch a bolder research. We seek an agenda in which empirical
agenda for strategic decision making research. findings could transcend traditional perspectives
The agenda is shaped by three criteria. We to new, more realistic views.
wanted an agenda which would tie strategic Finally, we also wanted an agenda that builds
decision making research more closely to main- on past research. While current paradigms have
stream strategy concerns. Given its emphasis on shortcomings, they also have important insights.
nonprofit organizations and descriptive, rather Further, while many paths are possible, the
than normative, results, the extant research often emerging debates within those paradigms, which
seems peripheral to strategy issues. we described earlier, are excellent launching
At the same time, we also wanted an agenda pads from which to begin a new agenda.
that would break the shackles of current para-
digms. In our view, the classic debates about
Cognition
single organizational goals and perfect rationality
which shape the current perspectives are not First on the agenda is cognition. The rational
very controversial any more. Most scholars perspective has focused on incremental problem
believe that people are boundedly rational, that solving as its approach to thinking. While this
decision making is essentially political, and made sense given the interest in refuting the
that chance matters. Yet, these classic debates myth of classic 'economic man,' it seems likely
constrain the realism of strategic decision that strategic decision makers are more than the

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myopic plodders of this perspective. Offering of business and is linked to firm success. Where
caricatures of cognition, political and garbage insight involves quantum shifts in understanding,
can perspectives are even less realistic. At one intuition refers to more incremental adaptations
extreme, the garbage can ignores the cognitive based on deep, intimate knowledge of the
capability of decision makers. At the other situation. As Eisenhardt (1989: 555) writes,
extreme, the political model assumes that people 'executives who attend to real-time information
are cognitive superheroes who integrate the are actually developing their intuition. Aided by
desires of all participants and calculate compre- intuition, they can react quickly and accurately
hensive political strategy to further their clearly to changing stimuli.' Yet, these studies are only
understood aims. Neither resonates with reality. rough beginnings that indicate the need for more.
One way to achieve a more realistic view of Future research could profitably examine how
cognition is to study heuristics of strategic choice. intuition develops, how intuition can be separated
As described earlier, previous research suggests from superstitious learning, and how intuition
that heuristics are important, especially for senior reinforces and relates to insight and heuristics.
managers (e.g., Isenberg, 1986; Fredrickson,
1985; Eisenhardt, 1989) because they provide a
Normative implications
more realistic, multidimensional view of ration-
ality. For example, strategic decision makers Second on our agenda is normative research.
develop many alternatives, but analyze them Traditional research has primarily been descrip-
superficially (Eisenhardt, 1989). Although tive (e.g., Baldridge, 1971; March and Olsen,
psychological research often is descriptive (e.g., 1976; Hickson et al., 1986). This made sense in
Nisbett and Ross, 1980), some research examines the context of the old debates. Indeed, these
the effectiveness of heuristics as well (e.g., debates sought to challenge the Hobbesian
Payne, Bettman, and Johnson, 1988). A next rationality of the classic economic model and so
step on the agenda is to blend this psychological the traditional agenda appropriately developed
research with strategic decision making by explor- more descriptively accurate models. So, for
ing which heuristics are most relevant to strategic example, bounded rationality sought to show
decision makers, how they work, why they work, that people were not able to match the cognitive
and when they are most appropriate. ideal, while the political model sought to demon-
A second step to enhance the realism of strate that decision makers do not necessarily
cognition is to incorporate insight. Insight appears agree on goals. However, with these descriptions
to be a process which involves the juxtaposition accomplished, it is time to move on. This is
of competing alternatives or problems leading to particularly important since normative impli-
a quantum shift in gestalt. For example, Mintz- cations are at the heart of strategic management.
berg and Waters (1982) note the complete We suggest several steps. First is simply to do
reconceptualization of strategy in a matter of more normative studies. For example, research
days by the executives of Steinberg's grocery could probe the previously mentioned paradigm
chain. The authors write (1982: 482): 'And so, debates such as is it effective to be rational, is
over the course of one eventful weekend, its it effective to be rational in some ways, but not
name was changed to 'Wholesale Groceteria,' others, or are politics effective. Also possible
prices were slashed, personal services cut, and are studies which probe contingencies. Here,
full self-service instituted'. However, apart from research could ask how effective strategic choice
this study, theory and findings are in short processes vary with the size of the firm, degree
supply. We suggest research to probe how insight of government regulation, or pace of technical
occurs, how it can be enhanced, and how it can change. Studies of different cultures would be
be controlled if too frequent. particularly timely since most research on strategic
Studying intuition is a third way to create a decision making has been conducted in Northern
more realistic view of how strategic decision European and North American contexts. Yet,
makers actually think. Here there are past strategic decision making may be quite different
exemplars such as Mintzberg and Waters (1982) in other cultures, especially as notions of hierarchy
and Eisenhardt (1989) which reveal that intuition and group dynamics vary.
is related to continuous engagement in the details A second step is to conduct studies on a

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variety of outcomes. Past research has a limited even glorifies conflict. However, conflict is not
range of outcomes. Part of the problem is always so intertwined with parochial self-interest
empirical. Much research has been conducted in as the political model claims (Sharfman and
nonprofit organizations, field simulations, and Dean, 1992). Strategic decision makers are often
laboratory studies. While valuable, settings such ambivalent about politics (Gandz and Murray,
as lab studies, schools and government agencies 1980), and less likely to politicize important
seem less relevant to strategic management where decisions (Sharfman and Dean, 1992). This latter
the focal concern is profit-seeking firms in often point suggests that conflict resolution through
highly competitive settings. Part of the problem politics may be less acceptable for strategic
is theoretical. A successful outcome is implicitly decisions than elsewhere.
gauged by decision quality in the rational One step to enhance the realism of conflict is
perspective. In the political perspective, success to explore the benefits and costs of conflict. As
is individuals getting their own way in battles noted earlier, conflict can lead to a more
over turf. The garbage can lacks any real thorough, creative strategic decision making
connection with success at all. Yet, many real process (e.g., Janis, 1982; Tjosvold, 1985;
strategic decision makers are concerned with Schweiger et al. 1989; Cosier and Schwenk,
other outcomes as well. Although some work 1990). And yet, conflict can retard the process
has been done (e.g., Eisenhardt, 1989; Judge (e.g., Mintzberg et al., 1976; Hickson et al.,
and Miller, 1991), studies could explore how to 1986) , and tear apart a decision making group
make strategic decision processes faster, creative, by creating winners and losers in an atmosphere
or more adaptive, and how to ensure better of frustration, anger, and resentment (e.g.,
implementation of decisions. Studies could extend Baldridge, 1971; Pettigrew, 1973). We suggest
Burgelman's (1991) work to examine decision research to explore whether some sources of
outcomes at different levels of organizations. conflict are more beneficial than others, whether
And, of course, research could explore when are there is an optimal level of conflict, how conflict
specific outcomes most important, and how, if relates to emotion and decision speed, and
at all, process outcomes such as decision quality, overall, how strategic decision makers can gain
speed, and implementation are simultaneously the benefits of conflict without the costs.
achievable. Another way to enhance the realism of conflict
is to examine politics. As noted earlier, an
emergent debate is whether politics are funda-
Conflict
mentally a positive, conflict-driven phenomenon
Conflict is the final agenda item. Reacting to the or a power-driven phenomenon related to dys-
assumption of a single, organizational goal in the functional decision making. The former views
classic economic model, the political perspective conflict as a purely cognitive phenomenon while
established the presence of conflict in strategic the latter sees its emotional effects in the creation
decision making and the importance of shifting of anger, frustration, and animosity. Future
alliances and political tactics. With this description research could probe this debate by attempting
in hand, it is time to move on to a more realistic to understand how conflict and power interact
understanding of conflict. with each other and with politics as well as by
Unfortunately, current paradigms are not very examining the normative implications of this
helpful. At one extreme, the garbage can model controversy. Also critical are the emotional
ignores conflict even as different perspectives effects on decision makers of the interplay among
clearly exist in organizations. In the middle, the conflict, power, and politics.
rationality perspective acknowledges conflict as Incorporating new approaches to conflict reso-
a means to improve problem solving (e.g., Janis, lution is a third approach to a more realistic
1982; Schweiger et al., 1986; Schweiger et al., view of conflict. Emerging evidence indicates
1989), but provides no insight on how to deal that strategic decision makers resolve conflict
with frequent consequences such as dissatisfaction not only through political means (the usual
and slow pace. And, there is no real insight on approach within traditional strategic decision
how conflict is actually resolved. At the other making perspectives), but also by developing
extreme, the political model emphasizes and cooperative decision styles, building trust, main-

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taining equity, and evoking humor (e.g., Sharf- However, the original debates about single
man and Dean, 1992; Eisenhardt and Bourgeois, organizational goals and perfect rationality, which
1993). A next step here is to combine this work shape both his attack and the current paradigms,
with the negotiation literature (e.g., Bazerman are no longer very controversial. They neglect
and Neale, 1991) to develop a more realistic important ways in which decision makers think,
view of conflict resolution approaches, their behave, and feel. In addition, the existing
effectiveness, and their applicability in different, empirical research is often distant from the
strategic choice settings. normative concerns of complex organizations at
the heart of strategic management. Thus, the
opportunity is here for richer visions of strategic
CONCLUSION decision makers and decision making.
A primary purpose of this paper is to review the

strategic decision making literature. Our synthesis ACKNOWLEDGEMENTS
of the empirical findings confirms that organiza-
tions are accurately portrayed as political systems We appreciate the very insightful comments of
in which strategic decision makers have partially Ned Bowman, Andrew Pettigrew, Bob Simons,
conflicting objectives and limited cognitive capa- and seminar participants at Texas A & M
bility. Further, strategic decision making is best University, Harvard Business School, and the
described by an interweaving of both boundedly Norwegian Technical Institute (NTH).
rational and political processes. It is boundedly
rational in that strategic decision makers are
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Strategic Decision-Making Processes: The Role of Management and Context
Author(s): Vassilis M. Papadakis, Spyros Lioukas and David Chambers
Source: Strategic Management Journal , Feb., 1998, Vol. 19, No. 2 (Feb., 1998), pp. 115-
147
Published by: Wiley
Stable URL: https://www.jstor.org/stable/3094060
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Strategic Management Journal, Vol. 19, 115-147 (1998)
STRATEGIC DECISION-MAKING PROCESSES: THE

ROLE OF MANAGEMENT AND CONTEXT
K VASSILIS M. PAPADAKIS1*, SPYROS LIOUKAS2 and DAVID CHAMBERS1
'London Business School, London, U.K.
2Athens University of Economics and Business, Athens, Greece
This paper investigates the relationship between the process of strategic decision-making and
management and contextual factors. First, drawing on a sample of strategic decisions, it
analyzes the process through which they are taken, into seven dimensions:
comprehensiveness/rationality, financial reporting, rule formalization, hierarchical decentral
zation, lateral communication, politicization, problem-solving dissension. Second, these proce
dimensions are related to (I) decision-specific characteristics, both perceived characteristi
and objective typologies of strategic decisions, (2) top management characteristics, and
contextual factors referring to external corporate environment and internal firm characteristics
Overall, the results support the view that strategic decision processes are shaped by a
multiplicity of factors, in all these categories. But the most striking finding is that decisio
specific characteristics appear to have the most important influence on the strategic decisio
making process, as decisions with different decision-specific characteristics are handled throu
different processes. The evident dominance of decision-specific characteristics over manageme
and contextual factors enriches the traditional 'external control' vs. 'strategic choice' deba
in the area of strategic management. An interpretation of results is attempted and poli
implications are derived. ? 1998 John Wiley & Sons, Ltd.
Strat. Mgmt. J., Vol. 19, 115-147 (1998)
INTRODUCTION haml, 1989; Langley, 1990; Pettigrew, 1990;

Rajagopalan, Rasheed, and Datta, 1993; Rajago-
palan
Strategic decision-making has emerged as et al., of
one 1997; Schneider and De Meyer,
the most active areas of current management
1991). As Eisenhardt and Zbaracki put it, despite
research. The area has greatly benefited from
the crucial role of strategic decisions, the strategy
such research traditions as behavioral decision
process research has not departed significantly
theory and transaction cost economics and hasa stage of being based on 'mature paradigms
from
recently gained its own momentum (Schwenk, and incomplete assumptions' (Eisenhardt and
1995). However, despite a substantial body Zbaracki,
of 1992: 17).
literature, it is still widely recognized thatInour
particular, the need has been recognized for
knowledge of strategic decision-making processes
integrative research which explicitly considers the
is limited and is mostly based on normative or of context on strategic processes (Bateman
impact
descriptive studies and on assumptions most and Zeithaml,
of 1989; Bryson and Bromiley, 1993;
which remain untested (e.g., Bateman and Rajagopalan
Zeit- et al., 1993, 1997; Schneider and
De Meyer, 1991; Schwenk, 1995). For instance,
Pettigrew (1990) asked whether the nature of the
Key words: strategic decision-making; rationality;
decision problem shapes the process more than
politics; strategic decisions; top management
* Correspondence to: Vassilis M. Papadakis, London does the organizational context through which the
Business
process
School, Sussex Place, Regent's Park, London NW1 4SA, U.K. proceeds. In the same vein, Rajagopalan
CCC 0143-2095/98/020115-33 $17.50 Received 1 December 1994

? 1998 John Wiley & Sons, Ltd. Revised 25 July 1995, 24 December 1996
Final revision received 5 March 1997

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
116 V. M. Papadakis, S. Lioukas and D. Chambers
et al. (1997) suggest as one of the priorities of THEORETICAL FRAMEWORK

future research in strategic decision-making the
examination of the extent to which variations in
Dimensions of SD processes
strategic decision-making processes (DMPs)Various
are dimensions/aspects of SD-making p
esses have been emphasized in the literat
explained by variations in organizational, environ-
mental, decision-specific, and managerial factors.
Many studies in the field of SD-making des
The wider literature on environmental deter- the process as a sequence of steps, phase
minism and the role of management choice is
routes (e.g., Fredrickson, 1984; Mintzberg, R
relevant here. Strategic decisions (SDs) are inghani, and Theoret, 1976). Others focu
among the main means through which man- process dimensions instead (e.g., Bourgeois
agement choice is actually effected. But empirical Eisenhardt, 1988; Hickson et al., 1986; Ly
research has not been extended to rigorous invest- 1987; Miller, 1987; Stein, 1980). Several dim
igation of the role of management factors, contex- sions of SD processes can be derived from
tual factors, and decision-specific characteristics literature. These include the following:
on the actual strategic decision-making processes.
The present paper attempts to contribute to * Comprehensiveness/rationality dimens
this area drawing upon an in-depth empirical (Dean and Sharfman, 1993a, 1993b; Lyles a
investigation of a number of strategic decisions. Mitroff, 1980; Miller, 1987). Elements of
Specifically, it focuses on SDs of an investment rationality can also be traced in studies address-
nature. These are decisions leading to significant ing such dimensions as complexity of method-
commitment of resources, with significant impact ology (Langley, 1990), degree of inquiry
on the firm as a whole and on its long-term (Lyles, 1987), and scrutiny (Cray et al., 1988).
performance (Marsh et al., 1988). * Centralization (Cray et al., 1988; Lyles, 1987;
First, the paper analyzes the process through Miller, 1987).
which organizations arrive at an SD. Using prior* Formalization/standardization of the process
research and empirical evidence it identifies and (e.g., Stein, 1980).
measures significant generic dimensions of the * Political/problem-solving dissension dimension.
process. The dimensions extracted refer to This includes among others politicality (Lyles,
comprehensiveness/rationality, formalization, con- 1987; Hickson et al., 1986; Dean and Sharfman,
figuration of the process, and politicization. 1993b; Pfeffer and Salancik, 1974), and
Second, these dimensions are related to a number negotiation/bargaining (Cray et al., 1988; Hick-
of factors belonging to the following categories: son et al., 1986; Pettigrew, 1973).
decision-specific characteristics, top management* Other factors have also been suggested such as
characteristics, contextual factors, i.e., external dynamic factors (Cray et al., 1988; Mintzberg
corporate environment, and internal firm charac- et al., 1976), forcing (Bryson and Bromiley,
teristics (such as systems, performance, size, 1993), and duration (Hickson et al., 1986;
ownership). Wally and Baum, 1994).
The structure of the paper is as follows. First,
we review the theoretical background and propose Characterization of the DMP on these dimensions
an integrated research framework for studying the allows the researcher to examine possible inter-
effect of management and context on SD proc- relationships with contextual and other factors.
esses. Then comes our research methodology, the
consideration of the dimensions of the process of
The role of broader context in strategic
arriving at SDs and the explanation of the se-
decision-making
lection and operationalization of management and
other contextual variables. Next, we present the Many researchers have referred to aspects of
analysis of the data as well as the main results contextual influence on strategic DMPs (e.g.,
of the study. Finally, we discuss our results, Beach and Mitchell, 1978; Billings, Milbum, and
summarize the main conclusions and derive Schaalman, 1980; Bryson and Bromiley, 1993;
theory and policy implications. Dutton, Fahey, and Narayanan, 1983; Hitt and
Tyler, 1991; Rajagopalan et al., 1993). Schneider
and De Meyer (1991), in an attempt to provide
Strat. Mgmt. J., Vol. 19, 115-147 (1998) ? 1998 John Wiley & Sons, Ltd.

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
Strategic Decision-making Processes 117
an integrative model, proposed the following issue identification and diagnosis (e.g., Billings
categorization of factors which are expected to et al., 1980; Dutton, 1986; Jackson and Dutton,
influence strategic processes: (1) managers' indi- 1988). The authors are not aware of any empirical
vidual characteristics and group dynamics; (2) work that empirically examines a range of
internal organizational context; and (3) environ- decision-specific characteristics in relationship to
mental factors. Pettigrew (1990) suggests that in a range of process dimensions. With few excep-
addition to context, research should consider the tions (e.g., Dean and Sharfman, 1993a; Dutton,
role and significance of the nature of the decision 1986; Dutton, Walton, and Abrahamson, 1989;
problem in shaping the process. Dutton et al., 1983; Fredrickson, 1985), existing
An integration of these contextual domains into research has not yet shown in any detail how
a wider framework looks a promising avenue for decision-specific characteristics shape the DMP
research. Such a framework must combine at least as a whole.
the following basic perspectives: an 'individual
decision perspective', 'strategic or management
The strategic or management choice perspective
choice', 'environmental determinism', and a 'firm
characteristics and resource availability perspec-
This perspective emphasizes the role of decision-
tive'. The following paragraphs briefly discuss makers. It stresses that strategic choices have
the theoretical underpinnings of each perspective,an endogenous behavioral component, and partly
as well as the most important relevant research reflect the idiosyncrasies of decision-makers
efforts under each perspective. (Child, 1972; Cyert and March, 1963). A number
of studies extend this argument further, con-
tending that the role of 'upper echelons' or 'top
The decision perspective
managers' or 'strategic leadership' is important
The nature of the decision itself, or the SDenough to determine strategy content and process
project, may be important. Research into (Child, 1972; Hambrick and Mason, 1984; Miller
decision-making cognition and labeling suggestsand Toulouse, 1986).
that the same internal or external stimulus may Research has mainly focused on the influence
be interpreted quite differently by managers inof top management (i.e., CEO and/or top man-
different organizations or even within the sameagement team) on corporate strategies (Miller and
organization (e.g., Dean and Sharfman, 1993a;Toulouse, 1986; Finkelstein and Hambrick, 1990),
Dutton, 1993; Haley and Stumph, 1989). It hason performance (Haleblian and Finkelstein, 1993;
been argued that the way managers categorizeSmith et al., 1994) and on planning formality
and label a decision in the early stages of the(Bantel, 1993). There has been little empirical
DMP strongly influences the organization's sub-work on the link between top management and
sequent responses (Dutton, 1993; Fredrickson,the process of making SDs (Bantel, 1993; Huff
1985; Mintzberg et al., 1976). For example, thereand Reger, 1987; Lewin and Stephens, 1994;
is evidence that if a decision is perceived as aSmith et al., 1994). As Rajagopalan et al.
(1993: 364) stress in a recent review:
crisis different actions will be taken than if the
decision is perceived as an opportunity (Jackson
research relating organizational factors such as
and Dutton, 1988; Milbur, Schuler, and Watman,
... top management team (TMT) characteristics
1983). Fredrickson (1985) found that when to strategic decision processes is limited.
decisions were interpreted as threats as opposed
to opportunities, the DMP followed was charac- Moreover, the few studies which have been
terized by greater comprehensiveness. done on the links between top management
Our understanding, however, of the impact characteristics
of and strategic DMPs have produced
mixed results. Recently Hitt and Tyler (1991)
decision-specific characteristics on organizational
decision-making processes is still quite limitedfound that the demographic characteristics of
(Papadakis and Lioukas, 1996; Rajagopalan etCEOs (i.e., type of academic education) influ-
al., 1993). Most of the empirical work focuses enced the modes of strategic decision-making
on: (1) single decision-specific characteristics followed. It is interesting to note that counter-
(e.g., opportunity or crisis) and their influence arguments
on have also been advanced. Stein, in
aspects of the DMP; or (2) the early stages of studying the strategic DMP, went so far as to
? 1998 John Wiley & Sons, Ltd. Strat. Mgmt. J., Vol. 19, 115-147 (1998)

