Mintzberg's Modes of Strategic Decisions - Explained
What are the Modes of Strategic Decision Making?
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What Mintzberg’s Modes of Strategic Decision-making?
Henry Mintzberg proposed that there are 3 modes through which managers make decisions:
- Entrepreneurial mode
- Adaptive mode
- Planning mode
Back to: STRATEGY & PLANNING
What is the Entrepreneurial Mode?
Strategy is made by one powerful individual who has entrepreneurial competencies like innovation and risk taking.
The focus is on opportunities. Problems are secondary.
Generally the founder is the entrepreneur and the strategy is guided by his or her own vision of direction and is exemplified by bold decisions.
In any event, strategy is set by an authoritative decision maker.
What is the Adaptive mode?
The adaptive mode is where managers create reactive solutions to existing problems, rather than a proactive search for new opportunities. Simply wait on issues to arise.
This a fragmented approach to strategic decision making. Because of the lack of directed focused development, there is generally a lack of clarity and consensus on strategic goals.
The adaptive mode is commonly known as “muddling through”. It is more appropriate for dealing with complex and changing environments.
What is the Planning Mode?
The planning mode of strategic decision making is characterized by the systematic gathering of relevant information for situation analysis, the generation of feasible alternative strategies, and the rational selection of the most appropriate strategy.
In summary, it is a proactive search for new opportunities and the reactive solution of existing problems.
What is Logical Incrementalism?
Logical Incrementalism is a fourth decision-making mode was added to Mintzberg’s modes by James Bryan Quinn (1980).
Pursuant to this mode, managers develop develop strategies through “an interactive process in which the organization probes the future, experiments and learns from a series of partial (incremental) commitments rather than through global formulations of total strategies”.
As such, the company’s strategies are developed through a combination of debate, discussion, and experimentation. There is attempt to build consensus among stakeholders before pursuing a strategy.
This approach appears to be useful when the environment is changing rapidly, or resources must be developed before committing the entire corporation to a specific strategy.
This approach is useful when the environment is changing rapidly and it is important to build a consensus before committing the entire company to a specific strategy.
Characteristics of Strategic Decisions
The characteristics of strategic decisions flow from the nature of strategic management. There are several important differences between strategic management and various management functions like operations, human resources, marketing, accounting, finance, and research and development. The distinguishing features of strategic management are listed here.
Strategic management entails multiple time horizons
Strategic management involves strategy formulation at three levels, namely, the corporate level, the business level and the functional level. The three levels have different orientations of time, though they are synchronized in their objectives. The corporate manager deals with the vision of your organization, which has a long-term perspective. The strategic business unit level managers deal with, translating the vision into the mission and objectives for your firm and they have a medium-term perspective. The functional managers tend to have a short-term perspective.
Strategic management is concerned with both efficiency and effectiveness
Strategic management lays emphasis on both efficiency and effectiveness. It deals with the environment over which your firm has little or no control. Accordingly, efficiency, that is, doing things right might lose validity and relevance if the environment conditions undergo a change. It is effectiveness which will align the activities and strategies to the dynamic environment. Effectiveness when coupled with efficiency will enable your firm to achieve its mission and hence strategic management places a balanced importance on both.
Strategic management integrates various functions
Strategic management adopts an integrative perspective of the various functional areas in your organization. This enables organization to build on its strengths and minimize its weaknesses across functional areas and also provides synergistic effects for your organization.
Strategic management considers a broad range of stakeholders
Strategic management deals with both the external environment (operating and remote) and the internal environment effectively, and meets the expectations of the various stakeholders. The hierarchical level of strategy formulation helps in meeting the expectations of a wide variety of stakeholders.