What makes a decision strategic? Strategic representations

Paper highlights

Strategic problems are too large and ambiguous to enter a decision-maker’s mind unchanged. They must first be represented: reduced to a set of variables, relationships, categories, or images that can be reasoned about. This paper argues that those representations are not background aids to strategy. They determine which opportunities are visible and which actions appear sensible.

The representational view shifts attention from the final choice to the model that produced it. A poor representation can make extensive analysis useless; a good one can make the solution nearly obvious.

Three kinds of representation

• Internal representations are the mental models held by individual managers.
• External representations are artifacts such as maps, diagrams, frameworks, spreadsheets, and simulations.
• Distributed representations are assembled across people and organizational structures, with no one person necessarily holding the whole model.

These forms can reinforce or compensate for one another. A framework may help a manager notice a missing variable; a decision structure may combine several narrow individual views into a broader organizational one.

Main argument

Useful strategic representations capture the drivers that matter without making the problem impossible to search. Their quality depends on features such as breadth, correspondence with the environment, and appropriate complexity. The best degree of complexity varies with managerial experience and environmental uncertainty.

Why it matters

• A decision can fail because the representation omitted the decisive variable even when the reasoning applied to that representation was flawless.
• Internal mental models, external strategy tools, and representations distributed across an organization can be analyzed within one framework.
• More detail improves fidelity but can make search and inference harder; simplification improves tractability but may hide a threat.

How to use this paper

Cite this for

• A framework for internal, external, and distributed strategic representations.
• The argument that representations shape which strategic problems, alternatives, and relationships become visible.
• A research agenda linking representation quality, breadth, complexity, and firm performance.

Useful for teaching

• What makes a decision strategic from a representational point of view.
• How mental models, strategy tools, and organizational structures can be compared in one language.
• Why a decision can fail before analysis begins, because the decisive variable was left out of the representation.

Careful claim

The paper develops a representational framework for strategy; it is best used to locate mechanisms and research questions rather than as a single empirical estimate.

Abstract

This paper delves into the effects that strategic representations have on firm performance. It does so in four ways. First, it describes different types of representations—internal, external, and distributed—and it points to their pervasiveness in strategy. Second, it presents a framework to study the effects of these representations on firm performance and shows how several strategy theories can be mapped into this framework.

Third, it provides three detailed illustrations of how this framework can be used to address important questions in strategy; namely, what are the antecedents of strategic foresight, how the simplicity or complexity of representations affects firm performance, and how to incorporate the role of managerial cognition into the resource-based view. Fourth, it proposes a research agenda to further the study of the representation—performance link. Overall, this paper proposes that studying strategic representations is paramount because the success of strategies—and the realism of the strategy field—hinges on understanding how representations affect performance. Strategic representations, thus, are a central element of “what makes a decision strategic.”

Other links

• SSRN preprint

Last updated 2026-06-21