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
conclude that 'leadership does not constitute a ments effective firms follow more rational DMPs.
meaningful contextual domain influencing stra- Sharfman and Dean (1991) argued for a link
tegic procedures' (Stein, 1980: 332). The same between environmental heterogeneity and stan-
dardization in the making of SDs. In a similar
view has also been supported by Lieberson and
O'Connor (1972), and Hannan and Freeman vein, Priem, Rasheed, and Kotulic (1995) have
(1977). From another perspective, Lyles andfound that comprehensive processes led to better
Mitroff (1980: 117), note that managementperformance in rapidly changing environments.
characteristics may not influence the organi-In sum, the results of this body do not help
zational problem-formulation process. us in making any meaningful generalizations
This is a significant issue that needs to be
(Sharfman and Dean, 1991). Rajagopalan et al.
(1993: 354) and Dess and Rasheed (1991) note
resolved empirically. The influence of top man-
agement on SDs remains unclear. To advance ourthat the small number of studies adds to the
knowledge of the role of the CEO and the TMT uncertainty as to the effects of each environmental
we need a better understanding of their impactaspect on the process of making SDs. Another
criticism is that most research seems to focus
(if any) on strategic DMPs and/or the underlying
characteristics which are important (Rajagopalan
mainly on one important environmental character-
et al., 1997; Smith et al., 1994). istic (i.e., environmental uncertainty). Other
important characteristics such as environmental
munificence-hostility seem to have received
The environmental determinism perspective
somewhat less attention (Rajagopalan et al.,
According to environmental determinism, stra- 1993).
tegic decisions and processes are expressing adap-
tation to opportunities, threats, constraints, and
other characteristics of the environment. The role
The firm characteristics and resource
availability perspective
of top managers is minimized to a facilitation of
this adaptation. Hannan and Freeman (1977) and This perspective emphasizes internal factors such
Aldrich (1979) go even further to propose as: a internal systems, company performance, size,
process of natural selection of species for organi-corporate control (i.e., ownership). At the level
zations: the environment determines who will sur- of theory, it can be linked to the 'inertial' per-
vive, while top managers are passive agents with spective proposed by Romanelli and Tushman
minimal impact on corporate development. This (1986), according to which existing organi-
view is in line with economic theories in which zational arrangements, structures, systems, proc-
decision outputs rather than internal DMPs areand resources, though initially determined
esses,
relevant for the explanation of a firm's behavior by management and environmental forces, in turn
in a competitive environment. constrain future strategic decision-making. It is
In the context of SDs the environmental deter- also related to resource availability such as prof-
minism perspective mainly addresses the question itability and slack resources. More specificially:
of how environmental factors (e.g., dynamism,
hostility) influence strategic DMPs. Few empirical Internal systems. The systems of an organization
studies can be found here (e.g., Fredrickson,
(especially formal planning systems (FPSs),
1984; Eisenhardt, 1989; Judge and Miller, 1991) might be expected not only to exert significant
and those available seem to have produced con- influence on the flow of information between the
tradictory results (Rajagopalan et al., 1997). For
layers of hierarchy, but also to determine the
example, Fredrickson and Iaquinto (1989) con- nature and context of human interactions, and to
tend that companies operating in stable environ-influence SD processes (Armstrong, 1982; Miller,
ments follow rational-comprehensive strategic 1987). The literature is replete with studies argu-
DMPs. In the same vein, Stein (1980) argues ing that FPSs are essential tools for managers,
that companies operating in highly dynamic since they are designed to improve managerial
environments may tend to employ both less decision-making (e.g., Duncan, 1990; Langley,
extensive search and less explicit analysis of
1988). But there is an opposite line of argument,
alternatives. Yet, Bourgeois and Eisenhardtwhich discounts their contribution to SDs. It has
(1988) concluded that in high-velocity environ-
been convincingly argued that much of the actual

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
decision-making make take place outside FPSs organizational decision-making. However, i

(e.g., King, 1983; Sinha, 1990). It seems therefore worth mentioning that Dean and Sharfma
a fruitful research question, to explore empirically (1993a) as well as the Bradford studies (e.g
this link between formal planning systems and Hickson et al., 1986) found no differences in
strategic DMPs. strategic DMPs which could be attributed to size.
Performance. Since virtually all strategic initia- Corporate control. Several studies have pro-
tives require resources, a 'resource perspective' vided evidence on the important implications of
may be added to the determinants of SD proc- corporate control in strategic DMPs (e.g.,
esses (Bourgeois, 1981; Pfeffer and Salancik, Lioukas, Bourantas, and Papadakis, 1993; Mintz-
1978). Research relating past performance to stra- berg, 1973). The type of ownership or control
tegic DMPs is limited (Rajagopalan et al., 1993). type is a variable which has attracted much atten-
Much research investigates performance in tion, especially lately in the literature on markets
relation to the content of strategy, planning, and for corporate control and privatization. If it is
strategy formulation processes, rather than SDs. hypothesized that nationally owned enterprises
An exception is the study conducted by Fredrick- display a national style of management and
son (1985), who found that past performance had national 'culture' in decision-making, while sub-
a negative effect on the comprehensiveness of sidiaries of multinationals may represent an
strategic DMPs. implanted (probably more 'sophisticated')
More than three decades ago, Cyert and March decision-making style, then it will be of interest
(1963) reached the same conclusion, i.e., that to test whether important differences can be
superior performance is expected to lower the detected. The Bradford group of researchers have
intensity with which organizations will 'search' provided evidence of the existence of different
for and analyze information. In the same veindecision-making patterns between British and
Bourgeois (1981) and March and Simon (1958) multinational companies operating in Britain
suggested that slack resources offer organizations(Mallory et al., 1983). Moreover, as suggested
the 'luxury' of 'satisficing', and suboptimal by several authors, public vs. private ownership
decision-making. The above arguments lead us to may decisively affect decision-making practices
hypothesize that performance may be negativelyand processes (e.g., Lioukas et al., 1993).
related to rational decision-making.
Against this, others have found empirical sup-
Towards an integrated research framework
port for a positive relationship. For example,
Smith et al. (1988) found that, for both small It is evident from the above brief review that:
and larger firms, comprehensive outperformed (1) there has been little research on the influence
less comprehensive decision-making, and Jones,of broader context on SDs; (2) most of the
Jacobs, and Van't Spijker (1992) reported con-studies focus on a limited number of antecedents
sistently positive relationships between organi- while ignoring other important sources of influ-
zational effectiveness and comprehensiveness inence on strategic decision-making processes
decision-making. Taken together, empirical results (model underspecification); (3) most of the stud-
in this area are conflicting. This may be due to ies focus on just one characteristic of the process
the moderating effect of other omitted variables(i.e., comprehensiveness, politics, decentral-
(e.g., environment) or to model underspecificationization), despite the fact that strategic DMPs are
which characterizes much of the research multidimensional in nature; (4) in addition, much
(Rajagopalan et al., 1993). of the evidence produced is contradictory and far
from establishing a coherent theory.
Firm size. Company size is usually considered Therefore, we are not able to answer the ques-
to be of importance in the context of SDs. tion 'what
Again,are the key influences on the process
the evidence is far from clear or generalizable. of making SDs?' Is it the external environment
Fredrickson and Iaquinto (1989) reported that
as the population ecologists would argue, or is it
larger size is associated with comprehensiveness the top management (CEO and top management
in strategic decision-making. Child team (1972)(TMT))
also as the proponents of management
suggested that size affects the framework choice theories
of would contend? Do internal

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
enterprise characteristics affect the process? Do (2) semistructured interviews with key parti-
different decision-specific characteristics, as per- cipants; (3) completion of two different question-
ceived by management, lead to different treatment naires: one general for the CEO and one decision-
of the decision? Does past performance play any specific for the key participant(s); (4) supplemen-
role in influencing the making of SDs? What is tary data from archival sources (e.g., internal
the role and significance of formal planning documents, reports, minutes of meetings).
systems? The research covers 70 SDs in 38 manufactur-
Since these questions remain largely unan- ing firms in Greece. A sequence of steps was
swered (Bateman and Zeithaml, 1989; Bryson and followed in order to secure the reliability of
Bromiley, 1993; Pettigrew, 1990; Rajagopalan et data based on participant recall. The process is
al., 1993, 1997; Schneider and De Meyer, 1991), described in Appendix 1. The sampling frame
it seems that what is needed is an exploratory comprised all manufacturing enterprises in Greece
approach which views the process of making SDs with more than 300 employees, drawn from three
as subject to multiple influences, and examines industrial sectors (food, chemicals, and textiles)-
the effects of factors in three contextual domains:
a total population of 89 companies of which 38
participated in the research. The average size of
decision-specific characteristics, top management,
and context. the companies in the sample is 730 full-time
The present paper addresses these issues employees.
by In most cases two SDs were studied
formulating an integrative model of contextual in each firm, resulting in a sample of 70 SDs.
influence on strategic DMPs. The dimensions ofThe response rate achieved (approximately
the strategic DMP are shown on the right-hand 43%) is very high considering the intrusive nature
side of Figure 1. The decision-specific character-
of the research and the fact that top management
was asked to devote several hours of its time.
istics are depicted on the left-hand side. The top
block of the diagram indicates management fac- Comparison between respondent and nonrespon-
tors while the lowest block indicates broader dent firms on the basis of three objective meas-
contextual factors (corporate environment ures (number of employees, total assets, and
and
internal firm characteristics). return on assets), verified the representativeness
This study operationalizes these of the final sample.
dimensions/factors, and tests their effect on the
DMP. The components of the model, together
Reliability and validity considerations
with operationalization and measurement issues,
follow the discussion of our methodology. Thebased on participant recall, though the
A study
exploratory nature of the paper should dominant
again bemethod of studying decision-making
processes,
stressed. Given that previous studies have reachedmay have inherent limitations
widely conflicting conclusions the paper(Bouchard,
aims to 1976; Huber and Power, 1985;
Kumar, Ster, and Anderson, 1993). A number
provide evidence as to which domains pertaining
to the SD process are more important, ofand which
procedures have been suggested to help reduce
factors within each domain actually their influence
impact, including the use of multiple inform-
various dimensions of the process. Further ants (Kumar et al., 1993). Even these method-
research will be needed to advance and test parti- ologies do not guarantee objectivity. The nature
cular hypotheses. of the present research (in-depth study of one or
two SDs in each company, a separate CEO inter-
view, use of archival data), the specific features
RESEARCH METHODOLOGY of the sample (i.e., medium-sized enterprises,
existence of few key informants in each SD), as
Data collection and sampling issues
well as the effort required to find informants to
To achieve these objectives an ambitious discuss instudy
depth often delicate matters, relating
was designed and executed, which took more to an SD, made it difficult to use multiple inform-
than 14 months of intensive fieldwork. This can ants per SD and to aggregate their responses.
be characterized as a multimethod, in-depth field Several tactics were followed in an attempt to
research study (Snow and Thomas, 1994). The alleviate possible biases (Bourgeois and Eisen-
data sources include: (1) initial CEO interview; hardt, 1988; Huber and Power, 1985; Kumar et

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
0
. ..
....................
............
.........
- ..........
--- ------- .......
......... ..... ............
-------------------
_' C E O TOP M AN A GEME N T

or
* Risk Propensity * Level of Education
pp * Education * Aggressive Philosophy
C.
* Need for Achievement
A * A%gressiveness
* GENERIC * Rationality/comprehensiveness
CHARACTERISTICS (e.g.)
=:> Magnitude of Impact * Financial Reporting
> Threat/Crisis * Formalization

= Frequency
* Hierarchical Decentralization
* TYPE OF SD (e.g.)
=> New Business Investment * Lateral Communication
=> Investment in Capital
Equipment * Politicization
> Investment in Marketing
* Problem solvi
. .....- .......... .. . . ....... ..-.-. . ...... .......... ... ........:................: -:.

------. -R -K-4---f-R- - - B- .. 4 O
.......................... . .. . . . .
3 EXTERNAL ENVIRONMENT INTERNAL CONTEXT

* Heterogeneity *? Internal Firm Characteristics (e.g. planning formality)
I,
-
* Dynamism *? Performance (return on assets, growth)
Q~
* Hostility * Corporate Control/Ownership Type (e.g. SOE, private Greek Company, sub
* Size (nr of employees)
to Figure 1. Factors influencing strategic decision-making processes

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
al., 1993). First, archival records documenting afford some confidence that common method bias
the process and its characteristics were collected was not a problem. Finally, the willingness and
prior to each main interview. Second, all the sincerity with which top managers participated in
discussions were recorded. This tactic enabled the
the research and the interest they showed during
researcher to have direct access to the original
the interviewing process provide a further reason
discussion and pay attention to any part of it,toatbelieve in the face validity of their responses.
later stages. Interview notes, impressions, and
noteworthy points were written down during the
OPERATIONALIZATION AND
first 24 hours after the completion of the inter-
MEASUREMENT OF SD PROCESSES
view (Bourgeois and Eisenhardt, 1988). These
improved knowledge of the process.
The dimensions along which SD processes w
Third, particular caution was exercised to min-
imize distortion and memory failure problems measured in this study are: comprehens
notably by selecting recently taken decisions ness/reality, extent of financial reporting,
ence of a set of formalized rules guidin
(Mintzberg et al., 1976), by interviewing only
process, hierarchical decentralization, la
major participants having an intimate knowledge
communication, politicization, and prob
of the process (Kumar et al., 1993), by adopting
a 'funnel sequence' method in conducting inter-
solving dissension. These are indicated in A
dix 2 along with their measurement det
views (Bouchard, 1976), by cross-checking inter-
view-derived information against other managers'
reliability levels, and the sources from which
were
recollections (e.g., CEOs), by using additional derived.
informants in cases of incomplete information, As outlined in the theoretical framework, ample
theoretical support can be found for the above
and by cross-checking interview data with other
company sources available (e.g., documents, dimensions. For example, the framework adopted
reports, minutes of meetings). is similar to that of Cray et al. (1988). Indeed,
In addition, a small number of key process
the scrutiny dimension is captured by the compre-
variables were measured independently (e.g.,
hensiveness and financial reporting dimensions,
planning formality, internal reporting activities)
the interaction dimension is captured by the polit-
based on archival data. Statistical tests showed
icization and problem-solving dissension dimen-
that managers' recollections were significantly
sions, and the centrality dimension is similar to
correlated with the selected archival data. In our hierarchical decentralization and lateral com-
addition, both subjective and objectivemunication
data on dimensions.
corporate performance were obtained. TheMoreover,
two the reliability levels are very satis-
methods provided similar results, reinforcing
factory. Especially for the comprehensiveness/
belief in the validity of the data. However, man- construct, they are higher than those
rationality
agers' recollections were used in measuring reported
most by other researchers (e.g., Dean and
of the variables in this study. Sharfman, 1993b; Fredrickson, 1984; Smith et
Another major consideration was the minimi- al., 1988). It is noteworthy that despite the fact
zation of common method bias. To correct for that the resulting variables tap dimensions of the
same phenomenon (i.e., the strategic DMP) they
such effects the following precautions were taken.
First, a number of variables (e.g., size, do not have very high intercorrelation coefficients
performance) are archival, obviating any (see dangerTable 1). All, however, are in the expected
of common method bias with them. Second, two direction. For example, the formalization con-
different questionnaires (general and decision- struct is positively and significantly related to the
specific) were used and they were answered by notion of rationality, an association argued by
different managers (i.e., dependent and inde-several researchers (e.g., Langley, 1989).
pendent variables were answered by different
persons). Third, the items used in the analysis
were distributed throughout a lengthy interview.
Fourth, scale anchors were reversed in several
places to reduce and compensate for the develop-
ment of response patterns. These precautions

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
Table 1. Correlations among SD process dimensions
Mean S.D. 1 2 3 4 5 6 7
1. Comprehensiveness/rationality 3.26 0.73 1.00

2. Extent of financial reporting activities 0.00a 1.00 0.46*** 1.00
3. Rule formalization 0.OOa 1.00 0.28** 0.19 1.00
4. Hierarchical decentralization 2.77 0.54 0.42*** 0.35** 0.01 1.00
5. Lateral communication 2.23 0.56 0.62*** 0.35*** 0.27* 0.54*** 1.00
6. Politicization 2.97 1.34 0.31** 0.10 -0.11 0.14 0.07 1.00
7. Problem-solving dissension 2.50 1.27 -0.01 -0.12 -0.14 0.01 -0.08 0.27* 1.00
*Significant at 0.05; **Significant at 0.01; ***Significant at 0.001.

aVariables marked with an asterisk are factors (principal components) incorporated in the analysis.
SELECTION AND equipment (e.g., expansion of production equip-

OPERATIONALIZATION OF ment, storing facilities, modernization of pro-
EXPLANATORY VARIABLES duction equipment), investment in the marketing
domain (e.g., new product introduction, marketing
Measuring decision-specific characteristics
channels), and finally internal reorganization
To derive generic dimensions, the present investments (e.g., investments in information sys-
research specified and measured 16 decision- tems, internal reorganization). All these are meas-
specific characteristics, which would apply acrossured using dummy (0/1) variables.
the diverse SDs in our sample, and which were
based on the literature review. These issue charac-
teristics are shown in Table 2.
Measuring top management characteristics
These initial variables were factor analyzed,
Both personality and demographic variables are
used to measure characteristics of the CEO and
using varimax rotation method, and six factors
were derived. Table 2 presents the results ofthe
theTMT. This would help find out whether it is
the CEO, or the TMT, or both, that play an
factor analysis investigation. It is worth noting
important role in the making of strategic
that all factors reflect distinct, internally consistent
decisions.
patterns suggesting generic characterizations of
SDs. A specific name is assigned to each factor
based on the variables loading. The names of
CEO's personality and demographic
these factors are: SD's magnitude of impact,
characteristics
uncertainty, amount of pressure anticipated by
Twoto
the participants, frequency/familiarity, extent CEO personality characteristics are incorpo-
which the SD was perceived as a crisis situation,
rated in the present work: need for achievement,
and finally extent to which the SD emerged and risk attitude. Need for achievement is, accord-
through the formal planning system (planned ingvs.
to several writers, one of the basic character-
ad hoc). Appendix 3 presents details on variable
istics positively associated with entrepreneurial
success (Gough, 1976). In the present study
measurement, sources in the literature from which
Steers and Braunstein's (1976) scale is used (see
these were drawn, and their reliability levels.
Appendix 3). Attitude towards risk (risk
But these generic characteristics may not cover
propensity) is a psychological disposition of indi-
the true nature of a project. So further objective
viduals to show varying degrees of risk-taking or
decision-specific constants were added describing
any idiosyncratic aspects of SDs not accountedrisk avoidance behavior. It is among the major
by the characteristics included (see Hickson personality
et dimensions which was found to be
al., 1986; Shirley, 1982). For the purposes ofassociated
the with various strategic configurations.
The is
present paper, a fourfold classification of SDs particular construct used is derived from
identitied: new business investment decisions Jackson (1976), and Eysenck and Wilson (1975).
(e.g., acquisitions, mergers, joint ventures, Appendix
new 3 describes how these dimensions were
company establishment), investments inoperationalized
capital and measured. The resulting

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
t
:i
c,
??
Table 2. Factor analysis results of decision specific characteristics
\o
ZE
Factor loadingsa
Factor 1: Factor 5: Fa
Magnitude of Factor 2: Factor 3: Factor 4: Frequen
Decision-specific characteristics impact Uncertainty Threat/crisis Pressure fam
SDs' impact on strategy 0.805

Radicality of changes 0.782
SDs' magnitude of impact 0.760
Precursiveness of the SD 0.743 0.35
Seriousness of consequences 0.608
Action uncertainty 0.731
Overall uncertain nature of SD 0.726
Information uncertainty 0.647 -0.266
Extent of crisis perception 0.847
Perceived threat of loss 0.819 0.26
Time pressure to make the SD 0.903

Pressure on the organization 0.313 0.771
SD as part of another decision 0.79
Frequency of occurrence -0.401 -0.282 0.57
Familiarity with the SD -0.437 0.389 0.48
'Planned' vs. 'ad hoc' -0.263
Eigenvalue 3.59 2.42 1.87 1.38 1.1

z
Percentage of variance explained 22.4 15.1 11.7 8.
oo
00
Cumulative percentage 22.4 37.6 49.3 57.9 6
I.
1?
"Alpha factoring method was used, together with
cn
r,
p-

