Strategic Decision Making

By deIinition, decision making is the process through which managers identiIy
organizational problems and attempt to resolve them (Bartol & Martin, 1994).
Crook, Ketchen, and Snow (2003) stated that the purpose oI strategic management
research is to help Iind ways to improve their perIormance. Further, strategic
decision makings are those that determine the overall direction oI an enterprise and
its ultimate viability in light oI the predictable, the unpredictable, and the
unknowable changes that may occur in its most important surrounding
environments. They ultimately shape the true goals oI the enterprise (Mintzberg &
Quian, 1991).

Pearce and Robinson (1997) underlined the characteristics oI strategic decision
making as corporate level decisions (greater risk, cost, proIit potential; greater need
Ior Ilexibility, and longer time horizons), Iunctional level decisions (implement the
overall strategy Iormulated at the corporate and business levels), action oriented
operational issues; short range and low risk. Modest cost; dependent on available
resources, and business level decision (bridge decisions at the corporate and
Iunctional levels; which is less risky, costly, and potential proIitable than corporate
level decisions, but more risky, costly, and potentially proIitable then Iunctional
level decisions).

Tatum et al. (2003) stated that managers make day-to-day decisions, or resolve
immediate problems. They also elaborated that managers have diIIerent decision
styles due to the amount oI inIormation, number oI alternatives, and attempt to
integrate and coordinate multiple sources oI input. Vroom (2003) in his study
quoted Nutt (2002) on a study oI 400 decisions that had been made by manager in
medium to large organizations in the USA, Canada and Europe. Surprisingly, halI
oI the decisions Iailed; either never implemented or subsequently unraveled during
the two-year observation period. Nutt (2002, in Vroom, 2003) stated that eIIective
decision making is not merely a matter oI decision quality but also oI ensuring that
the decision will have the necessary support and commitment Ior its eIIective
implementation.

Nevertheless, all strategic decision making must go through the decision making
process in order Ior managers to come up with a good decision.

Decision Making Process
Decision makers and managers need to allow themselves to be in the process oI
decision making. This decision making process will give the opportunity to
decision makers and managers to come up with the alternatives, evaluate each
alternatives, and select the best alternative or solution to the problem.

Decision making process comprise oI the steps the decision maker has to arrive at
his choice. The process a manager uses to make decisions has a signiIicant impact
on the quality oI those decisions (Certo, 2003). Moreover, Provan (1989) stated
that people who participate in the strategic decision making process are at a high
level oI in their organization, are competent, and are reasonably intelligent and
articulate. Strategic decision making process can be an is inIluenced by those
major groups in the organization that are most powerIul and that a rational
consideration oI external environmental Iactors may have little direct impact on
how strategies are actually Iormulated and implemented (Provan, 1989).

Basi (1988) stated that type oI decision is a Iunction oI administrative level, and
the style is a Iunction oI organizational culture. Administrative level is classiIied as
institutional or executive or upper level, organizational or managerial or middle
level, and technical or lower level. Meanwhile organizational culture is known as
paternalistic, bureaucratic, and synergistic.

Meanwhile, Nutt (1976) indicated in his study on the decision making models. He
discussed 6 models oI decision making oI which bureaucratic model, normative
decision theory, behavioral decision theory, group decision making, equilibrium-
conIlict resolution, and open system decision making. Nutt (1976) also discussed
on the limits and ways to selection the appropriate model Ior decision making Ior
organization. As such organization perIormed unique Iunctions; the levels
identiIied were technological or primary level, managerial level, and institutional
level. Thus, Iactors which characterize the decision making environment will
stipulate the appropriate model that can be optimally used (Nutt, 1976)

0/0.843 9047  74:5 /0. 0.9024/0147/0.943.3147 47.30 :99  3/.843 2.1472:.:9. 1.3/830789.078 ..0  .8810/.0 0.843 2.08 /03910/ 070 90.70 .9024/09. -:70.9090.0  %:8  1.3/ . . 47 00.438/07..324/08 0 /8.3/ 908908.90/ 9. 24/0  3472.9 .0 990 /70..90/3889:/4390/0.0 %0574. 47 2.90..7.9073.3   89.9478 2. .088.9070 90 /0.843 2. 0.843.9 5045045.9478 .:9:708343.0 0.42509039  .9 43 4897.0.- 390039 .9.90/.:..4.3/ 3899:943.9 25.9 7084:943 .3/ 9.557457.9.9.8 5.943.94390.843 9047  -0.3/.. /0.3574.3. .3  06:-7:2 ..:80/ :99    .70 2489 54071: . 47 2//0 0.8   89.8432..5..04784:9439490574-02   0.3.9.943  8 8:..3047.088.894.90.078 94 .943 41 .943 41 09073.3/ 2.79.84/8. 47 572.3/450388902 /0..088 .843 2.90 3 90897.3.08 .9073.:880/ 4390298.9073. 7.3..3 8 31:03.3 03..990-089.9 8.9.0 41 3 907 47.431.8 3899:943.7.07.:.9.3574.0  . -:70.344.07:808942..3..9073.:9:70 /23897. 1:3.3925.7432039  895:...1:3.3    .9.3.77. 0.07./0. /0.9.70 70.47.9 43 90 6:.8438 0794     4704.0  47.0 47 :5507 0.89.8.3.7432039.3 -0 .420 :5 9 90 .3..7 0.07.0/ - 9480 2.843 8 . .08.7.3..3/90.0  2.0 .47 74:58 3 90 47.70.9 950 41 /0.3 574.:880/  24/08 41 /0. 03.3 41 .843 2...2.474070.70.9:.9.088.557457.3/800.843 2.9434147.0 /0.831.9438 90 0. .3/25020390/ !74.90  $97.943  .8438..90 0.:.943.00.3.943.943 50714720/ :36:0 1:3.08  0.3/ .3 :99  .9 .9.79.3.8432./23897.   0.:.07  !74.42578041908905890/0./0.3-04592. 47.9008.843 2.3.9 41 9480 /0.943 9.90/ 9.843 2.8432.894800.

Sign up to vote on this title
UsefulNot useful