Strategy as a response to organizational uncertainty: an alternative perspective on the strategy‐performance relationship

Much of the literature suggests that strategies are formulated in light of perceived environmental conditions and internal capabilities. This study supports the notion that strategy is formulated in part as a response to management uncertainties about competitors, customers, and the environment. Responses from 137 wholesale grocers demonstrate that uncertainty varies by generic strategy, suggesting that businesses consider both the type and degree of uncertainty when crafting a competitive strategy. Specifically, the data suggest that viable strategic options may be limited more by the cognitive and perceptual abilities of an organization’s managers than by objective measures of factors such as organizational resources and industry competitiveness. The premise that strategy must “fit” with organizational or environmental factors to be effective may be incomplete. Rather, a strategy – to be successful – should also fit with the psychological characteristics and constraints of the managers responsible for its formulation and implementation.