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
Internal context
reliability coefficients are satisfactory, providing
Internal systems. For the purposes of the present
reliability levels similar to those reported in other
studies (e.g., Budner, 1962; Steers and work, planning systems are used as potentially
Braunstein, 1976). very relevant to SDs (e.g., Sinha, 1990). In parti-
As regards CEO's demographic characteristics cular the variable formalization of the planning
several variables have been used for describingeffort is used. It has been suggested by various
researchers (e.g., Grinyer, Al-Bazzaz, and Yasai-
characteristics of 'managerial elites'. The present
research uses two variables: (1) CEO's length Ardekani,
of 1986) that formalization is one of the
service in the company (number of years with most prominent characteristics of planning sys-
the company); and (2) CEO's level of education.tems. The specific construct used is adapted from
Both variables have been reported to havethe
a work of Wood and LaForge (1981). Only
profound influence on organizational processes
seven of the initial 18 dimensions proposed by
Wood and LaForge (1981) have been selected.
and outcomes (e.g., Finkelstein and Hambrick,
1990; Hitt and Tyler, 1991). These dimensions were preferred because they
refer to the long-term planning conducted rather
TMT characteristics
than to short-term budgeting practices (see
Appendix 3). When factor analyzed the seven
Two measures were used. The first measures the dimensions produce only one factor, further ver-
degree of aggressiveness of what Hage and ifying the appropriateness of the modified scale
Dewar (1973) call the 'behavioral elite group'
used.
(i.e., the CEO and all those participating in major
decisions). It draws from Khandwalla (1977)Corporate
and performance. Two objective meas-
Stein (1980), and is measured by three items ures of performance are used: first, return on
expressing dimensions of the TMT's attitude assets (ROA), which is viewed as an operational
towards risk and achievement. The first item mea- measure of the efficiency of a firm with regard
sures the degree of 'beat-the-competition' attitude,to the profitable use of its total asset base
the second TMT's risk propensity (i.e., attitude(Bourgeois, 1980); second, growth in profits,
towards risky projects), and the third the top indicating the trend in profitability improvement.
team's attitude to innovation. The combination of This paper treats performance as an independent
these three items is explained as TMT's aggress- variable influencing the strategic DMP. To assure
iveness towards competitors, innovation, and this, performance measures were calculated going
risky projects. 5 years prior to the decision studied. This adds
The second variable attempts to capture confidence
the in testing whether past performance
level of education of what Hage and Dewar was a serious consideration when making the SD.
(1973) name as formal elite. It is an objective
variable measuring the percentage of managers, Firm size. To measure size this paper uses the
down to the level of departmental heads, who log of full-time employees (e.g., Fredrickson,
are university graduates. 1984).
Broader context
Corporate control. Finally, to capture the effect
of type of ownership control on decision-making
Environmental context
practices two dummy (0/1) variables are used,
distinguishing state-owned enterprises (SOEs) and
Three environmental dimensions are measured private Greek companies from subsidiaries of
multinationals.
using perceptions of top managers: (1) environ-
mental heterogeneity; (2) environmental dyna-
mism; and (iii) environmental hostility (opposite
DATA
to munificence). Appendix 3 describes how theseANALYSIS CONSIDERATIONS
dimensions were operationalized and measured.
Cronbach alpha reliability coefficients Given the number of variables involved, both
are satis-
factory, providing reliability levels similar
dependent to and independent, separate regression
models
those reported in other studies which used the were applied for each SD dimension. The
same measures.

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
results reported here present the 'best' regression ordinary change in regression coefficients. Most
equation, i.e., the equation which provides the of the regression coefficients appear to produce
maximum number of significant variables. These algebraic signs according to theoretical expec-
would give a first indication of the relative influ- tations and the coefficients for each regression
ence of the explanatory variables on each inde- show a high consistency with single correlations.
pendent variable.
A consideration in presenting the models was
whether a full equation model should be presented RESULTS
along with the best equation model, for each of
the dependent variables. The size of the sample
Table 4 summarizes the results of the paper. A
(i.e., 70 SDs) theoretically would impose limits
models afford good to satisfactory predictions
on the number of variables to be introduced the extent to which each SD process dimensio
simultaneously. The degrees of freedom is determined by the decision-specific, ma
would
not be adequate to assure reliable and validagement,
results and contextual characteristics. Th
in a full variables version. Moreover, the research
explanatory power of the models ranges from
is exploratory and in most cases there 0.39 to 0.63 and on average exceeds 0.50. Co
are not
prior strong reasons to expect relationships with the cross-sectional nature of the research
sidering
all variables. Versions with full equations
andcan be
comparing the results to similar efforts, this
is These
obtained from the first author upon request. seen as very satisfactory (e.g., Dean and Shar
do not change the pattern emerging. man, 1993a; Stein, 1980).
Each model was derived by both backward
elimination and stepwise regression methods in
corroboration. In most cases the results were
Comprehensiveness/rationality
Overall,
identical. In the very few cases where the two results show that comprehensiveness
rationality
methods provided different equations, further tests is affected by decision-specific charac-
were attempted by entering and removing teristics
vari-and internal context. Environment and
ables from the equation, and finally the management
model factors are insignificant. The specific
coefficients of Model 1, Table 4 suggest that
with the best explanatory power was selected.
SD's magnitude of impact and type of SD are
A second consideration refers to possible multi-
collinearity effects. Table 3 presents thethe most important decision-specific character-
inter-
correlations between the independent variables.
istics while planning formality, corporate per-
Only two out of over 300 single correlation
formance,
coef- firm size, and ownership/control type
are the dimensions of the internal context which
ficients are above 0.50, and then only slightly,
indicating that intercorrelations are not significantly
unduly influence comprehensiveness in the
SD-making process.
high. To safeguard for multicollinearity effects,
Results
the procedures outlined by Belsley, Kuh, and are in line with Dean and Sharfman
Welsch (1980) were followed. According to (1993a)
this, and Stein (1980), who suggest that the
condition indexes were calculated for each of the perceived magnitude of impact of a decision is
regression models of Table 4. These condition
among the strongest explanatory variables of
indices were far below the suggested warning decision-making behavior, as decision-makers act
level of 10.0 for mild collinearity. Thus, no seri-more comprehensively/rationally when decisions
ous problems are expected (Belsley et al., 1980). imply important consequences. It is also note-
Several other warning signals were also worthy that SDs for new business investment
inspected, in order to detect possible multi- and marketing type seem to be subject to less
collinearity problems. In none of the equations is comprehensive/rational analysis than SDs on
there a substantial R2 accompanied by statisticallycapital investment and internal reorganization.
insignificant coefficients, to raise suspicion about
This follows from the negative coefficients of the
possible multicollinearity problems. The stability respective dummies.
of regression coefficients was also tested. Here, As regards internal context, all dimensions
several runs were conducted by dropping orappear to be significant. Results support the nor-
adding independent variables in the equation. mative view that formal planning systems (FPSs)
None of these trial runs has indicated any extra- contribute to more rational decision-making

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
0
:rr
0~
F,
0
0<
cn
0
Y,
Table 3. Intercorrelations among independent variables
Variables Mean S.D. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
1. Magnitude of impact 3.29 0.75 1

2. Thread/crisis 3.04 1.26 09 1
3. Decision uncertainty 2.44 0.98 -16 01 1
4. Frequency 2.97 0.80 03 13 -26 1
5. Pressure 4.44 1.53 33 30 03 05 1
6. 'Planned vs. ad hoc' 3.81 1.08 42 10 -30 20 13 1
7. Heterogeneity 2.71 0.93 13 -13 -04 -19 19 35 1
8. Dynamism 3.17 0.87 23 -25 -26 09 16 21 44 1
9. Hostility 2.94 0.74 -19 05 38 -09 -04-19 -17 -32 1
10. Planned formality 3.04 1.13 26 19 -04 17 17 47 31 21 -28 1
11. CEO's need for achievement 2.15 0.63 -01 -26 00-18 -13 03 47 36 02 -05 1
12. CEO's risk propensity 3.14 0.56 24 15 -16 -01 39 14 24 36 -09 21 -01 1
13. CEO's no. of years with company 18.14 10.3 -01 -18 00 25 -17 -02 -13 -25 -12 17 -07 -26 1
14. CEO's level of education 3.36 0.89 00-01-01 10 02 01 -12 30 07 11 05 17 -39
15. TMT's level of education 85.0 16.6 08 25 -31 18 29 27 07 10 -46 44 -43 19 00
16. TMT's aggressive philosophy 3.35 1.18 37 -13 -13 13 26 34 42 55 -42 53 12 44 01
17. Return on assets 0.997 3.39 03 -04 11 18 13 10 13 16 01 28-14 08 23 1
18. Growth in profits 1.29 5.38 03 03 -33 -07 22 17 14 17 -33 16 10 10-06 0
19. Size 2.76 0.27 -22 16 10-06-04-07 -05 -19 00 00 11 -21 06 -04 0
20. State-controlled enterprises 0.19 0.39 -17 25 12 -26 8 -19 -05 -12 09 -18 -08 -02 -23 -
21. Private Greek companies 0.47 0.50 -01 -14 07 08 -27 -21 -30 -28 -33 -10 -04 06 -03 -3
22. Subsidiaries of multinationals 0.34 0.48 15 -06-17 13 22 38 35 39 -42 47 16 05 -03 0
Decimals of correlation coefficients were omitted.

For coefficients greater than r > 0.275 p < 0.01;
For coefficients greater than r > 0.20 p < 0.05; For coefficients greater than r > 0.35 p < 0.001.
ocr
2.

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
Table 4. Summary table of best models of regression analysesa
0
Model 1: Model 2: Model 3: Model 4: Model 5:

Comprehensiveness/ Financial Formalized rules Hierarchical Lateral P
Variables rationality reporting decentralization communic
70
oJ-
Decision-specific characteristics
\o
A. Generic characteristics
1. Magnitude of impact 0.35** 0.19* -0.20t 0.41*** 0.48**
\o
2. Threat/crisis 0.15t 0.20*
3. Decision uncertainty -0.16t -0.19*
4. Frequency 0.13t
5. Pressure -0.25* -0.19*
6. 'Planned' vs. 'ad hoc' 0.25* 0.25*
B. Type of SD
7. New business investment type -0.27** 0.42*
8. Investment in capital equipment 0.20t 0.64***
9. Investment in marketing -0.19* 0.19t 0.37*
10. Investment in internal reorganization
Top management characteristics

1. CEO's need for achievement
2. CEO's risk propensity
3. CEO's number of years with the
company 0.29**
4. CEO's level of education 0.23**
5. TMT's level of education
6. TMT's aggressive philosophy 0.21t 0.35** 0.34**
Broader context
A. External corporate environment
1. Environmental heterogeneity
2. Environmental dynamism
3. Environmental hostility
B. Internal context
Internal firm characteristics
1. Planning formality 0.29** 0.25**
Corporate performance
O-
1. Return on assets 0.20* 0.29** 0.33***
s0
0
2. Growth in profits
Firm size (no. of employees) 0.19*
o
Corporate control
1. State-controlled enterprises (SOEs) 0.18t
t~
2. Private Greek companies -0.25*
3. Subsidiaries of multinationals
r R2 0.63 0.60 0.48 0.54 0.66

CL
Adjusted R2 0.58 0.54 0.43 0.48 0.63
F 11.6*** 10*** 10*** 9*** 24.4***

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
(Armstrong, 1982; Duncan, 1990; Langley, 1988). choices in their strong stakeholders, both insid
Contrary to the line of reasoning which under- and outside the organization.
states the contribution of FPSs to decision-making The insignificant coefficients also provide us
(e.g., King,1983; Sinha, 1990), here planning for- ful suggestions. A striking result is the lack o
mality appears to be an important contributor to significance of top management characteristic
comprehensiveness in SD-making. since no variable loads significantly in Model
A positive relationship between corporate per- Only TMT's aggressive philosophy is marginal
formance and comprehensiveness/rationality is significant (at a 10% level). This seems at od
obtained with return on assets. It appears that with current theory, which stresses the vital r
high levels of performance may produce enough of the CEO and/or the TMT on comprehensive
resources to help in making better, more rational rational decision-making (Hambrick and Mason
decisions; that may mean that high performers 1984).
are 'offered the luxury' to invest in more analysis A similar observation can be made as regards
while poor performers may lack these slack environmental variables in determining compre-
resources. The opposite may also obtain: high hensiveness, which runs against propositions of
rationality may lead to better performance thus environmental determinism. We would expect
reinforcing a positive relationship. In the same environmental variables to influence rationality/
vein, others have argued that more rational comprehensiveness. Indeed, several researchers
decisions may themselves lead to better perform- have argued for the significance of environmental
ance (Grinyer and Norbum, 1977-78; Smith et heterogeneity in determining strategic processes
al., 1988). In our case this explanation is less (Lindsay and Rue, 1980; Smart and Vertinsky,
likely, given that ROA figures used concern pre- 1984). These authors argued that managers who
vious years. The results seem to contradict the perceive their corporate environment as complex
opposite school of thought, which suggests that tend to emply more comprehensive strategies.
superior performance may lower the extent to Bourgeois and Eisenhardt (1988), in their study
which organizations engage in rational decision- of strategic decision processes in high-velocity
making (Bourgeois, 1981; Cyert and March, environments, concluded that effective firms fol-
1963; Fredrickson, 1985). low the rational model in decision-making.
Size constitutes a significant explanator of com- Others have argued that companies operating
prehensiveness. This in line with the suggestions in stable environments follow rational-
of previous work (e.g., Fredrickson, 1984; Fred- comprehensive processes in making and inte
rickson and Iaquinto, 1989; Mintzberg, 1973), ing strategic decisions (e.g., Cyert and M
which state that size entails more 1963; Fredrickson, 1984; Fredrickson and
comprehensive/rational decision behavior.
Iaquinto, 1989; Hart, 1992). The argument behind
Finally, both dummy variables measuring
this contention is that strategists usually find it
control/ownership appear todifficult be significantly
to rely on formal financial analysis, in-
depth study, and rational processes when having
related to decision comprehensiveness/rationality.
More specifically, using subsidiaries to deal with of multi-
unstable, high-velocity environments
nationals as benchmarks, state-controlled characterized by information scarcity and rapid
enterprises seem to follow more rationalchange. proc- Instead, they are obliged to take quick,
esses, while enterprises of private Greek bold owner-decisions in many instances, relying on the
ship appear to be less rational. This is anavailable
inter- amount of information. In the same
esting result since it verifies the popularvein, viewcompanies operating in stable environments
that Greek private enterprises follow less rarely face significant opportunities and thus when
comprehensive/rational DMPs when making having to deal with such a situation they employ
decisions of a strategic nature, in comparison tomore rational processes.
subsidiaries of multinationals. That SOEs are Our results do not support either line of
closer to multinationals in this respect is thought.
unexpec-On the contrary, they are in line with
ted. Maybe they have qualified staff and Smith et al. (1988), who reported a lack of
engage
in more analysis, taking all the necessary any statistically
time significant relationship between
and effort to collect all necessary information environmental
and dimensions and rationality of stra-
explore alternatives, in order to justify their tegic final
decision-making. However, one should con-

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
sider the results of the other dependent variables, educated CEO is thus likely to demand more
before rushing to conclusions. detailed information, leading to more financial
reporting (Bantel, 1993). All other top man-
agement characteristics (e.g., CEO's need for
Financial reporting
achievement, risk propensity or tenure) appear to
Financial reporting, a dimension of rationality be insignificant.
typically applied in SD especially of an invest- From internal firm characteristics, again per-
ment nature, is significantly affected by decision- formance in terms of ROA is positively associated
specific characteristics, and some characteristics with financial reporting. An important finding is
of the internal context. also the negative association between private
More specifically, from a quick inspection of Greek ownership and financial reporting. It
Model 2 in Table 4 it appears that two decision-
implies that Greek private firms may rely less on
specific characteristics, notably magnitude formal
of financial reporting activities when making
impact and emergence of the SD through plan- strategic decisions than multinationals. This
ning, CEO's level of education and return on strengthens our argumentation when discussing
assets are to be positively associated with finan-
the results of the comprehensiveness/rationality
cial reporting, while private Greek ownership hasmodel. SOEs are not different from multi-
nationals.
a negative association. Of note are the marginally
significant associations (10% level of Of note is the general lack of significnce of
significance) provided by two other generic external corporate environment. This is in line
decision-specific characteristics. with the results obtained using the
First, results indicate that situations perceived
rationality/comprehensiveness construct. Interest-
ingly, size does not seem to be significantly
as crises are actually associated with more finan-
cial reporting activities. This is in line withassociated
pre- with financial reporting. These findings
vious theoretical argumentation (Dutton, 1986). will be further discussed in later sections of
In general, one might argue that when adversity the paper.
looms everyone might want to interpret and
explain the situation in terms of financial analysis
Rule formalization
and reporting. Or, taking another view, the com-
pany may seek to exercise control and support Rule formalization in the SD process (Model
the meaningfulness of its actions in the eyes 3, Table
of 4) is influenced by decision-specific
characteristics (decision uncertainty and emer-
both internal and external stakeholders by relying
on deeper financial reporting and analysis, gencesince through formal planning), top management
characteristics (CEO risk propensity) and corpo-
crises usually involve risks of a significant finan-
cial loss. rate control type (Greek ownership).
From decision-specific characteristics, decision
Second, financial reporting is negatively related
to frequency. This result supports the view uncertainty
that and emergence are negatively
associated with rule formalization of SD process.
frequent/familiar issues are dealt with by standard
rules and analogies from memories. They are
Uncertainty, as used here, refers to specific
therefore associated with less analysis and decisions,
com- as opposed to the uncertainty caused
prehensive reporting of data (Marmaras, Lioukas, by the organizational environment. Results are in
and Laios, 1992). Also the coefficients of the line with Thompson (1967: 134), who contends
dummies 'investment in capital equipment' and that in cases of high uncertainty managers act in
'investment in marketing' are marginally signifi- an 'inspirational' manner, by making obsolete any
cant showing a higher level of financial reporting formal procedures and rules usually followed.
for these types of decisions, as against invest- One can contend that high uncertainty about the
ments in internal reorganization. decision may, contrary to the received (common)
As regards top management, only CEO's levelexpectations, result in more intuitive processes
(Daft and Lengel, 1986; Dean and Sharfman,
of education is positively associated with financial
reporting. Education level has been found to be1993a) together with use of less formalized rules.
related to the extent of people's informationAgain, as expected, SDs emerging from the disci-
search and analysis (Dollinger, 1984). A highly pline of a formal planning system are found to
follow more formalized paths.

