Please enable JavaScript.
Coggle requires JavaScript to display documents.
Decision Making and Managing Strategy (Iterative tasks in making decisions…
Decision Making and Managing Strategy
Themes
models
conditions - certainty, risk
types of decisions
style - autocratic, consulting
Iterative tasks in making decisions
develop alternatives
compare alternatives and choose
set goals, weight and criteria
recognise problem or opportunity
monitor choice
implement choice
dilemmas in these tasks
may miss a step or spend to much time on some
developing alternative costly
iterative, not sequential
setting and weighting criteria
Type of decisions
Strategic or operational
programmed or non-programmed
Programmed
resolve by procedures, rules, policies and quantitative analysis
familiar, structured problems and information known
non programmed
unfamiliar, unique problem, information unclear
resolution depends on judgement, intuition, negotiation and creativity
commitment to action
at all levels
visible decisions embedded in wider process of decision making
dependent or independent
Decision making conditions
risk
enough information to estimate
uncertainty
goals clear but lack information to decide action
Certainty
all information available
ambiguity
goals and how to reach them are unclear
Decision making models
Computational - rational
economic assumptions, maximising gains, full information, goals known and agreed
valuable when situation has these features
Judgemental
bounded rationality - people process limited amount of info
satisficing - rather than maximising, people select the first option that is good enough
descriptive model of how people deal with non programmed decisions
agreement on goals
Compromise
how decision made when disagreement over means
diverse interest groups
information ambiguous
decisions the result of bargaining and political behaviour among players
Inspirational
need to come together in a choice opportunity e.g. meeting
PPS are independent and decision taken only when all three come together
decisions require
participants
problems
solutions
plausible in high certainty environments
Biases in making decisions
optimism
illusion of control
representativeness
emotional attachment
Prior hypothesis
escalating commitment
integrating themes
internationalisation - balance integration and diversity
Governance and control - biases
sustainability - decision process support aim
entrepreneurship - small firms decisions more centralised, less formal
Strategic decisions commit substantial resource and shape long-term future
perspectives on the strategy process
Learning View - strategy adaptive process
political view - bounded rationality recognises human limits,
Planning view - belief that complexity requires formalised approach
Linear view - identify, analyse, formulate, implement, evaluate
How to develop strategies
Whittington - see strategizing and organising as simultaneous practical activities
Sull - the strategy loop
GRant - co-ordinate strategies proposed by business units
analysis
internal - combine resources
external
SWOT
S & W - compare with competition
O & T compare with five forces and PESTEL
Making Sense
focus on linkages
enhance value
discourage imitation
reduce cost
Identifying the opportunities
what are the opportunities in the environment
what the organisations resources capabilities
Identifying mission as a basis for goals and strategies
weakneses
management fails to develop wide belief in the mission
fail to recognise capabilities
unrealistic
mission statements clarify principal activities, aims, values and stakeholders
making things happen
merger and acquisition
allow rapid entry into new areas - difficulty of merging cultures
joint ventures and alliances
limits risk, allows learning
internal development
Expand or redeploy resources - retain control
making revisions
compare achievements with plans
evaluation leads to learning
implementing turns plan into action
Integrating themes
sustainability - for environment needs to be part of strategy
internationalisation - may fail as directors underestimate the complexity of working overseas
Entrepreneurship - public organisation with trouble meeting demand may offer opportunities for entrepreneurs
Governance - evidence of directors taking more responsibility for strategy, as well as for narrow governance responsibilities