STRATEGY-MAKING IN BUSINESS: COPING WITH UNCERTAINTY IN THE ORGANISATIONAL DESIGN PROCESS (JUDGMENT, CULTURE, STRATEGIC-GROUP)

This thesis examines one way in which practising managers deal with the uncertainties pervading their understanding of their firm and its situation. Following Thompson, we argue that uncertainty brings managerial judgment into the centre of the analysis. Deterministic theories of management deny the significance of strategic choice. Uncertainty makes strategy-making difficult and connects it to the exercise of managerial judgment.;Denied certainty when making strategy, managers create and manipulate symbolic models of reality. Most models will be scientific and certain in parts. Other parts will seem invented and ungrounded, often revealing more of their creator's idiosyncracies than his knowledge of the firm. Bringing such varied parts together is clearly a problem.;Our principal hypothesis is that, rather than invent for themselves, many managers borrow their strategic judgments from a shared pool. Second, the managers using this pool or sense-making 'recipe' come from a single industry or strategic group.;Researching managers' judgments and meaningstructures calls for the methods of phenomenological sociology and social anthropology. These are relatively contraversial and raise unfamiliar difficulties, which are addressed directly.;The empirical work covered investigations in 34 firms in three industries. Senior strategy-making executives were tape-recorded in unstructured or 'focused' interviews about their work. The recordings revealed the meaning-structures they employed. These proved to be remarkably homogeneous within each industry, though sharply different between industries. They were also remarkably comprehensive and practical, clearly operationalising the physical, economic, social and cultural context of the firm. The principal hypotheses were thus confirmed.;When managers are adopting the industry-recipe, their strategy-making must be analysed in the light of the feasible variations within it. Thus the recipe, and the means shown here for identifying it, become important to strategic analysts. It makes possible, for instance, an important distinction between marginal strategic variation, within an industry's established recipe, and fundamental innovations which suggest entirely new ways of doing business. In essence, the recipe provides a sound, empirically grounded, base against which management's strategic activities can be realistically evaluated.;The resulting theory brings business policy, organisation theory and entrepreneurship into the same analytical framework.