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
As regards management we observe a negative Pressure has a negative coefficient, suggesting

association between CEO's risk propensity and that when SDs are taken under pressure there
rule formalization in taking SDs. Again, such a may not be enough time to involve more levels
result is intuitively expected, since risk-takers and departments.
usually break the bounds of organizational sys- An interesting effect obtains for threat/crisis.
tems and formalities and influence the SD process This suggests that threatening situations result in
towards more informal paths. TMT's aggressive more hierarchical decentralization. At first this is
philosophy is also related to more formalized counterintuitive. A number of authors (e.g., Dut-
rules. ton, 1986; Herman, 1963) argue that centrali-
Finally, private Greek companies seem to be zation of authority is the expected outcome of
lagging in rule formalization as the negative coef- crises, since two opposite forces clash. First,
ficient suggests. SOEs do not differ from multi-managerial elites undertake the responsibility of
nationals. the whole effort to divert the crisis. Second,
Overall, however, we cannot argue that there middle managers, feeling that the issue might be
exists a 'balanced contribution' of all domains 'too heavy' for them to deal with, pass it to
(SD itself, management, and context) in top management.
explaining SD formalization. Of interest is the Milbur et al. (1983) provide an explanation
lack of significant impact of decision frequency,
for this counterintuitive result: their findings sug-
corporate environment, planning formality, pastgest that although centralization was the immedi-
performance, and size. This suggests that SD ate outcome of crises, the actual intermediate
process formality is independent from the formalresponse was decentralization of authority. This
planning machinery of the firm and external may be explained by the distributed character of
information and expertise; if we admit that the
corporate environment and the other internal com-
pany characteristics. It is more a matter ofsource of vital information is middle management,
decision-specific characteristics and top man-
centralization deprives top management of
agement choice. extremely useful data. Herman (1963) offered
another explanation. He argued that the relation-
Hierarchical decentralization and lateral
ship between crisis and decentralization of auth-
communication ority is curvilinear. Thus, under situations which
are characterized as 'mild crises' one may observe
The extent to which the SD process is decentral-
decentralization. By contrast, when crises become
ized and allows participation of lower-level man-
acute, authority centralization is found. Further
agers depends on the decision-specific character-
investigating the descriptive statistics of the vari-
able measuring the extent of perceived crisis, we
istics, on CED tenure, and corporate profitability.
Moreover, the extent of lateral communicationmay is see that the variable is measured on a 5-
determined by decision-specific characteristics,
point scale and has a mean of 2.51, which implies
rather 'mild crises', on the average. This suggests
top management team's aggressiveness, and inter-
nal firm planning formality. that our sample of SDs may not include intense
More specifically, several conclusions cancrises
be which are assumed to lead to hierarchical
centralization and less lateral communication.
drawn from the results of Models 4 and 5, Table
4. From the decision-specific characteristics,
As regards the effect of type of investments on
hierarchical
particularly strong is the effect of magnitude of decentralization, all dummy coef-
impact, followed by perceived pressure and
ficients are significant, showing that only internal
threat/crisis. Results imply that SDs with reorganization investments are relatively more
centralized. On the contrary, none of the dummy
important impact attract the collective attention
variables is significantly associated with lateral
of more layers in the hierarchy and more depart-
ments as revealed in Models 4 and 5. This corrob- communication.
orates Dutton et al. (1989), who argue that issuesTop management has two significant coef-
ficients. In Model 4 the variable measuring CEO's
with great magnitude of impact imply high inter-
connectedness with other relevant issues. There-
tenure is positively related to hierarchical decen-
fore, such issues attract more collective attention
tralization patterns. This may be explained by the
and thus result in higher hierarchical decentrali-
fact that CEO's tenure may influence participation
zation and lateral communication. patterns by developing greater levels of social

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
integration, and possibly by including in the a climate of shared effort, and facilitates smooth
dominant coalition more managers from various implementation of strategic decisions. Smooth
layers (Wiersema and Bantel, 1992). implementation contributes in turn to higher per-
Similarly, TMT's aggressive philosophy formance (Wooldridge and Floyd, 1990). On the
appears significantly positively associated withother hand, lack of involvement of employees
lateral communication during SD-making. This is other than 'strategic elites' in the process has
in line with the view that in order to follow an been found to create implementation problems,
aggressive strategy top management may need including sabotage (Guth and MacMillan, 1986).
more information and cross-departmental involve- Secondly, middle managers act as information
ment. If we consider that individual departments monitors and are usually the first to sense poten-
possess specialized information and their alliance
tial threats and opportunities in their own parti-
is crucial to implementation of an aggressive cular domains (Pascale, 1984). Increasingly, top
philosophy, it is plausible that the level of lateral
management's ability to sense the emergence and
communication may increase. meaning of various challenges encountered is
It is somewhat surprising, however, to find seen as a critical strategic capability. Due to
information overload, top managers may be less
again that corporate environment has insignificant
coefficients. None of the environmental variables
and less able to fully understand the world around
them. According to this view, strategic DMPs in
seems to have any effect on hierarchical decentra-
successful firms are more a product of a shared
lization and lateral communication patterns during
the making of SDs. This is more intriguing ifeffort
we than deliberation by one person.
consider the results of various studies which have Two other results also seem important. First,
argued for close links between environmental planning formality, as expected, has a positive
characteristics and decentralization and communi- coefficient in Model 5, indicating that it is
cation. For example, Lindsay and Rue (1980)associated with higher lateral communication.
argue that environmental heterogeneity isSecond, corporate control does not appear to
associated with more hierarchical decentralization,
influence decentralization and communication pat-
and more lower-level involvement. Miller and
terns. So there may be no significant differences
Friesen (1983) also suggested that an increase
between
in the various types of enterprises-state,
private, foreign-in decentralization and com-
perceived environmental heterogeneity is expected
to complicate the administrative task, munication,
thus when taking SDs.
resulting in subsequent changes in structure (e.g.,
more lateral communication). In the same vein,
Politicization and problem-solving dissension
Grinyer et al. (1986) contend that environmental
stability favors the delegation of authority Politicization
to and problem-solving dissension
(Models 6 and 7, Table 4) are mainly influenced
lower levels in the hierarchy, during the planning
process. Interestingly, none of these relationships
by decision-specific characteristics (uncertainty
are supported by our data. and pressure), one external environmental charac-
Performance, expressed by ROA, is positively
teristic (heterogeneity) and certain internal con-
related to hierarchical decentralization. This is in text characteristics (e.g., planning formality, per-
line with the results presented by Bourgeois formance,
and and corporate control).
Eisenhardt (1988) and others. They have reported Both politicization and problem-solving dissen-
that the more the power to make strategic sion seem to be influenced more by SD uncer-
decisions is delegated to the functional and di- tainty and less by other characteristics such as
visional executives, the higher the performance impact, threat/crisis, or pressure. This is in line
of the firm. This line of thought assumes that with Lyles (1981) who, based on case evidence,
greater participation (especially by middle argued that uncertainty about certain aspects of
managers) will have a positive impact on organi- an issue (i.e., definition) may raise politicality in
zational performance by triggering two parallel, the problem formulation process. Indeed, when
positive phenomena. On one hand, the involve- uncertainty exists (for example, about the actions
ment of more people in strategic DMPs increases to be taken and/or the information to be
the level of consensus among managers, producescollected), one may expect to find both a diver
a common understanding of the joint task, creates gence of opinions during the initial stages o

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
problem formulation, and a surge of political Of note is the general absence of top man-
activities during the issue resolution process. agement characteristics in influencing both polit-
Interestingly pressure situations are found to ical activities and problem-solving dissension.
have a positive effect on problem-solving dissen- Results support the view that the emergence of
sion among participants. It seems that pressure internal politics and dissension depends more on
situations may intensify dissension as many times the decision-specific characteristics and certain
they call into question the efficacy with which characteristics of the external and internal context
the dominant coalition has acted in the past to (environmental heterogeneity, planning formality,
preserve organizational interests, and threatens the performance), rather than the characteristics of
power base of managerial elites (Dutton, 1986). the decision-makers themselves. This appears to
It is not at all unexpected to witness what Herman be at odds with Dean and Sharfman (1993b),
(1963) has called 'factionalism'; i.e., various units who have reported that political behavior (among
or departments favor opposite views about the others) stems from the characteristics of the
proper reaction to the problem. It is also inter- decision-making group (interpersonal trust).
esting to note that all dummies for type of
decision have negative coefficients. This suggests
that all investments cause less dissension than DISCUSSION
internal organizational SDs.
Environmental factors also seem to have no the results of the paper support the
Overall,
that for understanding strategic DMPs in dep
significant effect on politicization, while environ-
mental heterogeneity appears to negativelyan integrative model which includes decis
influ-
ence problem-solving dissension. This latter result management, environmental, and organ
specific,
is contrary to expectations. For example, Dess factors is needed. Results suggest th
zational
and Origer (1987) argue for an inverse relation-
strategic DMPs are shaped by the interpla
ship between environmental heterogeneity these factors. Neither the external control model
and
consensus on goals, since complexity gives rise
(environment), nor the strategic choice model
to more possible points of conflict among (decision-makers),
man- nor the corporate inertial
agers and makes consensus more difficultmodelto (size), or the resource availability
achieve. Others (e.g., Lyles and Mitroff, 1980)
(performance), adequately explain actual strategic
argued along similar lines. decision-making behavior.
A positive relationship obtains between polit- The most striking finding was the dominant
icization and planning systems formality. role of decision-specific characteristics in
This
determining decision processes. To the best of
suggests that planning formality has a positive
influence on politicization. Results corroborate
thethe
authors' knowledge this is the first time that
prevailing view that FPSs encourage political the dominant role of decision-specific character-
behavior (Langley, 1988; Rhyne, 1986) since
istics (generic attributes and objective
managers may perceive planning systems as a
categorization) is verified in the context of SDs.
means through which personal views are The com-specific results show that the generic charac-
municated, political aspirations take effect, and of an SD, such as its perceived magnitude
teristics
political activity may develop. of impact, frequency/familiarity, its uncertainty,
Of note is also that both politicization
itsand
threat/crisis component, and whether it
problem-solving dissension are found to be posi- through discipline of the planning system
emerges
tively related to growth in profits. We will
of draw
the firm, significantly influence dimensions of
attention to this finding in our discussion section.
the DMP, more than other environmental, organi-
The positive statistical significant association
zational, and managerial factors.
between politicization and SOEs may be attrib- Somewhat similar results were obtained by
Meyer and Goes (1988), in their study of inno-
uted to the multiplicity of internal and external
interests in the context of SOEs. The fact that vation assimilation. In assessing the comparative
numerous parties may intervene and try influenceto skew of various contextual domains on inno-
the output of the decision process in their pre-
vation assimilation they found that environment,
ferred direction may raise politicization levels in
organization, and leadership, taken together, were
SOEs relative to other categories of enterprises.
relatively poor predictors of innovation. In con-
O 1998 John Wiley & Sons, Ltd. Strat. Mgmt. J., Vol. 19, 115-147 (1998)

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
trast very good predictors proved to be the innate Overall, regression results support the view that
attributes of innovations. both CEO's and TMT's characteristics have their
The generic decision-specific characteristics
effects in SD processes and are in line with Kets
tested in the present study may not be exhaustive.De Vries and Miller (1986) and Nahavandi and
Malekzadeh (1993). This may lead us to lend
This is obvious from the statistically significant
dummies expressing types of decisions. Thiscredence to the 'upper echelons view' of organi-
means that the objective type of SD variables zations, and put into dispute the allegations of
introduced offer a unique additional explanatory population ecologists (e.g., Hannan and Freeman,
power, not captured by the generic decision-
1977) who consider TMT to be but a passive
specific characteristics included. It also calls foragent.
a
search for additional 'generic' SD characteristics As regards external corporate environment, we
which may, when included, minimize any rem- found only one significant coefficient: namely,
nant effect of dummies. This, however, would that environmental dynamism has a negative
require further research. effect on problem-solving dissension. All other
New business investments and investments in
environmental variables we found to be largely
insignificant. Overall, our results contradict
marketing exhibit less association with rationality
in comparison to capital equipment investmentsresearchers who argued that environmental factors
and internal reorganizations. Investments in as opposed to internal organizational factors are
capi-
the primary sources of influence on SDs (e.g.,
tal equipment and marketing exhibit more finan-
Hannan and Freeman, 1977; Jemison, 1981).
cial reporting in comparison to other investments.
Investments in internal reorganization seem toNo besupport was found for the role of environ-
hierarchically more centralized in comparison mental
to heterogeneity/complexity on strategic
DMP.isRajagopalan et al. (1993) argued that the
other investments. Also internal reorganization
accompanied by more problem-solving dissensiondegree of environmental complexity in a firm's
in comparison to all other types of SDs. operating environment directly impacts the
amount and nature of information that has to
The study has also established the relative
be processed by decision-makers. Research on
importance of top management characteristics.
cognitive processes also suggests that environ-
Certain CEO characteristics entered significantly
into the regression models and influenced finan-mental heterogeneity affects SD process charac-
cial reporting, formalization, and hierarchical teristics such as comprehensiveness, and leads to
greater use of cognitive simplification processes
decentralization. This implies that the contribution
of CEO characteristics have also their own effect (Schwenk, 1988). None of these are supported
when controlling for other contextual factors. by our results. Again, environmental hostility was
These results are in line with research reportingfound to influence none of the characteristics of
that CEO personality and demographic character-SD process. The argument that organizations in
istics are related to aspects of strategic DMPshostile environments follow more rational
(e.g., Miller and Toulouse, 1986). decision processes (Dess and Beard, 1984; Rajag
In addition to CEO characteristics, TMT opalan et al., 1993) receives no empirical suppor
aggressive philosophy appears to influence In rule
an attempt to explain this lack of dominance
formalization and lateral communication and of only
the external control model, several speculat
weakly comprehensiveness/rationality. Itassumptions
is also may be advanced regarding the parti
worth noting that both the CEO and the TMT
cular country from which results are drawn.
appear to be insignificant in influencingSchneider
such and De Meyer (1991) reported that
dimensions as political activities and problem-Latin European managers, in contrast to other
solving dissension. This may be explained Europeans,
by the may be characterized by an attitude
of having limited control over the external
fact that executives do not always have complete
latitude of action (Hannan and Freeman, environment.
1977). Thus, they may direct their effort
There exist conditions of restricted discretion towards controlling the immediate, internal
where TM becomes less important and other environment,
fac- and adjust DMPs accordingly.
Although speculative this conjecture provides a
tors as corporate control, and firm characteristics
or decision-specific characteristics become fruitful
more avenue for research in comparative
significant in influencing politicality in SD mak-
decision-making practices.
ing. Internal firm characteristics show more sig-

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
nificant effects on DMPs. Firstly, formal planning almost all regression models except for
systems appear to have a positive influence on comprehensiveness/rationality, which appears to
three aspects of the DMP: comprehensiveness, increase with size. A similar pattern of associ-
lateral communication, and politicization. This is ations was reported by Dean and Sharfman
in line with theoretical and normative speculations (1993a). This result seems to be at odds with
arguing that planning systems lead to more the conventional wisdom that as companies grow
rational decision-making (Armstrong, 1982; Dun- they tend to move towards more procedural and
can, 1990; Langley, 1988). Again, results corrob- formalized decision-making (e.g., Mintzberg,
orate the prevailing view that formal planning 1973).
systems encourage both lateral communication Finally, it appears that control type has a sig-
(Langley, 1988; Tregoe and Tobia, 1991) and nificant impact on several aspects of strategic
political behavior (Langley, 1988; Rhyne, 1986). DMPs. Indeed, enterprises under state ownership
Concerning formal planning systems we should (SOEs) seem to apply more comprehen-
note the difference with another dimension which siveness/rationality, and more politicization, when
in the course of this research was treated as a making decisions of a strategic nature. This is in
line with the view that in the context of SOEs
project characteristic rather than as an internal
firm characteristic, i.e., the emergence of political
an SD and economic considerations coexist
through the formal planning system. This (e.g., refersLioukas et al., 1993). As strategic decisions
to the decision whether to handle an SD in the in SOEs are usually subject to scrutiny or influ-
formal planning machinery or treat it ad hoc
ence by strong stakeholders the decision-takers
outside the planning system, and is related may to thetake pains to demonstrate that they act
initial stages of project formulation. Theserationally
two and to justify their major decisions
both inside and outside the company (Dean and
variables are conceptually distinct and their inter-
correlation is not unduly high (r=0.47). Sharfman,
The 1993a; Romanelli and Tushman,
results suggest that both have a significant 1986).
influ- This explains the positive relationship
ence on strategic DMPs. between comprehensiveness and SOEs. The posi-
tive statistically significant association between
Another set of interesting relationships revolves
around the significance of corporate performancepoliticization and SOEs may be attributed to the
in determining decision processes. ROA provides fact that numerous parties, not only from inside
significant positive associations with rationality,
but also from the outside of the company, may
intervene and try to skew the output of the
financial reporting, and hierarchical decentrali-
zation. Profit growth in turn is highly related to process in their preferred direction. Such
decision
politicization and dissension. So different an per-activity may raise politicization.
formance aspects appear to influence different By contrast in private Greek companies less
dimensions of the process. Past profitability rational
may processes, less financial reporting, and
lead to more rationality and decentralization less of
rule formalization appear to prevail. Results
DMPs. Growth in profits may lead to internal seem to comply with the particular view, that
private Greek companies lag in analytical
politics and dissension. The latter is an interesting
resources
finding which deserves attention. It may be that and internal systems to support
comprehensive/rational decision-making, exten-
high growth of profits over time raises internal
conflicts as to where these resources should be sive financial reporting and formalized pro-
cedures,
invested. Particularly telling was the example of or may be less interested in analysis.
In a study of decision-making practices
a fast-growing company in the food sector which
was considering investing a sizable part ofbetween
its British and American-owned firms in
Britain Mallory et al. (1983) reported that in
retained earnings. The marketing department
wanted major investments in new products general
and American ownership had little or no
influence on the way decisions were made.
channels of distribution, while the production
department supported a single investment in Among
state the few alleged differences they found
of the art computerized storing facilities.
moreThe
reliance in British companies on certain
aspects of formalization. The results of this study
process of deciding where to invest these surplus
resources was a highly political one. seem to reveal an important gap between private
Greek
Size is found to be largely insignificant in enterprises and subsidiaries of multi-

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
hierarchical decentralization, and lateral

nationals which tend to have international charac-
teristics. This implies that Greek private man-
communication). These results directly question
agement may be associated with less the findings of a number of research works argu-
comprehensive/rational processes, less financial
ing for the secondary role of managers.
reporting, and less rule formalization. This opens
Another implication of the results is that they
verify the important role of the formality of
up interesting questions on comparative decision-
making practices across countries or types of
planning systems in influencing the making of
firms, which may be a useful avenue for future
SDs. Results indicate that formal planning influ-
research. ences the way in which strategic decisions are
taken and thus, to an extent, strategy itself.
Indeed, by influencing comprehensiveness, lateral
IMPLICATIONS AND POSSIBLE communication, and political activities, formal
EXTENSIONS planning systems seem to act as a powerful input
to the process of strategy making.
Some interesting practical implications followcontrol is also important, suggesting
Corporate
from the significance of decision-specific an important
charac- lagging of private Greek firms in
rationality. SOEs instead seem to be closer to
teristics, identified in this research, in comparison
to management, corporate environment, international
and inter- standards, as a benchmark against
nal firm characteristics. As certain of these the subsidiaries of multinationals included in
decision-specific characteristics are amenable to
the sample.
managerial interpretation and perception it Themay
present research effort has touched on only
be in the interest of management to aactively few of the research questions in the field of
manipulate the meaning or categorizationSD-making.
of stra- Several extensions, both method-
tegic issues, and through them to influence ological and substantive, need to be made, and
organizational responses. This is in line with
a number of points concerning overall research
much of the thinking in the area. For example,recommendations in the area highlighted.
top management deliberately make certain First, the research has established the domi-
decision-specific characteristics salient. nance
It mayof decision-specific characteristics over
choose to 'manipulate' the information provided
other management and context factors in making
from external to internal systems, such as SDs. More work needs to be done to test the
'Environmental Scanning' or 'Strategic Issuegeneralizability of the present results in other
Management' or 'Boundary Spanning' systems, settings and sample designs. Another useful line
to serve its own goals. What may be communi-of research would be to examine the same
cated as a threat by a specific system may be hypotheses in more narrowly defined sample
characterized as an opportunity by another. Fil-
e.g., controlling for types of enterprises or S
tering information and manipulating decision-and for other context variables, so that consisten
research findings can be accumulated and a mo
specific characterizations may enable management
to subsequently control rationality, formalization, focused contingency theory on the impact of con
lateral communication, hierarchical decentrali- text on strategic DMPs developed.
zation, and even the extent of internal political Second, despite the fact that the regression
activity. models tested here appear to have a very goo
The specific results indicate that certain man- explanatory power over the adopted proces
agement and internal firm characertistics bear on dimensions, there still remains an unexplaine
the strategic DMP, while others such as the percentage of variance. Further research can
environment variables appear to be insignificant. incorporate additional variables not considered in
So contrary to allegations on the significance of the course of this study (e.g., contextual elements
environmental determinants, management seemssuch as reward systems, organizational structure,
to play an important role. More specifically,or further SD attributes), and may adopt different
CEO's risk propensity, education, and tenure asand possibly more appropriate operationalizations
well as the TMT's aggressiveness seem to be of the constructs already used.
important determinants of certain process dimen- Third, theory is needed that more accurately
reflects the strategic DMP in its context and the
sions (e.g., rule formalization, financial reporting,

152.118.24.31 on Wed, 13 Sep 2023 11:16:44 +00:00
relative weight of its determinants. Progress in decision-specific characteristics are of no signifi-

this area could significantly improve both our cance in such a context: the work of Dutton et
understanding and eventually the quality of stra- al. (1989) as well as many others provide clear
tegic DMPs. A refinement of the formulation may evidence to the contrary. It rather implies that
be necessary before a more substantial expla- the role of these characteristics may be not as
nation or prediction capability can be achieved. dominant as they appear to be in the Greek
Fourth, it may be useful to include intermediate context. This opens up a very promising avenue
outcome variables of SDs (e.g., innovation, learn- for future research on comparative decision-
ing, decision quality, satisfaction, commitment, making practices, across different country and/or
and overall company performance/effectiveness). cultural domains. As Charles Schwenk argues in
Future research may seriously consider these a recent literature review, 'it may be that many
aspects, which were outside the scope of the of the conclusions about strategic decision making
present work. developed in the U.S. context will have to be
Fifth, the present work has established the modified in order to be applicable across cultures'
multidimensional aspects of SD processes and the (Schwenk, 1995: 484).
multiple relationships with the main variables of
the study. This enhances the need for producing a
more integrated image of decision-making reality ACKNOWLEDGEMENTS
through the simultaneous study of a large number
of qualities, and use of more sophisticated multi- The authors gratefully acknowledge that th
variate analysis of contextual influence on stra- per has benefited from an EC Post Docto
tegic DMPs (Rajagopalan et al., 1993). Simul- fellowship. They would like to thank three ano
taneous equation techniques would be useful to mous reviewers of SMJ for their comments and
further examine determinants of the actual setssuggestions which helped improve this paper sub-
of relationships in practice. stantially.
It will also be interesting to investigate how
closely these results, obtained in one southern
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APPENDIX 1: METHODOLOGY OF 1. It helped the manager to conceptually recon-

