Purpose Value is created for firms’ owners when profits outweigh investments over a given time period. This paper aims to distinguish where, within firms, strategic thinking is required for the purposes of creating value. Design/methodology/approach A novel framework is developed, which explains how six sources of value can be identified and logically related to six practical value management levels. Findings Importantly, only one source of value, namely, autonomous revenue growth, demands true strategic thinking because it represents an unknown outcome from the strategist’s perspective. This source of value can be tapped into at any decision-making level. Originality/value This paper clarifies and emphasises that demonstrating strategic wisdom is possible for anyone within a firm and ultimately, it resolves down to the thinking and decision making that increases the chances of generating higher, earlier and more frequent future incoming cash flows.

For strategists working in and for firms, acquiring knowledge about the business world is dependent on a rational process of collecting, organizing, and interpreting information. As such, these individuals are best conceived not as knowers, but as self-directing learners who are motivated to acquire, create, and apply new knowledge. To facilitate these processes, in this paper an axiomatic foundation for strategic thinking is established regarding the nature of the object of strategic thinking, the nature of strategic thinking, and the nature of knowledge. Next, four boundary references set by these axioms are used to establish a new conceptual frame of reference for strategic rationality. Interconnections between the boundary references are subsequently used to infer six canons for strategic rationality. It is concluded that strategic rationality may be found where all references overlap. Finally, to contribute towards greater rationality in strategic management practice, an actionable definition of strategic rationality is formulated that includes all references and canons.