STRATEGIC CHOICE

Strategic choice is the last step of strategic management process. Strategic

choice begins only after evaluating strategic alternatives. Strategic choice is the
process of selecting best or most appropriate strategy from the bunch of alternatives.
It involves the selection of strategy or set of strategies that will help in achieving
organizational objectives. It is a mental process. It considers the impact of various
strategies on product, market and the firm before selecting a particular strategy.

Definition

According to Glueck and Jauch “Strategic choice is the decisions which selects
from among the alternative grand strategies which with best meet the enterprise
objectives”. The choice involves considerations of selective forces, evaluation of the
external dependence, managerial attitude towards risk and managerial awareness of
past enterprise alternatives against managerial exception of strategies, managerial
power relationships and organizational structure etc.

Strategic Choice Process

Strategic choice is a decision making process. Hence it is not as isolated

activity. It goes through several stages. The following are the various steps involved
in the process of strategic choice.

1. Identification of Strategic Alternatives

Strategic choice starts with the identification of strategic alternatives. It

involves discovery of various alternatives from which an alternative will be chosen.
It is not an easy exercise. It involves the consideration of various factors both
internal and external. The managers have to consider only those alternatives which
are relevant and feasible. While narrowing the decision alternatives, some broad
guidelines should be established which may be in the form of investment
requirement, type of industry or segment etc. In focusing on strategic alternatives,
gap analysis is helpful.
2. Evaluation of Strategic Alternatives

After identification of various strategic alternatives, the next step is to evaluate

the pros and cons of each alternative so that the alternative which fits the most in the
light of various decision factors can be chosen. In the process of strategic evaluation,
various approaches are used for assessing the pros and cons of different alternatives.

3. Consideration of Decision Factors

Consideration of decision factors is the third step in strategic choice process.

It involves a variety of factors which may affect the choice of strategy. These factors
may be grouped into two broad categories: objective factors and subjective factors.
In the process of strategic choice objective factors are grouped into two categories:
organisation’s strategic intent and SWOT analysis. On the other hand subjective
factors are comprised of organisation’s past strategies, personal factors and attitude
towards risk, internal political considerations and time considerations.

Decision factors

Objective factors Subjective factors

Strategic Intent SWOT Past strategies

analysis Personal Factors
Attitude towards Risk
Internal Political consideration
Time consideration

4. Choice of Strategy

Strategic choice is the last step in the strategic choice process. At this stage,
among the various alternatives, the strategists would choose a particular strategy
which may be implemented by the organization.

Factors Influencing Strategic Choice

 Strategic choice is the process of selecting the best or most suitable strategy
from the available alternative strategies that enable the organization to achieve
organizational objectives. The selection of a particular strategy is not an easy task.
It involves the consideration of various factors. The following are the various factors
that influence the strategic choice.

1. External Environment

The growth and prosperity of a unit rest on its exposure to and interaction with
external environment. External environment is composed of variety of factors and
these factors may change from time to time. The choice of strategy is governed by
the extent of the firm’s dependence on these elements.

2. Managerial Attitude Towards Risk

Managerial attitude towards risk is another important factor that affects the
strategic choice. There is possibility of risk in every business which is subject to the
occurrence of an event which may or may not happen. Risk is, thus contingent.
Hence, the managerial decisions are influenced by the attitude of the decision maker
towards risk.

3. Influence of Past Strategy

Past strategy plays a significant role in shaping future strategy. Future has its
roots in the past. To this, past strategy is no exception to the selection of a current
and future strategy due to several reasons. The major reason behind this is that past
strategy act as foundation for the new strategy. Hence, the influence of the past
strategy is taken into account while choosing a particular strategy.

4. Time dimension of strategic choice

Time dimension of strategic decision making is another important factor which

influences the strategic choice.

5. Reaction of competitors
 The reaction of competitors is another important factor which influences the
strategic choice. The strategic selection will depend on the careful examination of
competitors’ reactions. Only after studying the reactions of competitors apt decision
can be taken.