According to Mint berg, the modes of strategic decisions- making are:
Entrepreneurial mode
Formulation of strategy is done by a single person in this mode. The focus is on opportunities. Strategy is guided by the founder’s vision and is characterized by bold decisions. In the Indian set-up, we can cite the case of Wipro InfoTech as an example of this mode of strategy formulation.
Adaptive mode
This mode of decisions making is referred to as “muddling through”. It is characterized by reactive solutions rather than a proactive search for new opportunities. We can again cite the example of Wipro InfoTech introducing the sale of customized Personal Computers in response to Dell Computers entering the Indian market.
Planning mode
This mode of decision making involves systematic information gathering for situational analysis, generating alternate strategies and selection of the appropriate strategy. As could be inferred, this mode includes both the proactive mode and the reactive solutions to current problems. For example, entry of MNCs into the automotive markets in India has made the lead player Maruti Suzuki to come out with new models and discard/slow down production of non-moving and old models.
Sometimes organizations may adopt a fourth mode, called the logical incrementalisation mode. This is a synthesis of all the three modes of strategic decision making listed above. Quninn describes logical incrementalisation as: “An interactive process in which the organization probes the future, experiments and learns from a series of partial (incremental) commitments rather than through global formulation of total strategies.”
As already explained, strategic decisions involve an interface between an organization and its external environment. This is in contrast to operating decisions which are more frequent. The effects of strategic decisions permeate throughout the organization at all levels for a considerable length of time since it involves committing substantial amount of resources of the organization. Sometimes this is referred to as a non-self- generating decision, implying that though strategic decisions may be few in number, the organization should always be aware of the need to make such decisions.
Hence, it is essential to put a mechanism in place to take strategic decisions. This is more so in the case of Indian organizations with the onset of liberalization. The table below provides a comparison of the operating and strategic decisions. As may be seen from the table, the organizations’ short-term survival is affected by its operating and administrative efficiency. Its success or failure in the long term depends on right strategic decision-making, i.e. it depends on doing the right things rather than on doing the things right.
| What | Strategic Decisions | |
| Strategic Decisions | Unclear | |
| Operating Decisions Effective | Clear strategy and effective operations have contributed to success in the past and will contribute to success in the future | Unclear strategy but effective operations have contributed to success in the past but success in the future is doubtful |
| Ineffective | Clear strategy but ineffective operations have sometimes worked in the past in the short run, but increasing competition makes success doubtful in the future | Unclear strategy and ineffective operations have meant failure in the past and will be so in the future |