DATA COLLECTION struct the whole process and its major stages,
before answering the more specific (closed-
The SDs were identified at the initial CEO inter- ended) questions which followed.
view. The CEO was asked to complete the first, 2. It provided detailed qualitative data on the
general, questionnaire providing information level of respondent's understanding, his/her
about the company, its environment, and its conceptual language, personal views, etc.
organization. Then the CEO was asked to name 3. By answering spontaneously the initial open-
the two most important investment decisions ended questions, the respondent has committed
which had taken place in the last 2-3 years. Inhimself to a certain 'reality' concerning the
an attempt to minimize distortion and memory making of the decision and thus it was easier
failure problems, he (all the CEOs were men)
for the researcher to check the validity of
responses in the closed-ended questions that
was asked for recent decisions. The vast majority
of the decisions were taken less than 6 months followed.
prior to interview.
When this informal discussion was completed
The CEO was asked to give a brief description
of each decision and the process followed in
interviewees were handed the second decision-
specific questionnaire designed to measure the
making it, and to name all the key participants
as well as the manager with the most intimatedimensions of the process. Their responses were
knowledge of the process, e.g., the project cham-
always checked against the initial CEO interview
pion (this methodology follows that of Hickson
and the paper trail. If the answers differed from
et al., 1986). In most cases we had access towhat
the these sources suggested, we were able to
paper trail documenting the decision and its question
proc- the manager's recollections. A thorough
ess, before interviewing the designated manager:
discussion followed and the manager usually jus-
investment decisions tend to be better documented tified his/her point of view.
than other strategic decisions (Marsh et al., Where interviewees felt they had insufficient
1988). This aided understanding, helped to form information (e.g., a production manager could not
a clearer picture of the process, and also helped
reliably recall aspects of the financial evaluation
in checking managers for possible memory failureor the marketing issues), we conducted further
and ex post rationalization (Huber and Power, interviews with the relevant informants (e.g., fi-
1985). nance or marketing director) to clarify these spe-
Semistructured interviews were conducted with cific points. Their responses in these specific
the most knowledgeable manager (Huber and points were used as better approximating reality.
Power, 1985). We followed a 'funnel sequence' These incidents were rare because people selected
had actively participated in the process and thus
whereby the interview started with a semistruc-
tured discussion using open-ended questions had a thorough understanding of what actually
happened. Six decisions out of 70 used this
(Bouchard, 1976). This approach was preferred
for the following reasons: hybrid multiple-informant approach.
O 1998 John Wiley & Sons, Ltd. Strat. Mgmt. J., Vol. 19, 115-147 (1998)

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APPENDIX 2: OPERATIONALIZATION OF SD PROCESS DIMENSIONS
SD-making Operationalization Variables Items in Alpha

process dimensions derived from: scale
1. Rationality/ This construct is based on Fredrickson's Fredrickson 5 0.94

comprehensiveness (1984) rationality/comprehensiveness (1984)
dimension. Five stages in the SD process
are measured (i.e., the situation diagnosis,
alternative generation, alternative
evaluation, making of the final decision,
and decision integration). For each of
these stages Fredrickson's eight rationality
elements are measured on 5-point Likert-
type scales (i.e., extent of scheduled
meetings, assignment of primary
responsibility, information-seeking
activities, systematic use of external
sources, employees involved, use of
specialized consultants, years of historical
data review, and functional expertise of
people involved). The rationality elements
for each stage are summed to create five
additive variables, each representing the
rationality/comprehensiveness dimension of
the respective stage. Summation of these
five variables results in an overall measure
of rationality-comprehensiveness of the
process.
2. Financial This is one of the two factors extracted
Ideas expressed 6 0.90
reporting from a factor analysis investigation by:
King (1975)
involving 16 items measuring the degree
of reporting activities in support of the Marsh et al.
(1988)
SD. This specific factor variable measures
Stein (1980)
the degree of financial reporting activities
and consists of six items. Sample items
include: (1) use of NPV-IRR methods, (2)
inclusion of pro forma financial
statements, (3) detailed cost studies, (4)
incorporation of the SD into company-
wide financial plans. The measurement
scale ranges from '1' absolutely false to
'7' absolutely true.
3. Rule This construct is one of the three factors Ideas expressed 7 0.89
formalization extracted from a factor analysis by:
King (1975)
investigation involving 17 items measuring
Stein (1980)
the degree of formalization/standardization
of the process. This specific factor
variable incorporates seven items and
measures the degree of rule formalization
during the making of the SD.
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Sample items include: the degree to which

there exists a written procedure guiding
the process, (2) existence of a formal
procedure to identify alternative ways of
action, (3) formal screening procedures,
(4) formal documents guiding the final
decision, (5) predetermined criteria for SD
evaluation. The measurement scale ranges
from '1' absolutely false to '7' absolutely
true.
4. Hierarchical This additive variable measures the extent Ideas expressed 5 0.93
decentralization of vertical decentralization of the decision- by:
making during all the phases of the Tannenbaum
process. It is based on the total amount(1968)
of
participation of various hierarchical levels
Grinyer et al.
and departments in each of the previously(1986)
mentioned five phases of the process. The
five hierarchical levels include owner-
main shareholder, CEO, first-level
directors, middle management and lower
management. Responses are taken on a 5-
point Likert-type scale, anchored with '1'
no involvement at this stage to '5' active
involvement and influence. By adding all
hierarchical layers for every stage in the
process, five additive variables were
obtained, each measuring the hierarchical
decentraliztion in the respective stage.
Summing all five variables resulted in an
overall measure of hierarchical
decentralization.
5. Lateral Lateral communication was measured in aIdeas expressed 5 0.87

communication similar way to hierarchical by:
Tannenbaum
decentralization, except that it measures
the degree of balanced participation of(1968)
all
major departments in the adopted five
stages of the process. The major
departments include: finance-accounting,
production, marketing-sales, personnel,
and purchasing department.
6. Politicization This variable results from the addition of Pettigrew 4 0.77
four 7-point Likert-type scales measuring(1973)
the extent of coalition formation, the Mintzberg et al.
degree of negotiation taking place among (1976)
Hickson et al.
major participants, the degree of external
resistance encountered and finally the (1986)
degree of process interruptions
experienced. Scales range from '1'
absolutely false to '7' absolutely true.

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7. Problem- Three items comprise this variable Eisenhardt and 3 0.71

solving measuring the degree of problem-solvingBourgeois
dissension dissension during the initial stages of the(1988)
process: the degree of disagreement on Butler
'1 et al.
the objectives sought by the decision, '2'(1991)
the proper methodology to follow and '3'
the proper solution to the problem.
APPENDIX 3: OPERATIONALIZATION OF DECISION-SPECIFIC,

MANAGEMENT, AND CONTEXTUAL VARIABLES
Generic decision- Operationalization Variables Items in Alpha

specific derived from: scale
characteristics
1. Magnitude of Composite variable consisting of eight 5- Ideas drawn 8 0.81

impact point Likert-type scales measuring the from:
impact of SD on the following Beach and
organizational areas: (1) profit, (2) quality Mitchell (1978)
of products/services, (3) total production, Schneider and
(4) cost, (5) sales, (6) market share, De Meyer
(7) call for changes in existing programs (1991)
and (8) organizational adjustment required
to serve the decision.
2. Threat/crisis Composite variable consisted of two scales

Billings et al. 2 0.68
measuring the extent to which the SD(1980)
is
perceived as a crisis situation and the
second the threat of financial loss.
3. Decision Composite variable consisting of three Beach

7- and 3 0.56
uncertainty point Likert-type scales measuring the Mitchell (1978)
uncertainty about actions to be taken,
general uncertainty surrounding the
decision, and uncertainty concerning the
information to be collected.
4. Frequency/ Composite variable consisted of two scales

Dutton et al. 3 0.54
familiarity measuring the frequency of occurrence, the
(1989)
familiarity of the SD to the company, Beach
and and
the extent to which the SD was part ofMitchell (1978)
another major decision.
5. Pressure Extent of pressure exerted either on the Beach and 2 0.70
organization or the time pressure felt by Mitchell (1978)
the participants in the SD. Schneider and
De Meyer
(1991)
Billings et al.
(1980)
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6. Planned vs. ad Sinha (1990)

A 5-point Likert-type variable measuring 1
hoc the extent to which the SD emerged
through some type of formal planning
effort.
Top management Operationalization Variables Items in Alpha

characteristics derived from: scale
1. CEO's need for Composite variable consisted of six 7- Steers and 6 0.70
achievement point Likert-type scales measuring an Braunstein
active attitude towards decision-making (1976)
and personal goal setting. Eysenck and
Wilson (1975)
2. CEO's risk Composite variable consisted of 15 5-point From Jackson's 15 0.73
propensity Likert-type scales measuring the Personality
psychological disposition of the CEO Inventory (3
towards risk. Particular care was exercised out of 8 items)
to select items approximating the reality and Eysenck
of business situations and represent and Wilson's
'monetary risk'. Risk Propensity
scale (1975)
3. CEO's number Ideas drawn
Continuous variable measuring the number 1
of years with from:

of years the CEO is with the company.
the company Hambrick and
Mason (1984)
Fredrickson and
Iaquinto (1989)
4. CEO's level of One 5-point scale measuring CEO's level
Ideas drawn 1
education of education. from:
Hambrick and
Mason (1984)
Haley and
Stumpf (1989)
5. Top Here the CEO was asked to rate the Adapted from 3 0.70
management'aggressive
s philosophy of his TMT onKhandwalla
aggressive (1977)
three dimensions (attitude of the whole
philosophy top management team towards innovations,
risky projects, and competitors).
6. Top Percentage of managers, down to the level 1
management of departmental heads who are university

team's level of graduates.
education

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External corporate Operationalization Variables Items in Alpha

environment derived from: scale
1. Environmental Composite variable consisting of four 5- Miller and 4 0.86

heterogeneity point Likert-type scales measuring Friesen (1983)
significant differences between the
products/services offered in relation to:
(1) customer's buying habits, (2) the
nature of competition, (3) market
dynamism, (4) market uncertainty.
2. Environmental Composite variable consisting of eight Achrol and 8 0.81
dynamism distinct scales referring to three derived Stern (1988)
subconstructs: (1) dynamism in marketing
practices, (2) competitor dynamism and
(3) customer dynamism. Each scale was
measured in a 7-point Likert-type scale
ranging from '1' (no change) to '7' (very
frequent changes).
3. Environmental Composite variable consisting of three 5- Khandwalla 3 0.69
munificence- point Likert-type scales measuring the (1977)
hostility degree of environmental (1) riskiness,
(2) stressfulness, (3) dominance over the
company.
Internal firm Variables Items in Alpha

characteristics derived from: scale
1. Planning Composite variable consisting of seven 5- Adapted from 7 0.89

formality point scales ranging from '1' strongly Wood and
disagree to '5' strongly agree. The scales LaForge (1981)
measure the extent of:
(1) formal functional area planning,
(2) active departmental participation,
(3) formulation of quantified goals,
(4) formalization of company objectives,
(5) existence of planning group or
department,
(6) development of a favorable planning
climate, and
(7) existence of detailed action plans.
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Corporate Operationalization Variables Items in Alpha

performance derived from: scale
1. Return on Return on assets (ROA) averaged for 5 Bourgeois

assets years, to decrease to chance of a 1-year (1980)
aberrtaion influencing results. Another
consideration was to control for industry
effects on performance. Since three
different industrial sectors are represented
in the sample each of the resulting ROA
measures was divided by the mean ROA
of the respective sector, in an attempt to
control for sectoral influences.
2. 'Growth' in Percentage change in 'growth' in profitsFredrickson

profits over a 5-year period. (1984)
All composite variables were averaged by the number of scale items in the construct.

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See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/36397742
The Middle Management Perspective on Strategy Process:

Contributions, Synthesis, and Future Research
Article in Journal of Management · December 2008

DOI: 10.1177/0149206308324326 · Source: OAI
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The Middle Management Perspective on
Strategy Process: Contributions, Synthesis,
and Future Research
Bill Wooldridge*
Isenberg School of Management, University of Massachusetts-Amherst, Amherst, MA 01003
Torsten Schmid
Institute of Management, University of St. Gallen, 9000 St. Gallen, Switzerland
Steven W. Floyd
Institute of Management, University of St. Gallen, 9000 St. Gallen, Switzerland
During the past 25 years, a substantial amount of research in strategic management has focused
on the contributions of middle management. Although useful, the research is characterized by
considerable diversity in terms of focal constructs and relationships. The purpose of this review
is to organize this research and identify important constructs, relationships, and contributions.
The review serves not only to catalog the state of the art and accumulate knowledge; it also
facilitates the critique necessary for charting directions and enhancing the cumulative nature of
future research.
Keywords: middle managers; strategy process; middle management perspective; strategy

formation
During the past 25 years, the scope of strategy process research has been expanded to
include not only top managers but also middle managers and other mid-level professionals
whose activities and behaviors have important consequences for how strategy forms within
organizations. Research focused on middle managers has added much to our understanding
*Corresponding author: Tel.: 413-545-5697
E-mail address: wooldridge@mgmt.umass.edu

Journal of Management, Vol. 34 No. 6, December 2008 1190-1221
DOI: 10.1177/0149206308324326
© 2008 Southern Management Association. All rights reserved.
1190
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Wooldridge et al. / Contributions of Middle Management 1191
of strategy and change and offers great promise for generating future insight. The roles and
influence of middle managers have been studied in research on corporate entrepreneurship
(Bower, 1970; Burgelman, 1983b), innovation and organizational learning (Kanter, 1982;
Nonaka, 1994; Nonaka & Takeuchi, 1995); strategy implementation (Balogun & Johnson,
2004; Guth & MacMillan, 1986; Huy, 2002), and strategy-making processes (Currie &
Procter, 2005; Dutton & Ashford, 1993; Floyd & Lane, 2000; Pappas & Wooldridge, 2007;
Wooldridge & Floyd, 1990). Although research questions vary widely, this work shares the
premise that middle managers are central to explaining key organizational outcomes. That
is, this research takes what we call a “middle management perspective.”
Several motivations have been described in the literature as the basis for a middle manage-
ment perspective (Floyd & Wooldridge, 2000), three of which we highlight here. First, because
of their intermediate position in the organization, middle managers serve as important inter-
faces between otherwise disconnected actors and domains (Floyd & Wooldridge, 1999;
Nonaka, 1991), for example, top and operating-level managers. Whereas early acknowledg-
ments of this influential position focused on managers as sources of resistance (e.g., Guth &
MacMillan, 1986), later accounts highlighted their potential as agents of change (e.g. Huy,
2002). Second, as a complement to the view of elites as a key source of influence on organi-
zational outcomes (Hambrick & Mason, 1984), middle management research posits an
alternative model of managerial agency and strategic choice. This view acknowledges that
complex, geographically dispersed organizations cannot be managed by single actors or even
small groups but require distributed and interactive leadership throughout the organization,
with middle managers as important mediators between levels and units (e.g., Balogun &
Johnson, 2004). Third, research suggests middle managers are more likely than top managers
to penetrate the causal ambiguities surrounding relationships between an organization’s capa-
bilities and its economic performance (King & Zeithaml, 2001). As a result, they may play a
greater role than top managers in activities associated with capability development. Put differ-
ently, middle management is a necessary point of observation from which to study the organi-
zational process associated with building and renewing capabilities.
In 1984, Hambrick and Mason articulated the need for an upper echelons or top manage-
ment team (TMT) perspective. Their article stimulated considerable research, and it can be
argued that this body of work represents some of the most coherent and cumulative research
in the organizational sciences. In contrast, the cumulative impact of research from a middle
management perspective is less apparent. To a large degree, this is due to differences in how
certain issues have been approached from a middle management perspective as compared to
the upper echelons perspective. First, upper echelons research is clear about what upper ech-
elons means—the senior executives who make up firms’ dominant coalition (Carpenter,
Geletkanycz, & Sanders, 2004). In contrast, identifying the most strategically influential and
relevant mid-level professionals in an organization is more problematic, and understanding
why some middle managers are involved in and influence the process more than others
remains an important research issue (e.g., Pappas & Wooldridge, 2007). Second, for the most
part, TMT research assumes that the role of the TMT is to make strategic decisions. The
interactions and processes that underlie TMT decisions have generally been left in a “black
box” (Carpenter et al., 2004). In contrast, work from a middle-level perspective views strat-
egy making as a social learning process, and rather than keeping the process in a black box,

1192 Journal of Management / December 2008
exploring the strategy-making process to understand how managers are involved in and
influence strategy is a key part of middle management research. Finally, because of its
heightened focus on process, identifying and understanding outcomes relevant to the middle
management perspective is more problematic than identifying outcomes relevant to top man-
agement decisions. Although both perspectives make linkages to outcomes affecting the
organization as a whole, TMT research focuses exclusively on such effects, whereas middle
management research is also concerned with intermediate outcomes such as subunit perfor-
mance and initiative development.
Given this added complexity, it is not surprising that strategy research from a middle man-
agement perspective has addressed a wide variety of issues and used a variety of methodolog-
ical approaches. This has led to a somewhat fragmented stream of research whose cumulative
impact is often difficult to discern. The purpose of this review is to organize this research and
identify important constructs, relationships, and contributions. The review serves not only to
catalog the state of the art and accumulate knowledge; it also facilitates the critique necessary
for charting directions and enhancing the cumulative nature of future research.
The focus of our review is research that investigates middle management’s role in strat-
egy formation. This focus is informed by, but deliberately excludes, managerial work stud-
ies that examine middle managers’ more general job requirements and status (for a review,
see, e.g., Dopson & Stewart, 1990). We focus exclusively on strategy research where middle
management is a unit of analysis in theory development or a point of observation for empir-
ical study. We believe the advantage of this perspective stems from its potential to advance
our understanding of intraorganizational processes underlying strategy formation in complex
settings, including organizational learning and change. We draw on these adjacent literatures
to describe the context for middle management, but change and organizational learning are
much broader domains. Our review draws on this work only to the extent that it informs the
middle management perspective. This sets a boundary condition, on one hand, but it
also yields insight into how research in the broader domains may be advanced from a more
specialized perspective.
In the literature reviewed here, the term middle management is understood rather broadly.
It extends to managers located below top managers and above first-level supervision in the
hierarchy (e.g., Dutton & Ashford, 1993; Uyterhoven, 1972). The distinguishing feature of
middle management, however, is not where they sit in the organization chart. Rather, what
makes middle managers unique is their access to top management coupled with their knowl-
edge of operations. It is this combination that enables them to function as mediators between
the organization’s strategy and day-to-day activities (Nonaka, 1994). Such a functional desig-
nation comprises different types of mid-level professionals, including general line managers
(e.g., divisional or strategic business unit heads), functional line managers (e.g., vice presidents
of marketing) and team- or project-based executives (e.g., leaders of strategic initiatives).
The remainder of this article is organized as follows. First, we provide a brief historical
account of how literature on the strategy process evolved to support a middle management
perspective. We think describing the historical roots of this perspective is important to under-
standing how it has developed and where it might be going. We then provide a review of
existing theory and research organized around behavioral and cognitive accounts that have
been offered to explain middle management influence in strategy making and to identify the

