Formality in strategic management

In particular, formality is often highly associated with two factors: size and stage of development of the company. Some firms, especially smaller ones, may adopt an entrepreneurial mode. Evaluation in this mode is very informal, intuitive, and limited in scope. At the other end of the spectrum, evaluation is part of a comprehensive, formalized, multilevel strategic planning system. This approach is used by large firms such as Texas Instruments and General Electric. Calling it the planning mode, Henry Mintzberg identified a third mode (the “adaptive mode”) in the middle of this spectrum which he associated with medium-sized firms in relatively stable environments.

Firms in the adaptive mode identify and evaluate alternative strategies in close proximity to existing strategy. However, despite these generalities, it is not unusual to find different modes within the same organization. For example, Exxon might adopt an entrepreneurial mode in the development and evaluation of its solar subsidiary’s strategy while the rest of the company follows a planning mode.

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