User:Pamela.echegaray/sandbox
Strategic Decision Making
[edit]Strategic decision making is a management process part of the strategic management, this process involves several steps to have a better process in the decision making process. The Strategic Decision Making process is exclusive for top managers.[1] Strategic makes reference to an strategy. The Decision making process lead to a process in which the organization decides to implement selected strategies set the implementation of a Strategic planning and keeps on appraising the progress and success of implementation through regular assessment. Strategic decisions are characterized to be risky, dangerous or they can cause a strong impact on the success and survival of a company. [2][3] The Strategic Decisions Making sets an efficient process to build, make and implement a Strategic Plan succesfully. [4]
Aspects that affect the Strategic Decision Making
[edit]The strategic decision making can be affected by the Cognitive bias, they can affect the way that people process information and make important decisions. It can cause that the managers may make poor strategic decisions. It exist a List of cognitive biases. The Cognitive bias have been tested by many laboratory settings, so it can be reasonably proved that biases exist and people tend to follow them. [5]
The biases that affect more the making decision process are:
| Cognitive Bias | Description |
|---|---|
| Prior hypotesis bias | Occurs when decisions makers who have strong prior beliefs tend to make decisions on the basis of these beliefs even when presented with evidence that their beliefs are wrong.[5] |
| Escalating commitment | Occurs when decision making makers, having already committed significant resources to a project, commit even more resources after receiving feedback that the project is failling.[5] |
| Reasoning by analogy | Use of a simple analogies to make sense out of complex problems.[5] |
| Representativeness | A bias rooted in the tendency to generalize from a small sample or even a single vivid anecdote.[5] |
| Ilussion of control | A bias rooted in the tendency to overstimate one's ability to control events.[5] |
| Availability error | Arises from our predisposition to estimate the probability of an outcome based on how easy the outcome is to imagine.[5] |
There exist some techniques that helps to set a decision making mechanism so the company's strategic decisions are realistic.
Devil's advocacy
[edit]It is a technique in which the managers in charge of the Strategic Decision Making identifies all of the considerations that might make a proposal unacceptable. It is necesary to generate a plan and a critical analysis of the plan.
One of the members of the Decision Making team acts like the devil's advocate and emphasize all the reasons that might make the proposal unacceptable. It helps to discover the gaps and possible perils of the recommended courses of action.
Dialectic inquiry
[edit]It needs the generation of a plan and a encounter plan that reflect plausible but conflicting courses of action. The managers in charge of the Strategic Decision Making are going to listen to a debate between the advocates of the two plans and are going to make a decision based on what they listen and which is the best plan to have a high performance.
Outside view
[edit]The managers in charge of the Strategic Decision Making are going to make a research of past strategic initiatives and determined which of them where succesfull and improved them and also take a look on the strategies that failed.
The strategic decision making process its based on the follow steps:
Identify Problems
[edit]First we need to recognize that there is a decision to be made. Strategic decisions are complex, they address to an specific problem, need or opportunity.
Seek Information
[edit]Managers need to clarify their options once they have identified an issue that requires a decision. Managers may seek relevant information about an issue.
Brainstorm Solutions
[edit]When the manager have a more complete understanding of the issue, the managers move on to make a list of potential solutions. This step can take some hours, weeks or moths depending on the difficulty of the issue.
Choose an Alternative
[edit]Managers need to weigh the pros and cons of each potential solution, and after that seek for aditional information if needed, Then with all the options on the table they chose the best chance of success proposal. It is always important to look for external advice or a second opinion.
Implement the Plan
[edit]Once you have made a decision, there is no time to second guess what is going to be implemented . You have chosen an strategic planning so you need to start using it with conviction. It is important to say that the manager can change the strategic plan if the results are not what expected. Strategic plans usually count with monitoring systems in order to evaluate the outcomes of the decisions.
Evaluate Outcomes
[edit]Even the most experienced business owners can learn from their mistakes. It is important to track the results of strategic decisions you make as a small business owner; be ready to adapt your plan as necessary, or to switch to another potential solution if your chosen solution does not work out the way you expected.
External Links
[edit]- Enhancing Entrepreneurial Orientation Research: Operationalizing and Measuring a Key Strategic Decision Making Process
- Strategic Decision-Making Processes: Beyond the Efficiency-Consensus Trade off
- Role of Strategic Analysis in Strategic Decision - Making
- Strategic Management Process - Meaning, Steps and Components
- Three Quick Ways to Improve Your Strategy-Making
References
[edit]- ^ Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review
- ^ Gazova, Andrea (2008). "Role of Strategic Analysis in Strategic Decision-Making". Science Direct.
- ^ Gault, D (2012). Gestión estratégica para el sector público del pensamiento estratégico al cambio organizacional. México D.F.: Fondo de Cultura Económica.
- ^ Michael, R (2004). "Strategic Decision-Making Processes". Group & Organization Management. 29 (6): 625–658. doi:10.1177/1059601103257961. S2CID 141297176.
- ^ a b c d e f g Charles, W (2008). Strategic Management Theory. USA: South Westerm. pp. 28–30.
- ^ Rajagopalan, N; Rasheed; Datta (1993). Strategic decision processes: Critical review and future directions. Journal of Management. pp. 349–364.
- ^ Simon, H (1976). Administrative behavior: Astudy of decision-making processes in administrative organization. New York: Free Press.
- ^ Bower, J (1998). Process research on strategic decisions. Boston: Kluwer Academic.
- ^ Bhide, A (1994). How entrepreneurs craft strategies that work. New York: Harvard Business Review. pp. 150–161.
- ^ Murnighan, J; Mowen (2002). The art of high-stakes decision-making. New York: John Wiley.