Table 1
Foundations of the Choice and Social Learning Perspectives in Strategy
Choice Perspective Social Learning Perspective
Intellectual roots Chandler (1962); Child (1972); Ansoff Mintzberg (1978), Bower (1970), Kanter
(1965), Andrews (1971), M. Porter (1982), Schilit (1987), Burgelman
(1980), Hambrick & Mason (1984) (1983a, 1983b)
Process model Decision making Social learning process
Key actors Top management team Multiple actors with middle managers as important
mediators between levels and units
Process Analysis, decision making, and Generating ideas, initiative taking, strategic
mechanisms implementation reintegration
Context Complexity manageable by one central Complexity beyond single actor’s ability
actor or team to integrate fragmented power and
knowledge base
consequences of such influence for organizational outcomes. On the basis of this review, we
propose a framework to integrate existing contributions and to guide future research. This
becomes the basis for our discussion of high-priority research questions and important the-
oretical and methodological challenges facing scholars in this domain.
Foundations of the Middle Management Perspective
The recognition in the research literature of middle management’s relevance to strategy

began in the 1970s. Up to that point, conceptualizations of management generally, and strat-
egy in particular, assumed a top-down analytical process that separated decision making from
action. As Table 1 shows, this upper echelons perspective grew out of the strategy field’s intel-
lectual roots in economics and organizational theory. From these early foundations emerged
a model of strategy making shown in the table as the “choice perspective.” Here, strategy
making is assumed to be a decision-making process involving one top manager or a relatively
small group of upper-level actors, and the central questions revolve around how to formulate
and implement high-quality strategic decisions. From the choice perspective, the role of
middle managers in the formulation of strategy is limited to providing input. The primary role
of middle management from this perspective is implementing strategy.
The distinction between formulation and implementation that is central in the choice per-
spective became one of the launching points for Mintzberg’s (1978) seminal critique of the
early literature. Mintzberg maintains that separating formulation from implementation
imposes a false division of work between top managers (i.e., thinking) and other organiza-
tional members (i.e., doing) in strategy formation. Mintzberg’s (1978) own framework
begins with a focus on realized strategy, the actual pattern of actions and decisions in the
organization. He argues that realized strategy forms from emergent influences at middle and
lower levels of the organization, as well as from deliberate influences emanating at the top
(Mintzberg & Waters, 1985). Strategy making from this perspective is less a process of
choice and more a matter of social learning, that is, managers and others in the organization

learning how to adapt to a changing environment. This view opens up the strategy process
for substantive, emergent influence by middle managers.
Mintzberg was not alone in recognizing an expanded role for middle-level actors in strat-
egy development. Bower (1970) and Kanter (1982) both provided richly detailed, book-length
case studies of middle managers defining as well as implementing strategy. Schilit and Locke
(1982) were also early to recognize the importance of upward influence by middle-level man-
agers, and Schilit’s (1987) study was one of the first to examine middle managers’ strategic
influence in a large sample. Schilit’s (1987) results were encouraging. Overall, he found that
attempts by middle management to influence strategy were often successful.
Starting with another rich data set, Burgelman (1983a) developed an evolutionary model
of strategy making, and in so doing, provided a theoretical basis for a new division of work
between middle and top management in strategy making. In this model, internal selection
mechanisms (i.e., resource allocation processes) are seen to govern the development of strat-
egy, and the substance of strategic change evolves on the basis of variation in the form of
autonomous strategic initiatives. The impetus for autonomous initiatives stems not from top
managers but from idea generation at lower levels coupled with middle managers who rec-
ognize and champion these ideas as new strategic initiatives and/or corporate new ventures.
In this context, rather than formulating changes in strategy, the role of top managers is to
consider and ratify middle management initiatives and to create the necessary process archi-
tecture for an adaptive strategy process (Burgelman, 1983a).
This early work set the stage for a number of studies in the 1990s and beyond that sup-
port a broader view of the relationship between middle management activity and strategy.
Wooldridge and Floyd (1990), for example, hypothesized that middle management could
influence strategy either by improving the quality of decisions or by increasing the efficiency
of implementation. Overall, their findings showed effects on the quality of decisions to be
more important than those flowing from improved implementation. Consistent with a more
pervasive influence by middle-level actors, Hart (1992) incorporated the involvement of
organization members as one of three dimensions that characterize archetypes of strategy
making (Hart, 1992). As a result of his theorizing, Hart (1992) explicitly called for research
that assessed not only top but also middle- and operating-level managers’ perceptions of
strategy (p. 346). Bartlett and Ghoshal’s (1993) later depiction of management responsibili-
ties in Asea Brown Boveri (ABB) is consistent with Hart’s theory. In this study, frontline
managers who were once simply implementers at ABB became identified as the primary
source of entrepreneurial initiatives.
Along with previous studies, Bartlett and Ghoshal’s (1993) research set the stage for a
redefinition and realignment of the strategic roles performed at various levels of manage-
ment. Middle managers, once viewed as narrowly focused on control, came to be recognized
as a resource for frontline managers, coaching and supporting their entrepreneurial activities.
Top managers, having delegated both operational decision making and strategic initiative,
were now seen as focused more on managing the entrepreneurial process, for example, devel-
oping broad objectives and setting performance standards. Andersen’s (2004) later study of
185 organizations provides additional confirmation of this “radically decentralized” organizing
principle in the broader population of organizations. In particular, he found that for large

organizations in dynamic environments, a wider distribution of strategic decision-making

authority is associated positively with organizational performance.
A more substantive position for middle managers in strategy process thus emerged in con-
junction with a new model of organization; one that is flatter and more entrepreneurial than
classical forms and that competes in knowledge-intensive environments. Work such as
Burgelman’s (1994) study tracing the evolution of Intel’s exit from the memory business
shows the importance of middle management as vertical mediators between top and operat-
ing levels in the development of core competence. Complementing this, Bartlett and Ghoshal
(1993) identified middle managers not as vertical links but as horizontal integrators, helping
to ensure the distribution of knowledge-based resources throughout the organization.
Nonaka’s (1994) influential paper on knowledge creation may be seen as a synthesis of the
vertical and horizontal influences of middle management. Nonaka argues forcefully that mid-
dle managers influence the strategy process by mediating vertically between the conceptual
knowledge at the top and knowledge of operations at the bottom of the organization. In addi-
tion, however, his theory describes a spiral where middle managers interact in both horizontal
and vertical directions to combine and recombine tacit and explicit forms of knowledge.
Indeed, for Nonaka (1991, 1994), the vertical and horizontal interactions of middle managers
are the primary impetus of organizational knowledge creation, and hence, strategic change.
In sum, the view of middle managers’ place in strategy development has developed histor-
ically from one where they essentially take direction from, and provide input to, top manage-
ment to one where they are at the center of the two processes that have become the basis of
strategy formation—knowledge creation and the development of core competence. The social
learning perspective provided both motivation and theoretical grounding for this shift and con-
tinues to be the basis for much contemporary work on middle-level strategic management.
Review of the Literature
Studies from the middle management perspective spring from concerns about a number of
different phenomena, and research has accumulated around three broad topics: strategic roles
and their antecedents, middle managers’ involvement in strategy and organizational cognition,
and the relationship between middle management strategic behavior and organizational outcomes.
Our review proceeds by summarizing work within each of these streams. Several studies make
contributions across these categories and are therefore discussed in more than one section.
Table 2 summarizes prior research in chronological order and indicates each study’s focus in
terms of one or more of these three categories. As the table suggests, studies have investigated
a wide range of constructs and adopted a variety of methodological approaches.
Middle Managers’ Strategic Roles and Their Antecedents
Synthesizing insights from earlier literature (especially Burgelman, 1983a, 1983b;

Mintzberg, 1978; Mintzberg & Waters, 1985), Floyd and Wooldridge (1992, 1996) articulated
four strategic roles of middle managers. Each role is distinguished by a unique combination
of cognitive and behavioral components. The traditional role, implementation, for example,

Table 2
1196
Chronological Summary of Strategy Research From a Middle Management Perspective
Studies/Year Research Focus Theoretical Lens Method Core Findings
Guth & Middle management Expectancy theory; Correlation analysis; 90 middle The article explains interventions of middle
MacMillan outcomes micro politics managers' interventions into management against top-level decisions as
(1986) interdepartmental decisions driven by perceived conflicts of interest. The
sources of middle management counter
effort as well as remedial top management
tactics are identified.
Wooldridge & Middle management Strategic decision Conceptual The relationship between strategic consensus
Floyd (1989) cognition and making; strategic and firm performance is elaborated by
involvement consensus analyzing strategy processes. Consensus
Middle management among middle managers is seen to be more
outcomes important in incremental than synoptic
contexts.
Wooldridge & Middle management Strategic decision Correlation analysis; 20 Although the study did not find links between
Floyd (1990) cognition and making; strategic banking and manufacturing middle management consensus and
involvement consensus firms performance, middle managers’ involvement
Middle management in strategic planning was associated with
outcomes higher levels of consensus and financial
performance.
Westley (1990) Middle management Conversation theory; Conceptual; 3 illustrative cases The article examines how middle managers’
cognition and interaction rituals; in one large, manufacturing exclusion from strategy conversations in a
involvement emotion work firm bureaucratic organization leads to

demotivation, alienation, and conflict.
Conditions that may increase and sustain
feelings of inclusion and motivation are
discussed.
Beatty & Lee Strategic roles of middle Leadership styles Case study; implementation of The study indicates transformational leadership
(1992) management computer-aided systems in 3 by middle management to be more effective
U.K. and Canadian firms in overcoming barriers to organizational
change than transactional leadership.
(continued)
Table 2 (continued)
Floyd & Strategic roles of middle Strategy process; role Factor and correlation analysis; The study builds a typology of four middle
Wooldridge management theory 259 middle managers in 25 management roles in strategy (championing,
(1992) organizations synthesizing, facilitating, implementing) and
links these to organizational strategy. Level
and type of middle management strategic
involvement are found to vary with type of
strategy.
Dutton & Strategic roles of middle Upward influence; Conceptual The article examines how characteristics of top
Ashford management social problem and middle-level managers, timing, and the
(1993) theory; impression process used affect the success of middle
management managers’ issue-selling efforts.
Burgelman Middle management Resource allocation; Longitudinal case study of one A firm’s effective exit from its core business
(1994) outcomes (strategic organization major high-technology firm was found to result from emergent strategy.
roles of middle ecology Middle managers’ technology choices laid
management) the foundation for the redefinition of
corporate strategy and core competencies.
Mangaliso (1995) Middle management Information theory; Regression analysis; 69 middle Decentralization associated with increased
cognition and contingency theory managers in one subsidiary strategic usefulness of information (in terms
involvement of a large, diversified of aggregation) as perceived by middle
corporation managers in highly uncertain settings.
Dutton, Ashford, Strategic roles of middle Upward Influence; Inductive qualitative study and The article shows how managers’ interpretation
O'Neill, management impression factor analysis; one large of the overall supportiveness of the
Hayes, & management telecommunication firm organizational context influences their

Wierba (1997) decisions to sell issues. Managers are not
fully autonomous agents but rather
conscious of aligning themselves with the
social context.
Floyd & Middle management Role theory; Regression analysis; 259 Middle managers in boundary-spanning
Wooldridge outcomes organization middle managers from positions reported higher levels of strategic
(1997) ecology; boundary 25 organizations influence activity. Firm performance was
spanning associated with more uniform levels of shift
(continued)
1197
Table 2 (continued)
1198
downward strategic influence on the part of

middle management, and more varied levels
of upward influence.
Floyd & Strategic roles of middle Evolutionary theory; Conceptual Corporate entrepreneurship is conceptualized
Wooldridge management knowledge theory; as a multilayered process with middle
(1999) social networks managers as key actors who build and
integrate knowledge domains, social
networks, and resources.
Floyd & Lane Strategic roles of middle Evolutionary change; Conceptual Middle managers are theorized to more likely
(2000) management role theory; experience conflict between strategic roles
organizational than other managerial levels. Role conflict is
learning inevitable in complex settings but can be
reduced through control mechanisms
appropriate to the environment.
Dutton, Ashford, Strategic roles of middle Upward influence; Inductive qualitative study; 82 The article refines issue-selling theory: The
O’Neil, & management impression issue-selling episodes of 42 selling process was found to be more
Lawrence management middle managers in one, political and contextually embedded.
(2001) large, not-for-profit hospital Linking the initiative to organizational
legitimacy, value, and relevance increased
selling success. Packaging was more
complex, but sellers did not use emotional
appeals, and impression management
concerns seemed less relevant.

King & Zeithaml Middle management Resource-based view Correlation analysis and CEO The study examines managerial perceptions of
(2001) cognition and interviews; 224 executives in causally ambiguous firm competencies: Top
involvement 17 textile manufacturing managers in high-performing firms were
firms and hospitals more likely to believe that competencies
were causally ambiguous. Middle managers
demonstrated a high degree of consensus
regarding linkages between competencies
(continued)
Table 2 (continued)
and performance, indicating their important

role in intrafirm factor mobility.
Hornsby, Strategic roles of middle Corporate Factor analysis; 761 middle The article identifies five organizational factors
Kuratko, & management entrepreneurship managers in 17 that support midlevel corporate
Zahra (2002) organizations entrepreneurship: top management support,
work discretion/autonomy,
rewards/reinforcement, time availability,
organizational boundaries.
Huy (2002) Strategic roles of middle Emotion management Longitudinal case study on Middle managers are shown to “balance”
management radical change in one, large emotions during radical change, helping
information technology (IT) groups to adapt by committing passionately
service firm to individual change projects and,
simultaneously, attending to change
recipients’ needs for continuity.
Marginson Strategic roles of middle Managerial control Longitudinal case study of The article details effects of managerial control
(2002) management systems; emergent strategic change in a U.K. systems on midlevel strategic initiative:
strategy telecommunications firm Belief systems created a general climate for
corporate entrepreneurship rather than
instigating specific ideas. Administrative
systems led to separation of entrepreneurial
and support roles. Tensions resulting from
multiple key performance indicators were
resolved by prioritizing single measures.

Balogun & Middle management Sensemaking; schema Longitudinal case study in The article traces the development of middle
Johnson cognition and change large, privatized utility firm; managers’ mental models during an imposed
(2004) involvement managerial diaries shift from hierarchical to decentralized
organization. Findings indicate a
contingency logic between change type and
schema development. Middle mangers were
found to rely on informal negotiations with
(continued)
1199
Table 2 (continued)
1200
peers to interpret and implement change

because of distant top managers.
Boyett & Currie Middle management International Longitudinal case study of one In an international venture, midlevel
(2004) outcomes organization; international corporate collaboration between parent firm and new
emergent strategy venture venture was found to be critical to reconcile
strategic intent and local context.
Carney (2004) Strategic roles of middle Strategic consensus Case study; 25 semistructured Organizational structure, hierarchy, and locus
management interviews. of control were found to affect how middle
managers perceive their role in the strategy
process.
Ketokivi & Middle management Strategic planning; Factor analysis; 164 The study provides large-scale evidence on
Castañer cognition and behavioral theory manufacturing plants how participation and communication in
(2004) involvement strategic planning complemented each other
in achieving goal congruence among middle
managers.
Kuratko & Middle management Corporate Conceptual To impede unethical behavior by middle
Goldsby outcomes entrepreneurship; managers in corporate entrepreneurship,
(2004) ethics a framework is developed that identifies
barriers to corporate entrepreneurship,
resultant ethical dilemmas, and remedial
HR practices.
Currie & Procter Strategic roles of middle Role orientation, role Interpretative case study; three Expectations of key stakeholders are identified as
(2005) management ambiguity, role U.K. hospitals primary antecedents to middle management’s

conflict strategic contributions. Inconsistent cues from
stakeholders caused managers to be reluctant
to perform needed role (role ambiguity) and
created role conflict.
Kodama (2005) Strategic roles of middle Knowledge creation; Case study; new product This study describes middle management’s role
management leadership development in 5 IT and in building and leading informal strategic
multimedia firms networks in and across firms for open
innovation.
(continued)
Table 2 (continued)
Kuratko, Ireland, Strategic roles of middle Corporate Conceptual The article conceives a model of middle
Covin, & management entrepreneurship; management’s role in corporate
Hornsby motivation entrepreneurship, depicting organizational
(2005) antecedents, entrepreneurial actions, and
(individual & organizational) outcomes.
Lines (2005) Middle management Organizational Regression analysis; 189 Social accounting and participative strategic
cognition and learning middle managers planning were found to increase
involvement organizational learning at middle levels
during strategic change.
Ling, Floyd, & Strategic roles of middle International Conceptual The article develops an acculturated view of
Baldridge management management; issue selling. Managers socialized in
(2005) cultural syndroms different cultures will vary in their
perception of the context and how they
choose to sell issues.
Mair (2005) Middle management Contingency theory Structural equation model; data The study reports business unit performance
outcomes on 118 managers and units effects of middle managers’ strategic
of one large European activity, their demographic characteristics,
financial service firm and their immediate competitive
environment.
Mantere (2005) Strategic roles of middle Strategy as practice Interviews of 158 champions in The study identifies a tension between
management 12 organizations recursive and adaptive practices that enable
and disable strategic champions.
Rouleau (2005) Strategic roles of middle Role theory; micro Interpretative case study of The study identified four micro practices

management practice strategic change in one managers use to interpret and sell strategic
Canadian clothing company change: translating the orientation,
overcoding the strategy, disciplining the
client, justifying the change.
Meyer (2006) Middle management Change dynamics Longitudinal case study of one The article shows that merger implementation
outcomes merger between four may result less from conflicts between
European financial service merger partners than from intrafirm tensions
firms between middle management groups and top
managers’ inability to mediate them.
1201
(continued)
1202
Table 2 (continued)
Laine & Vaara Middle management Strategic discourse; Interpretative case study of one In a broader analysis of competing
(2006) cognition and micro politics European engineering and intraorganizational discourses in strategy
involvement consulting company development, middle management was
found to resist corporate-level attempts to
control strategy by initiating a separate
strategy discourse to increase midlevel
influence and autonomy.
Pappas & Strategic roles of middle Social network theory Social network analysis; 89 The article suggests specific relationships
Wooldridge management middle managers in U.S.- between alternative forms of network
(2007) based urban hospital centrality and particular elements of the
strategic renewal process.
Sillince & Middle management Cognitive framing; Inductive: Longitudinal case A middle management team implementing a
Mueller outcomes linguistics study of a middle strategic initiative was found to reframe
(2007) management team responsibilities and expectations based on
the team’s changing goals. Unclear top
management intent favored midlevel
opportunism.
Mantere (2008) Strategic roles of middle Role expectations, Inductive analysis of 262 The article shows how role expectations can
management conflict, managerial middle management both enable and constrain middle
agency interviews from 12 European management strategic behavior, suggesting a

organizations reciprocal role theory. It identifies eight
enabling top management actions: narration,
contextualization, resource allocation, respect,
trust, responsiveness, inclusion, referring.
Vilà & Canales Middle management Strategic planning Longitudinal case study; Middle managers’ active participation in
(2008) cognition and strategic planning process at strategic planning was found to increase
involvement regional automobile club their appreciation of priorities and goals and
coordination during implementation.
springs from thinking that is consistent with existing strategy and from attempts to integrate
subordinates’ activities around this strategy. As synthesizers, middle managers interpret
information and channel it upward to top management. Championing also involves upward
influence, but in this role, middle management’s divergent thinking has the potential to
reshape upper management’s concept of strategy. Finally, as facilitators, middle managers
encourage organizational actors below and around them to engage in idea generation and
other experimental efforts.
Consistent with this framework, and especially the championing and synthesizing roles,
a substantial amount of work has been done elaborating and examining middle managers’
issue-selling role (Dutton & Ashford, 1993; Dutton, Ashford, O’Neil, Hayes, & Wierba,
1997; Dutton, Asford, O’Neil, & Lawrence, 2001; Ling, Floyd, & Baldridge, 2005). Through
issue selling, middle managers help shape the strategic agenda by influencing which issues
come to the attention of top management. In a series of studies, Dutton and her colleagues
explore how managers assess the organizational context for issue selling and the “moves”
associated with both successful and unsuccessful issue-selling attempts. Overall, this
research shows that how issues are packaged or framed, who is involved in the selling effort,
the process used, and the timing of a selling effort all have a significant impact on the effec-
tiveness of issue selling. Building on this work Ling et al. (2005) developed a model of middle
manager issue selling in the context of a geographically dispersed multinational corporation.
Their theory suggests that the intention to engage in issue selling and the packaging strate-
gies used are subject to influence by national culture.
Whereas the literature on issue selling concerns the upward influence of middle man-
agers, other work focuses on how middle managers promote strategic change downward. In
Beatty and Lee (1992), middle managers using a transformational leadership approach were
more effective in introducing technological change than transactional leaders who focused
on technical problems to the neglect of people and organizational issues. Huy (2001, 2002)
revealed middle managers’ role in managing emotions during radical change. In what he
called an “emotional balancing” process, Huy (2002) described middle managers who help
people make sense of, and cope with, change. By attending to subordinates’ negative emo-
tions regarding downsizing, for example, middle managers cause a shift in subordinates’
emotional responses, preventing potentially incendiary reactions, and facilitating smoother
implementation of an otherwise distasteful strategy.
Recent studies also investigate how middle managers build and renew relationships across
and beyond the organization. Building on Nonaka’s (1994) knowledge creation theory,
Kodama (2005) described middle managers’ leadership role in building and integrating new
product development teams in open innovation systems. Rouleau (2005) drew from theory on
sensemaking and sensegiving (Gioia & Chittipeddi, 1991) to examine how managers in a
Canadian clothing company interpret and sell strategic change to key stakeholders, especially
the firm’s clients. In a qualitative case study, Rouleau (2005) identified four middle manager
micro-practices that sell strategic change: translating the orientation, overcoding the strategy,
disciplining the client, and justifying the change. Rouleau’s examination of these everyday
practices provides finer-grained insight into the tactics middle managers use in their roles as
interpreters and sellers of change and illustrates the potential of a micro-process approach in
middle management research.

