Strategy Creation in the Periphery: Inductive Versus Deductive Strategy Making*

Abstract

abstract Although strategy process research has provided careful and in‐depth descriptions and examinations of strategy, micro‐level processes and activities have been less commonly evaluated, especially as regards strategy creation and development. This paper examines how managers create and develop strategy in practice. A dual longitudinal case methodology, including a single in‐depth study combined with a multiple retrospective study is used, involving four multinational companies. The findings show a twofold character of strategy creation, including fundamental different strategy activities in the periphery and centre, reflecting their diverse location and social embeddedness. Strategy making in the periphery was inductive, including externally oriented and exploratory strategy activities like trial and error, informal noticing, experiments and the use of heuristics. In contrast, strategy making in the centre was more deductive involving an industry and exploitation focus, and activities like planning, analysis, formal intelligence and the use of standard routines.