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Summary definitions - Strategic decision making (441058-B-6)
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A summary of all important terms and definitions discussed in the lectures from strategic decision making.
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LECTURE 1 - INTRODUCTION● Strategic decisions: decisions committing substantial resources, setting precedents, and
creating waves of lesser decisions; as ill-structured, non-routine and complex; and as
substantial, unusual * and all-pervading <alles doordringend>
○ characteristics; complexity, uncertainty, rationality, control
○ perspectives; important decisions, critical tensions, decision interdependence*
● Decision interdependence * :
○ Inter-decisional: Decision relations to other decisions, bv committing resources to
other things
○ Inter-actor: whatever company decides, take into account what other companies do
and how they react to their decision
○ Inter-temporal: decisions taken at one point of time have consequences for other
decisions and people
● Strategic decision making process: the process by which a strategic decision is made and
implemented and the factors which affect it, i.e. the process that leads to the choice of goals
and means and the way in which means are effectively deployed. where action is
→ professionals develop tools, researchers identify factors for increase/decrease of quality
→ consists of formulation and implementation.
● Context: those aspects that are not subject to the choice situation to those decision-makers
present at the moment of decision. It creates;
○ decision premise (The problem to respond to)
○ strategic options (The options available to remedy the problem)
● Outcome: the intended and unintended consequences of a strategic decision
○ Decision level: the intended and unintended consequences of a decision considered
in terms of financial and/or nonfinancial outcomes ISOLATED from other influences,
→ i.e. outcomes as a consequence of the SD that was taken.
bv decision quality
○ Organizational level: the intended and unintended consequences of a decision
considered in terms of financial and/or nonfinancial outcomes in the AGGREGATE of
all influences on the organizational outcomes,
→ i.e. outcomes as a consequence of all relevant organizational activity influencing
those outcomes, including the SD.
bv employee commitment
○ Supra-organizational level: Repeat OLO, add environment and inter-organizational
(network) outcomes
bv environmental impact
● Process/effectiveness link: here practitioners look forward (future) and make estimates
about intended and unintended consequences
1
, LECTURE 2 - ENVIRONMENTAL + ORGANIZATIONAL CONTEXT
● High-velocity environment: in which there is ”rapid and discontinuous change in demand,
competitors, technology and/or regulation, such that information is often inaccurate,
unavailable, or obsolete”
→ high degree of uncertainty and ambiguity
● Rapid decision making perspectives
→ You need more centralized (limited participation), less comprehensive, less conflict
RULES FOR SDM IN FAST-PACED MARKETS
1. Use of real-time information
2. Simultaneous consideration of several alternatives
3. Use of experienced counselors
4. Use of active conflict resolution
5. Integration among decisions
KEY MEDIATING PROCESSES DECISION SPEED
- accelerated cognitive processing
- smooth group process
- confidence to act
● Organizational structure dimensions
○ Centralization: Decision-making and evaluation of activities is concentrated in one
person/department. High influence of managers in charge
○ Formalization: Rules and procedures to prescribe behavior. Limits ambiguity, but
also members’ discretion
○ Complexity: Composed of many, usually interrelated, parts. Complicates
coordination and control of decision activities
Strategic decision process characteristics
● Process initiation: How and where is the process initiated <gestart>?
○ Centralization: Initiated by the dominant few; proactive opportunity-seeking process
○ Formalization: In response to ‘problems’ detected through monitoring by the formal
system
○ Complexity: Parochial views can lead to ignoring or failure to recognize strategic
issues
● Role of goals: Ind. vs. org.-level? Remedial or future-oriented? Precise vs. general?
○ Centralization: Decisions are oriented towards “intended future domains” of dominant
few
○ Formalization: Precise rather than general; remedial rather than positive, future
intended
2
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