Floyd and Lane (2000) broadened consideration of managerial strategic roles by identify-
ing and distinguishing roles for top, middle, and operating managers. Considering how these
roles are enacted in response to varying interpretations of environmental cues, these authors
highlight the potential for role conflict across levels of management. Suggesting that some role
conflict is inevitable during periods of strategic change, they develop a theory to show how
such conflict can be minimized through control mechanisms appropriate to the environmental
conditions faced by the firm. They conclude that effective strategic renewal is associated with
an organization’s abilities to adapt control systems to environmental conditions.
Consistent with this theme, in a longitudinal case study, Marginson (2002) showed how
management control systems shape middle managers’ perceptions of their strategic roles. In
particular, Marginson observed that how top management frames the strategic context (the
belief system) influences the extent to which managers are likely to initiate and develop new
strategic ideas. He also showed how administrative controls influence the location of new
initiatives and the roles managers perform, arguing that the number and types of perfor-
mance measures influence the ongoing development of strategic initiatives. Similarly, in a
study of middle manager roles in 25 not-for-profit organizations, Carney (2004) found that
organizational structure, specifically the number of hierarchical layers of management, influ-
ences managers’ perceptions of their strategic roles. Not surprisingly, flat organizational
structures are perceived by managers as enhancing communication flow and enabling involve-
ment in strategy development.
Building on this work, Currie and Procter (2005) examined middle manager role conflict
and ambiguity in three U.K. hospitals. Overall, they concluded that inconsistent expectations
and cues from key stakeholders, including top managers, create role conflict and ambiguity
among middle managers, making them reluctant to enact appropriate roles. In a similar vein,
using a more micro-process approach, Mantere (2005, 2008) observed how role expectations
can both enable and constrain middle management behavior and identified eight top man-
agement micro-practices that clarify expectations and enable middle managers to perform
various strategic roles. Each practice is built on two-way managerial interactions. The major
conclusion from this study is that consistent, reciprocal expectations between top and middle
level managers are needed to avoid role conflict and enable middle managers’ strategic
behaviors. These insights are consistent with findings of Canales (2004), who showed how
vertical and lateral managerial interactions combine to legitimize both new organizational
strategies and the contributions of individual actors.
Middle managers’ strategic roles have also been described as a part of the process of
corporate entrepreneurship (for an earlier review of research on mid-level corporate entre-
preneurship, see Fulop, 1991). Floyd and Wooldridge (1999), for example, described three
roles managers perform to create and integrate knowledge in the corporate entrepreneurship
process: identifying opportunities, developing initiatives, and renewing organizational capa-
bilities. Paralleling the literature on role conflict discussed above, Hornsby, Kuratko, and
Zahra (2002) developed a research instrument that assesses how middle managers perceive
the potential of an organization’s internal environment for supporting middle manager
corporate entrepreneurship. Specifically, they suggested appropriate rewards, top manage-
ment support, available resources, a supportive administrative structure, and a tolerance for
risk taking as factors combining to determine the extent to which middle managers feel

enabled to take on corporate entrepreneurship roles. Kuratko, Ireland, Covin, and Hornsby
(2005) integrated this research with corporate entrepreneurship and motivation theory to pro-
duce a conceptual model that links organizational antecedents to middle managers’ entre-
preneurial behavior and individual and organizational outcomes.
In addition to organizational and leadership issues surrounding how middle managers
perceive their strategic role, other research has examined the relationship between social net-
work position and the strategic roles enacted by middle managers. Floyd and Wooldridge
(1997), for example, found that managers in “boundary spanning” positions are more likely
to engage in strategic influence activity than others in more insulated positions. They theo-
rized that boundary-spanning managers mediate between the organization’s external envi-
ronment and internal constituencies and as a result have more power to exert strategic
influence. Building on this finding, Pappas and Wooldridge (2007) presented results from a
study of 89 middle managers that suggest specific relationships between alternative forms of
internal network centrality and the roles managers perform in the strategic renewal process.
Together, these studies demonstrate that managers’ network position both within and outside
the organization influences role enactment and participation in the strategy process.
In sum, the literature on middle managers’ strategic roles has identified a variety of
related ways in which middle managers contribute to strategy formation. Work in this area
has focused on identifying specific techniques managers use to influence strategy and how
organizational context affects managers’ enactment of specific roles. Role conflict, caused
by different interpretations of environmental cues and inconsistent expectations among man-
agers at different hierarchical levels, has been identified as an overarching factor accounting
for differences in the strategic roles middle managers perform. In addition, managers’ network
relationships, both within and outside the organization, have been shown to be related to how
middle managers contribute to strategy making.
Organizational Cognition and Middle Management Involvement in Strategy
The research on middle management strategic roles evolved out of a need to demonstrate
their substantive involvement in the strategy process. Coincident with this work, another
stream of research investigates relationships between such involvement and organizational
cognition. This body of work proceeds from the recognition that middle managers come with
a functional and/or subunit orientation that may influence their perceptions and turn their
behavior toward pursuit of goals that are suboptimal from the perspective of the organiza-
tion’s overall strategy (Kiesler & Sproull, 1982; Markoczy, 2001; Walsh, 1988). In the pres-
ence of shared understandings about goals and other strategic priorities, however, middle
managers may be more likely to enact influence in ways that integrate with the efforts of top
managers and others in the organization to develop strategy (Wooldridge & Floyd, 1989).
Researchers in this stream have examined this proposition and sought to elaborate our under-
standing of how middle management cognition influences and is influenced by strategy
processes. Whereas early literature focuses on the outcomes of shared cognitions in the form
of strategic consensus, more recent research considers the development of shared strategic
thinking as an outcome of the strategic process.

As already noted, the study of strategic consensus is motivated by the premise that shared
strategic thinking by managers improves the coordination and integration of their collective
efforts, leads to smoother implementation of strategy, and enhances organizational perfor-
mance (Bourgeois, 1980). (For a review of the strategic consensus literature, see Kellermanns,
Walter, Lechner, & Floyd, 2005.) Although much of this research focuses on consensus
within TMTs, a limited number of studies examine the effects of consensus among a broader
group of managers, including middle managers.
Wooldridge and Floyd (1989) argue that one reason research on TMT consensus has
failed to demonstrate a consistent consensus–performance relationship is that consensus
among middle managers and other organizational actors has not been taken into account.
They maintain that unless middle-level actors understand and are committed to top manage-
ment’s strategic goals, they are unlikely to support strategy implementation, and no amount
of top management agreement will lead to effective strategic change (Dess, 1987; Floyd &
Wooldridge, 1992). They further assert that top management consensus is more relevant to
performance in contexts characterized by a synoptic, comprehensive strategy process,
whereas more incremental, emergent processes are likely to require broader shared under-
standings that include middle managers (Wooldridge & Floyd, 1989).
Building on these theoretical arguments, Wooldridge and Floyd (1990) studied the extent
that middle managers’ agreement with top management’s strategic priorities was increased
through involvement in the strategic planning process and the effect that this had on organi-
zational performance. They measured consensus as the similarity between the priorities
expressed by the chief executive and a cohort of middle managers in each organization. In
contrast to expectations, the study did not find consensus among middle managers to be
related to organizational performance. The study did, however, demonstrate the importance
of middle management involvement as a basis for increasing such consensus. In particular,
the study found that involvement in strategy explained variance in both consensus among
managers and organizational performance. These findings are consistent with a contempo-
raneous study (Westley, 1990) that showed how middle managers’ exclusion from strategy-
related conversations led to alienation, lack of motivation to implement strategies, and
intraorganizational conflict. In contrast, two-way conversations between top and middle
managers were shown to enhance organizational responsiveness and innovation in strategy
(Westley, 1990). Laine and Vaara (2006) added a discursive perspective to research on shared
understandings. In this study, middle managers mobilized a distinctive strategy discourse—
literally starting their own strategic conversation—and thereby resisted corporate-level
attempts to define shared understandings and control the development of strategy.
Other research examining relationships between middle managers’ strategic thinking and
strategic outcomes draws from the resource-based view. King and Zeithaml (2001) assessed
the degree to which top and middle-level managers share perceptions about the causally
ambiguous nature of firm strategic competencies. Their study is motivated by a paradox.
Causal ambiguity associated with strategic competencies enhances firm performance by
reducing the threat of imitation but may also hurt performance by inhibiting the deployment
and exchange of competencies within the firm. Interestingly, in this study, top managers in
successful firms were more likely to believe that their organizations’ core competencies were

causally ambiguous. Middle managers in these same firms, on the other hand, had a clearer
view of what constituted an organization’s competences and demonstrated a high degree of
consensus on linkages between competencies and performance. From a resource-based
perspective, these results suggest that middle managers are in a better position than top man-
agers to form shared understandings about an organization’s core capabilities. As a group,
therefore, they are likely to serve as important catalysts for exploiting existing firm capabil-
ities and for exploring the development of new ones.
Although existing research has not demonstrated a consistent relationship between shared
understandings about strategy (strategic consensus) among middle managers and organiza-
tional performance, there is considerable evidence to suggest that managers’ involvement in
various facets of the strategy process enhances their knowledge, understanding, and support
of strategy. Mangaliso (1995), for example, showed how decentralized, participative processes
increase the strategic usefulness of information at middle management levels, particularly in
high-uncertainty environments. More recently, Ketokivi and Castañer (2004) provided large-
scale evidence concerning the informational and motivational benefits of participation and
communication in strategic planning. In their study, involving middle managers in the strate-
gic planning process and communicating agreed-upon priorities led to more integrated
strategic thinking throughout the organization and significantly decreased middle managers’
pursuit of position-related subunit goals over organizational goals. Stated differently, partic-
ipation in strategic planning and communication of strategic priorities functioned as com-
plements to enhance goal convergence and coordination across managers. Vilà and Canales
(2008) corroborated these findings by showing how middle managers’ more active involve-
ment in the strategic planning of a regional automobile club enhanced their appreciation of
strategic priorities and coordination during implementation. Consistent with this, Lines (2005)
reported that middle manager participation in the strategy process was positively associated
with organizational learning during top-down change.
Research from a sensemaking perspective (Gioia & Chittipeddi, 1991) also shows how
the strategy process affects middle managers’ strategic cognitions. Balogun and Johnson
(2004), in particular, show how structural change imposed by top management initially cre-
ated tension and conflicting interpretations of change among groups of middle managers. In
the face of these different clusters of sensemaking, broader shared understandings evolved
from middle managers who emphasized a common purpose. Differing cluster schemas were
eventually reconciled through lateral interactions wherein managers negotiated a new set of
shared understandings. Because top management was largely absent from this process, lat-
eral social interactions among mid-level peers are seen to be more important than top-down
communication in shaping how the organization interprets and responds to change.
Overall, research on organizational cognition and middle management involvement in
strategy emanates from the tension created by managers’ tendency to view organizational
issues from functional and subunit perspectives and the need to adopt a wider organizational
perspective when contributing to strategy. Whereas early research in this area attempted to
identify associations between managers’ shared understandings of strategy and organizational
outcomes, more recent research has examined how characteristics of the strategy process
affect the development of shared organizational cognitions.

Middle Management Activity and Organizational Outcomes
Tethering theory to organizational performance is a hallmark of strategic management

research (Rumelt, Schendel, & Teece, 1991), and consistent with this, strategy research from
a middle management perspective has investigated relationships to organization-wide out-
comes. Broadly, this work can be sorted into studies focusing on relationships between mid-
dle management activity and economic performance and between middle management
activity and emergent and realized strategy.
Research that considers middle management’s effects on an organization’s economic or
financial performance has based the relationship on relatively direct forms of involvement in
the strategy process. Wooldridge and Floyd (1990), for example, studied relationships
between middle management involvement in specific elements of strategic planning (e.g.,
goal formation, alternative consideration, etc.) and financial performance in 25 organiza-
tions. Their findings showed that middle managers’ involvement, but not their agreement
with the CEO’s priorities, was associated with financial performance. In a subsequent study
defining involvement as role enactment, Floyd and Wooldridge (1997) found that variation
among middle managers in their performance of divergent strategic roles and consistency in
integrative roles was associated with firm-level financial performance. In other words, orga-
nizational performance was enhanced in firms where some, but not all, middle managers per-
formed divergent strategic roles but where all or most performed integrative roles.
More recently, Mair’s (2005) study in a large financial services firm showed significant
relationships between middle manager behavior and demographics, and unit-level profit
growth. Specifically, the study showed that unit-level performance was improved when mid-
dle managers enacted behaviors consistent with top management strategy. In addition, higher
unit performance was associated with particular middle manager demographics, including
education, work experience, and gender.
Beyond its influence on economic performance, several studies investigate how middle
management activity influences the emergence of realized strategy (Mintzberg, 1978). For
example, noting an alignment between middle management strategic roles and strategy as
defined by Miles and Snow (1978), Floyd and Wooldridge (1992) present findings linking
middle management behavior to realized strategy. In particular, their findings suggest that a
relatively high level of championing behavior is important to the prospector’s ability to
uncover new market segments and explore new business opportunities, whereas an empha-
sis on integrative roles such as synthesizing and implementation is needed to successfully
pursue a defender strategy.
In addition to supporting strategies induced from the top, Robert Burgelman’s work has
been critical in its demonstration of how middle managers, at times, lead the process of
strategic change. In a stark example, Burgelman (1994) examined the influence of Intel’s
middle managers on the company’s emergent exit from memory markets. In the process of
exiting, Intel redefined its competitive position emergently and evolved a redefinition of its
core competencies. One of the lessons from this study is that middle management emergent
behavior often diverges from, and eventually affects, the retrospective redefinition of official
strategy by top managers. Consistent with this, Boyett and Currie (2004) showed how

middle managers in an Irish telecommunications firm, although failing to accomplish clearly

set corporate-level goals, orchestrated an emergent strategy that became the basis for the cor-
poration’s new strategic vision.
Although these examples present the connection between middle management activity and
realized strategy in a positive light, middle managers’ contributions to strategy have also been
conceptualized as a hindrance. Guth and MacMillan’s (1986) seminal work, for example,
stands in sharp contrast to the positive picture of middle management influence on realized
strategy. Their study identified several specific ways in which middle management hindered
strategy implementation, including foot-dragging and sabotage. Moreover, these authors
argued that middle manager perceptions of the strategy process were colored by individual and
unit self-interest. More recently, Meyer (2006) showed how middle managers’ individual and
group-level self-interests led to destructive interventions, resulting in the failed implementation
of a top-management orchestrated merger. In Sillince and Mueller (2007), a middle manage-
ment team in charge of implementing a top-down strategic initiative was found to reframe
responsibility for the initiative in line with the team’s goals, indicating middle management
opportunism and linguistic influencing in the absence of a clear top management mandate.
Finally, Kuratko and Goldsby (2004) provided anecdotal evidence that raises potential ethical
concerns about the influence of middle managers on realized strategy.
In sum, although there is some evidence for a positive association between middle man-
agement’s involvement in strategy and organizational outcomes, on the whole, much more
research in this area is warranted. In the aggregate, past research using cross-sectional
designs has demonstrated a positive relationship to economic performance, but little or no
research has taken a fine-grained approach to uncover important contingency relationships.
Although the theoretical basis for expecting positive outcomes is the potential influence of
middle management on how strategies form, for example, how realized strategies emerge,
relatively little research has examined this emergent process empirically, and there is some
evidence that middle management influence on strategy can, at times, be associated nega-
tively with performance.
Synthesis, Critique, and Future Research From

a Middle Management Perspective
Although each of the three research streams has contributed to a broadened understand-
ing of strategy formation and change in complex organizational settings, taken as a whole,
the cumulative impact of this literature has been limited by the variety of research issues
addressed, a proliferation of research constructs, and multiple research methodologies. At
the same time, an examination of the literature suggests an overarching framework that holds
the potential to organize existing research into a more coherent middle management per-
spective and that may serve to motivate future research. Figure 1 presents the organizing
framework that emerged from our review.
Figure 1 categorizes key constructs into antecedent conditions, processes, and outcomes.
Directional arrows have been omitted to reflect the possibility of both processual and causal
relationships and the potential for reciprocity between categories (Pettigrew, 1992). Not

Figure 1
Organizing Framework for Research from a Middle Management
Perspective
Individual Group Organization Environment

• Organizational commitment • Subunit interest • Strategy type • National culture
Antecedents
• Risk-taking propensity • Intraorganizational • Decentralization • Market & technical

• Network position power • Organizational controls dynamism
• Social capital • Embeddedness of • Reward systems • Environmental
• Relationship with top strategic initiative • Change type uncertainty
management • Institutional context
Subprocesses Initiative Development

(Selection)
Processes
Generating Ideas Integrating / Executing

(Variation) (Retention)
Process descriptions
Involvement in strategy; role enactment and conflict; issue selling;
emotional balancing; sensemaking; strategy practice
Outcomes
Intermediate Outcomes
Shared strategic understanding and commitment;
Realization of strategic change; org. learning;
Capability building, modification & deployment
Economic Performance
intended as a comprehensive catalogue, Figure 1 reflects theoretical associations within and

across categories that have been investigated or suggested in prior research and that could
fruitfully be examined in future studies. Thus, it helps to facilitate a synthesis and critique of
existing contributions and to identify high-priority areas for future research. For example, as
Figure 1 shows, prior research has emphasized individual and organizational antecedents of
middle management processes (e.g., individual risk taking and supportive organization cul-
ture as antecedents of issue selling). Antecedents at the group and environmental level have
been largely neglected. Thus, we would argue that relationships like those between the social
embeddedness of a strategic initiative group or a group’s intraorganizational power and the
initiative development process could be usefully examined. Similarly, Figure 1 lists the
process descriptions prevalent in the literature to date (e.g., involvement in strategy making,
role enactment, emotional balancing) and suggests new ways that future research might
study the mid-level process (e.g., practices). The stages of the strategic renewal process
appear in the center of process descriptions to illustrate potential intersections between
renewal stages (e.g., initiative development) and middle management processes (e.g., role

enactment). Finally, as a holistic depiction, Figure 1 is intended to signal the need for work
that embraces relationships across multiple categories (e.g., relationships between organiza-
tional controls, sensemaking, and strategic change).
In the following sections, we critique and develop suggestions for future research in
accord with each of the three research streams identified in our review (middle management
roles, involvement, and outcomes). At the same time, we aim to encourage cumulative future
research by suggesting shared theoretical foundations and connections across research streams.
Consequently, we end with a call for multilevel research and a discussion of resulting method-
ological and theoretical challenges.
High-Priority Research Issues
The need for holistic investigation of strategic roles. The literature on middle manage-
ment’s strategic roles has elaborated various ways middle managers become involved in
strategy, and this has done much to advance the field’s understanding of potential middle
manager contributions. As exemplars of this literature, we point to the articles by Dutton and
colleagues on issue selling (e.g., Dutton & Ashford, 1993). In combination, these studies
represent the kind of programmatic research that leads to a cumulative knowledge base. The
authors begin by carefully developing theory on an interesting aspect of how middle man-
agers contribute to strategy making. Then, they draw from established theories to articulate
a range of propositions. In subsequent articles (Dutton et al., 1997; Dutton et al., 2001), they
explore these relationships empirically, using a combination of exploratory qualitative and
quantitative methods.
Regrettably, the coherence reflected in this work is not apparent in most of the literature
on middle management’s strategic roles. Authors develop, describe, and label roles differ-
ently, thereby reducing the transparency of linkages across studies. Issue selling, for
example, appears closely related to Floyd and Wooldridge’s (1992, 1996) synthesizing role
but may also include elements of championing. Similarly, Rouleau’s (2005) interpreting and
selling change has clear overlaps with both synthesizing and implementing. All of the
authors acknowledge the potential, even likelihood, that roles will overlap, but the lack of
consistency in describing the roles has frustrated the development of cumulative research
into the origins and consequences of middle manager strategic behavior.
Compounding this issue, existing typologies have drawn from top management and delib-
erate strategy as key reference points, and most existing research relies on empirical obser-
vation and classification to identify behavior. Although this has been a useful way to broaden
our understanding of how middle managers contribute to strategy, it has the disadvantage of
proliferating an ever-broader descriptive base. What is needed at this point is a theory-based
synthesis that results in a logically consistent and parsimonious set of middle management
strategic roles.
Future research should therefore work toward developing a more holistic typology of
middle management’s strategic roles. Toward this end, future research would benefit from
incorporating constructs that are more closely tied to theories of the strategy process itself,
such as the intraorganizational evolutionary theory of strategic renewal (Barnett & Burgelman,

1996; Burgelman, 1991; Huff, Huff, & Thomas, 1992; Nelson & Winter, 1982). Such reground-
ing would serve to embed strategic roles in a more all-embracing theory of the context and
thus be more likely to capture the breadth of middle managers’ strategic activity and also its
antecedents and consequences. For example, as outlined in Figure 1, research might begin
by conceptualizing roles in the context of stages of the strategic renewal process and link
those to the variation-selection-retention framework of intraorganizational ecology theory
(Burgelman, 1991), that is, idea generation (variation), initiative development (selection),
and integration/execution of newly developed routines (retention).
This more holistic process perspective reveals that extant research, despite the interest in
middle managers’ role in innovation and corporate entrepreneurship, has primarily investi-
gated how middle managers disseminate and communicate existing knowledge, leaving the
creation of new ideas underexplored. For instance, although the synthesizing role describes
middle managers categorizing and selling issues, we still lack a theory of how and when
middle managers contribute to the identification or generation of new ideas, how they fit
these ideas into the broader strategic context, and the overall effect of these behaviors on the
firm’s innovative capacity.
Future research should also broaden the investigation of the psychological foundations of
middle management behavior. In particular, future studies could build on Huy’s (2001, 2002)
research and further elaborate links between middle management emotion and strategy
process. Positive and negative feelings are likely to be tied to particular behaviors, in the
form of strategic roles (e.g., expressing empathy in the implementation role) or more broadly
as “commitment” to the organization’s strategy (Dess, 1987). At an even more general level,
researchers have argued that negative affect distorts perceptions about conditions in both the
external environment and internal organization (Daniels, 1998, 2003). This distortion turns
up in how people think about threats, negative outcomes, and even worst-case scenarios. The
fears associated with such thinking are likely to lead to low trust in the organization, poor
information sharing, and ultimately, low quality decision making (Amason, 1996). Thus,
developing and maintaining positive feeling in the face of the negativity and fear associated
with some strategic change appears to be a central contribution of middle management to
strategy formation and requires further investigation.
A more theoretically grounded investigation of middle management roles may also help
us to understand how and why middle management strategic leaders emerge. Prior research
(Floyd & Wooldridge, 1997) indicates that, in high-performing firms, different managers
influence strategy in different ways at different points in time. Future research may therefore
undertake longitudinal studies that illuminate key patterns in the evolution of middle-level
influence over time.
On a related note, taking a middle management perspective raises underexplored ques-
tions about managerial agency and the legitimacy of hierarchical structures. Middle man-
agers often gain strategic influence without or even against formal authority (e.g.,
Burgelman, 1994). Future research therefore needs to explore questions about the agency
problems that arise in such circumstances (e.g., Stroh, Brett, Baumann, & Reilly, 1996). For
example: How do firms manage the personal and organizational risks of behavior that
diverges from official strategy (e.g., Dutton & Ashford, 1993), including unethical behavior
(Kuratko & Goldsby, 2004)?

Although existing research identifies middle managers as important mediators across

organizational boundaries (e.g., Bartlett & Ghoshal, 1993; Balogun & Johnson, 2004), there
are still too few studies (e.g., Rouleau, 2005) that investigate how middle managers actually
realize and renew intraorganizational and external relationships. Thus, inquiries into middle
managers’ horizontal linking activities have the potential to inform the literature on such
issues as how firms actually realize cross-business synergies or how they disentangle assets
in corporate divestitures (Johnson, Melin, & Whittington, 2003).
Finally, it is important for individual managerial roles to be examined within the context
of group and organizational-level activity. Existing research examining middle management
roles has tended to isolate managerial activity and overemphasize individuals at the expense
of groups, and multiactor processes. This focus has obfuscated links between individual mid-
dle management activity and broader strategic processes (e.g., project teams pursuing initia-
tives in the strategic renewal process) and underemphasized the social interactions that are
known to be important in social learning (Crossan, Lane, & White, 1999). Future research,
therefore, would be well served to examine how individual managerial behaviors are con-
nected to group-level activities and, in turn, affect organizational outcomes. Along these
lines, and consistent with earlier studies (e.g., Rouleau, 2005; Westley, 1990), future research
might explore middle managers’ strategic influence in terms of underlying practical skills
and link these microprocesses to group-level phenomena such as the use of language, strate-
gic planning, and face-to-face meetings (Jarzabkowski, 2005; Johnson, Langley, Melin, &
Whittington, 2007). Research should also examine how microprocesses connect to macro
institutional settings, such as the strategic discourse (Vaara, Kleymann, & Seristo, 2004) or
industry recipes (Spender, 1989).
The need to connect thought and action. Although the middle management perspective
was launched in opposition to the separation of thinking and acting in strategy, overtones of
this distinction are replicated in the research. In fact, the original motivation for studying
shared strategic understandings among middle managers was to examine direct links with
organizational performance (Wooldridge & Floyd, 1990). This approach followed the logic
of contemporaneous research focused on top managers but ignored the rather obvious medi-
ating effects of action on the thinking–performance relationship. Hints of this gap are reflected
in the literature. Dess (1987), for example, was early to recognize that shared understanding
of a strategy did not necessarily mean acceptance, and that without the latter, strategic con-
sensus among middle managers was unlikely to lead to realization of intended strategy. As a
result, Dess and others (Wooldridge & Floyd, 1989) called for studies incorporating shared
commitment to strategy as a second dimension of strategic consensus. Although this avoids
a false separation between thought and emotion, it still falls short of incorporating behavior
into the consensus–performance relationship.
In our view, therefore, future research will profit from creating bridges between cognitive
and behavioral approaches in explicating a middle management perspective of strategy for-
mation. Some of these links are rather obvious, such as the need to explain the enactment of
strategic roles in cognitive terms. Strategic behavior is largely voluntary and not formally
coordinated within organizations (Floyd & Lane, 2000). If lack of formal coordination is

taken to mean no coordination at all, however, it seems likely that role conflict will arise in
the absence of a shared mental model. On the basis of interactions with customers, for
example, a middle manager might perceive the need for a change in product strategy. At the
same time, on the basis of interactions with representatives of the capital markets, top
managers may share a different mind-set, one more closely associated with the status quo
(Hambrick, Geletkanycz, & Fredrickson, 1993). In the face of such differences in percep-
tion, managers are likely to feel strategic role conflict; that is, uncertainty and tension about
which role to enact.
Research on teams suggests that strategic role conflict can be at least partly avoided if mid-
dle and top-level managers share a mental model of the strategic situation (e.g., strength,
weaknesses, etc.) and the organization’s strategic posture (e.g., goals, competitive strategy,
etc.) (Cannon-Bowers, Salas, & Converse, 1993; Klimosky & Mohammed, 1994). When
managers share similar mental models of task processes and outcomes, they are more likely
to understand one another’s perspectives, to communicate more easily, to coordinate more
effectively, and to improve overall team performance (Salas & Cannon-Bowers, 2001). As
strategy making involves a high degree of complexity where conventional coordination mech-
anisms are unlikely to be adequate, the benefits of mental model similarity may be even more
pronounced in this context than in less uncertain operating environments. Future research,
therefore, should establish links between shared understanding or mental model similarity and
the strategic behavior of middle managers, both in teams and as cohorts of individuals. For
example, it would be interesting to confirm that the championing and facilitating activities of
middle managers actually emanate from a divergent mind-set (Floyd & Wooldridge, 1992)
and whether these activities are positively and monotonically related to divergence, that is,
more disagreement or questioning of official strategy results in more championing behavior.
More interesting would be research highlighting varieties of mental models at different levels
and in different divisions within large, complex organizations. King and Zeithaml’s (2001)
work shows that managers’ perspective matters when it comes to understanding organiza-
tional capabilities and unraveling causal ambiguities. It is useful to know that middle man-
agers may have a better perspective on capability development, and future research should
build on this idea. To confirm the efficacy of shared understandings in strategic contexts, for
example, researchers could observe mental model similarity within teams associated with
strategic initiatives. How, for example, does mental model similarity within a team and simi-
larities or differences between the team and other units (e.g., top management) influence
enactment of roles and subsequent success or failure of an initiative?
More broadly, high-performing organizations in dynamic environments need a combina-
tion of high levels of differentiation and sophisticated integration devices (Lawrence &
Lorsch, 1967). How organizations achieve this balance of integration and differentiation in
terms of strategic thinking and behaviors across and within groups and how they create and
maintain shared understandings of strategy without eliminating divergent thinking and emer-
gent activities are important research questions. Future research, therefore, must advance
understanding of contexts that require shared thinking at middle levels, how these shared
mental models are maintained over time, and how middle management thinking comple-
ments and/or conflicts with managerial perceptions and cognitions at other levels.

The need for links between antecedents, processes, and outcomes. As important as the
need to link thought and action is the development of theory that incorporates both the con-
ditions leading to and outcomes flowing from the enactment of strategic roles. Although
researchers have identified a large number of antecedents of middle management strategic
behavior, as with the case of the roles themselves, the list seems to grow with each study.
One way to work toward a synthesis could be by beginning to sort existing antecedents into
those that emanate from the individual (e.g., position in the social network), group (e.g., rela-
tionships with top management), and organizational (e.g., decentralized decision making)
levels of analysis (see Figure 1). Such a classification of antecedents would recognize the
potential for interactions and multilevel influences—for example, decentralized decision
making leads to increases in the number of middle managers in boundary-spanning roles. In
addition, it would be consistent with the need for different theories to explain circumstances
favoring middle management activity. For instance, organizational antecedents of middle
management behavior have been the primary focus. Future studies thus may extend individ-
ual and group antecedents to include variables such as cohesiveness and network density to
develop a more fine-grained understanding of the sources of strategic influence.
In addition, the development of a more normative understanding of middle management
strategic activity requires research that includes both antecedents in the external environment
and important outcomes like innovation or capability building. Existing theory asserts asso-
ciations between middle manager roles and organizational strategy but fails to address the
question of how such alignment develops and how it influences organizational performance.
Granting that championing behavior is more prominent in Miles and Snow’s (1978) prospec-
tor strategy, for example, what happens when changes in the external environment create the
need for strategic change? There is evidence that middle managers’ strategic behavior can be
an important source of adaptation (Balogun & Johnson, 2004; Burgelman, 1994; Huy, 2002),
and we have theory about how they effect such change. It is less clear, however, how exter-
nal cues, either in isolation or in combination with internal conditions, influence their behav-
ior in the first place. Moreover, middle manager perceptions of the external environment are
likely to be influenced by intraorganizational antecedents at individual, group, and organi-
zational levels of analysis. Boundary spanners in decentralized organizations, for example,
may be more likely to perceive changes in the external environment. Thus, assuming middle
managers attend to external conditions, we need to understand better how such conditions
influence their behavior and what this means for organizational outcomes such as strategic
change, adaptation, and organizational performance. This external focus should also include
empirical studies that incorporate national cultural differences and their effects on middle
management strategic influence (Ling et al., 2005).
Our review also shows that there are relatively few studies establishing links between spe-
cific activities and broader organizational outcomes. Although we know, for example, how
middle managers can increase their chances of getting top management’s attention through
issue selling, there is less evidence concerning when and to what extent these efforts actu-
ally succeed in influencing top management’s perceptions, much less whether such efforts
serve organizational purposes. Although the majority of existing research assumes positive
associations between middle manager strategic activity and organizational performance,
there is a strong likelihood that their behavior influences outcomes in both positive and
negative ways. Complicating this issue, the pursuit of self- (and subunit) interests may not

always be incompatible with support for organizational goals and strategies. Actors’ motiva-
tions are difficult to discern. What seems like middle management resistance, for example,
may actually represent middle managers’ honest appraisals of what is feasible or in the best
interest of the organization (Ford, Ford, & D’Amelio, 2008; Guth & MacMillan, 1986).
Future research would do well, therefore, to examine these dynamics and to extend the work
of Ketokivi and Castañer (2004) in describing conditions that help to align individual and
subunit interests with those of the larger organization.
As shown in Figure 1, middle management research has profited from examinations of
intermediate outcome variables, which correspond more closely than organization-wide out-
comes to middle managers’ scope of formal authority. This research also helps to build a more
complete explanation of the relationship between middle management and organizational per-
formance. The search for more proximate outcomes should be guided, however, by develop-
ments in theory. For instance, research on strategic renewal has investigated such outcomes as
innovativeness (Rodan & Galunic, 2004), success of strategic initiatives (McGrath, 2001), and
capability development (Burgelman, 1994). Overall, middle management research has poten-
tial to contribute to the micro-foundations of capability- and knowledge-based views. Whereas
prior research on ambidexterity, the ability to balance long-term innovation with short-term
efficiency, has primarily focused on the firm-level phenomena and senior management decision
making (March, 1991), middle management research may illuminate the critical balancing acts
underlying ambidexterity at the group or subunit levels (Leonard-Barton, 1992).
The need for multilevel theory. Perhaps most fundamentally, Figure 1 suggests the need
for multilevel theory building and research (Tosi, 1992). Indeed, like most management
research, many of the outlined future research topics investigate multilevel relationships and
require careful consideration of level of analysis (e.g., the relationship between organiza-
tional antecedents and individual middle management behaviors) (Hitt, Beamish, Jackson, &
Mathieu, 2007). Although multilevel research seems critical to a fuller understanding of link-
ages between managers’ perceptions and behaviors, and organizational contexts and out-
comes, it is practically challenging.
Such work would acknowledge reciprocal influences among environmental and organiza-
tional contexts, individual and group-level behaviors, and organizational outcomes. Although
the constructs included in Figure 1 are neatly categorized as antecedents, processes, and out-
comes, their true relationships to one another are likely to be more complex, recursive, and
bidirectional rather than discrete and unidirectional. For example, although a firm’s strategic
type is likely to affect managerial involvement in strategy making, and such involvement may
in turn influence organizational outcomes, over time, perceptions of success or failure may
reinforce, or precipitate change, at organizational and managerial levels. Thus, future research
must be sensitive to, and address, the challenges posed by possible simultaneous influences
between antecedents and their effects and across levels of analysis.
A second major challenge resulting from multiple levels of inquiry are theoretical incom-
mensurabilities. Micro and macro phenomena are typically not linked in a simple linear or
causal fashion. Scholars therefore need to find ways that capture cross-level relationships
beyond rough aggregations of lower levels. We have explicated differences between choice
and social learning perspectives, in particular, to encourage future research to take these
partly conflicting assumptions as a point of departure. A careful consideration of underlying

differences and commonalities may provide the basis for a more holistic, dynamic theory of
strategy process. In addition, as proposed earlier, evolutionary theory and capability-based
views of strategy may represent integrating metatheories that permit a consistent theoretical
grounding across levels of analysis.
Finally, research in this domain has the potential to help in explaining relationships
between strategy formulation, implementation, and organizational performance. To do so,
however, will require sampling across levels of management. As an example, T. Porter
(2006) used cross-level sampling to study how middle managers affect the realization of cor-
porate-level environmental policies within operating units. Specifically, using data gathered
from corporate, middle, and operating-level managers, her study demonstrates how middle
managers’ perceptions and attitudes concerning corporate-level environmental policies affect
their leadership behaviors, and in turn, the number of environmental initiatives generated
within their operating units. In contrast with studies focused exclusively or primarily at one
level of management, multilevel studies of this type have the potential to shed light on the
“black box” that intervenes between top management’s intent and the realized strategy.
To produce cumulative findings, however, the challenge for such studies is to articulate a
clear and consistent definition of the focal units (Hitt et al., 2007). How does one differenti-
ate top, middle, and operating-level management theoretically so that observations of behav-
ior across these levels are comparable between studies? Indeed, how does one differentiate
middle management in a way that is theoretically and empirically consistent across studies?
The theoretical definition of middle management remains somewhat ambiguous, and the
inconsistent definition of the focal unit has blurred issues of comparability across studies.
The fact that such ambiguity is common in management research (Hitt et al., 2007) should
be no consolation if the goal is to produce a coherent body of knowledge. Thus, we repeat
calls for more systematic, theory-driven sampling of middle managers combined with meth-
ods that triangulate the identification of managers (e.g., using organizational charts, senior
management informants, and the a priori classification of middle managers into generic sub-
types such as boundary spanners).
Although gathering data from multiple levels of managers in multiple organizations for
which the researcher has rich contextual information is perhaps an ideal design for middle
management studies, practicalities associated with this approach may make it unrealistic in
the context of an individual study. One way in which the field might circumvent this con-
straint and thereby advance middle management research is through the development of
research teams that coordinate efforts across individual studies. In other words, it is con-
ceivable that, over time, teams of researchers, composed of faculty and doctoral students
from one or more schools, could develop a collective “database” that addresses the method-
ological challenges inherent to multifirm, multilevel research.
Conclusion
Our objective in this article was to provide an overview of strategy research from a mid-
dle management perspective. The review provides evidence for the significant impact that
research from a middle management perspective has had on the field’s understanding of
how strategy forms in large organizations. Perhaps the most significant contributions are an

elaboration of various ways in which middle managers influence strategy making and orga-
nizational change, beyond mere implementation, and an increased understanding of process
considerations leading either to effective strategy formation or dysfunctional role conflict.
Although these contributions have indeed been significant, realizing the potential of this area
of study will require that future research proceed in a more coordinated fashion. Given an
increasingly turbulent global economy and an accompanying emphasis on creativity and
innovation in organizations, the relevance and importance of strategy process research
from a middle management perspective has never been greater, and we hope this review will
contribute to the advancement of research in this area.
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Biographical Notes
Bill Wooldridge is a professor of strategic management in the Isenberg School of Management at the University of
Massachusetts-Amherst. His current research projects explore how strategy is constructed through linked interac-
tions between and across layers of management, and how individual-level competencies and practices combine and
cumulate into organizational-level capabilities.
Torsten Schmid is a postdoc and research program manager at the University of St. Gallen in Switzerland. His
research focuses on issues of corporate entrepreneurship and strategy process in large organizations, including the
evolution of strategic initiatives, organizational ambidexterity, and strategic leadership.
Steven W. Floyd is a professor of strategic management at the University of St. Gallen in Switzerland. His research
interests center on corporate entrepreneurship and strategy process, including such topics as the evolution of strategic
initiatives, the development of entrepreneurial competence, and the practices associated with strategy rituals.
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Strategic Decision Processes (Group 5)

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Strategic

Strategy Process Group 5

ABUBAKAR AHMAD ANGGA TIRTA FANIA NAOMI H.

This includes deciding on objectives, resources, and capabilities

(Mintzberg, Lampel, Quinn, Ghoshal, 2003)

In 1971, he regarded Strategy Process as a

Strategy process is tremendously crucial to

Henry Mintzberg (1973)

James Brian Quinn added Logical

Single individual Managers wait for

Systematic information Interactive strategy

One is problematic preferences: the inconsistent and ill-defined

Second, organized anarchies have unclear technology. People have

Third, organized anarchies are characterized by fluid participation.

Decisions occur as a result of chance intersection among changing

Schneider and De Mayer (1991), in attempt to provide an integrative model,

Manager’s individual Internal

THE DECISION THE STRATEGIC OR MANAGEMENT

Kenneth R. Andrews (1971), 'The Concept of Corporate Strategy', in The Concept of

Eisenhardt, K. M., & Zbaracki, M. J. (1992). Strategic Decision Making. Strategic

Papadakis, V. M., Lioukas, S., & Chambers, D. (1998). Strategic Decision-Making

Stable URL: https://www.jstor.org/stable/2486364

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STRATEGIC DECISION MAKING

Change swept strategic management research musings of Simon to a plethora of ideas by a

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Table 1. Summary of empirical research: Rationality and bounded rationality

Author(s) Method Sample Description Conclusions

Mintzberg, Case studies 25 strategic Varieties of Phases of decision making

Janis, 1982 Case studies 7 major Examples of poor 'Groupthink' is negative,

Anderson, 1983 Case study 1962 Cuban Empirical Sequential choice of

Fredrickson, 1984 Scenario-based 38 firms; stable Relationship Comprehensive processes

Hickson, Butler, Case studies 150 strategic Varieties of Multiple decision

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Author(s) Method Sample Description Conclusions

Pinfield, 1986 Case study Canadian gov't Comparison of Structured processes

Schweiger, Laboratory study 120 MBA students Comparison of DA and DI approaches

Dean and Field study 57 strategic Use of rational Organizations use

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Table 2. Summary of empirical research: Power and politics

Author(s) Method Sample Description Conclusions

Pfeffer and Field studies University of Relationship Resources received

Hills and Field study University of Allocations of Power affects resource

Gandz and Field survey 428 managers Managers' Politics pervasive in

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Author(s) Method Sample Description Conclusions

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Taken together, these studies and others indicate

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Table 3. Summary of selected research: Garbage can model

Author(s) Method Sample Description Conclusions

Cohen, March and Computer N/A Introduces garbage Decision making as a

Kreiner, 1976 Case study Danish Example of a Description of garbage

Padgett, 1980 Mathematical N/A Stochastic garbage Implications of ambiguity;

Carley, 1986 Computer N/A Simulation Measures of efficiency

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Author(s) Method Sample Description Conclusions

Magjuka, 1988 Field study 28 schools in 2 Comparison of Descriptive validity for

Significant at 0.05; Significant at 0.01; Significant at 0.001.