In fact, the quality of actions by people well depends on the quality of decisions taken by management. In case otherwise, decision-making is a wasteful activity; involving only a sheer wastage of the time, energy and efforts of managers, and precious organisational resources. They keep these solutions and use them when the problems occur within the organization. Where marketing decisions are short term, strategic decision making might consider a long term initiative, such as launching a very new and innovative product, or changing the existing product lines radically. (2) Strategic decisions usually bring long-term financial and non-financial commitments to the organizations and it’s usually difficult to reverse the strategic decisions once they are implemented in the organizations. Our academic experts are ready and waiting to assist with any writing project you may have. You will not plan it when there is a product launch nearby. Senior managers select this approach in the strategic decisions which involve tradeoff between different organizations or between different parties within the organization.

The importance of strategic decisions is undeniable, so it is worth exploring its process and any factor pertaining to it. It is the thread that runs through the whole fabric of management. Under such circumstances, managers cannot be absolutely rational. What is strategic decision making and what does it involve? Strategic decisions are basically long term decisions, which affect the way the company moves forward. Strategic Management – Concept, Process, Decision & Types Strategic Analysis – External Analysis, PEST, Porter’s Approach to industry Some of the most well-known are introduced in this course paper: This model, also known as “the rational comprehensive” model, is based upon the famous economic approach in which the ultimate goal of any action or change is maximizing the efficiency of specific criteria by choosing the best option. Plagiarism Prevention 4. (3) For example, moving towards cost leadership strategy managers may reduce the number of workers which is an operational decision and it can be achieved by some administrative decisions. In this categorization, the models are separated based on their main feature, context or application (5). It may also extend to control mechanisms for guiding the implementation of the strategy. The final list includes all the possible decisions and the probabilities of their success rate. Similar to human beings, organizations are dealing with the decisions that are made in them every single day. Strategic Decision Models Based on the Context and Application. When they respond, the market changes and you have to change your strategy accordingly. Therefore, a manager can evaluate only such alternatives, as could be analyzed with the help of techniques made available to him, by the organisation. Lintherland identified 7 steps in decision making process: 7. Similar to the mind map, a business can face many problems in the course of its run. It is not possible for management to predict future environmental conditions accurately. When a brain starts thinking, the central thought might have further branches, and these branches will have even more nodes (or sub branches if you want to call them). Sound decisions by managers lead to sound actions on their part; and, accordingly, better and efficient attainment of organizational objectives is facilitated. They asserted that: “decisions are dumped in a holding can – the garbage can for future use.” (Refr). In this model, like the 5 step decision model, the support system in the organization plays an important role and it’s crucial to track the outcomes continuously to modify the actions within the organization. Following are the major features or characteristics of managerial decision-making: Each and every decision of management major or minor must make, at least, some contribution towards the attainment of organisational objectives. Copyright 10. Based on its feature, the main application of this model is in technical environment where goals are accurately defined and there is an agreement on the criteria and measurement of goals. Whenever we make a schedule in our personal lives, we always start things when we have enough time in our hand. On the other hand, organisational decisions are those which are taken by managers, in the context of organisation and for furthering the objectives of the organisation. When? Minor or routine decisions, however, are taken by us; without ourselves realising the fact that a decision is being taken by us. Overall, a firm can move forward only if it has taken the necessary strategic decisions. On the other hand, due to time, knowledge and other limitations and restrictions, managers make decisions with uncertain and incomplete information. Prohibited Content 3.

a) The company creates a completely new operating norm in the market itself. Unit - VI . For instance, NASA uses the rational model since engineering factors, procedures, and goals are relatively clear and less ambiguous. Moreover, the service network is also to be planned before the launch, so that service issues are sorted out when there are problems after the product launch. In other words, this model provides people the opportunities to bring ideas and information to the table but they do not have real decision making power. For example, the decision of a person to buy a bottle of soft-drink on a scorching summer day is a decision; without the person, being aware of the fact, that a decision is being taken by him/her. Such tactical decisions are taken at middle and lower levels of management. What is competitive intelligence and its role in an Organization? Establishing a control and evaluation system (Lintherland, 2013). The highlight of the above distinction between personal and organisational decisions is that sometimes, personal decisions of managers have got organisational implications; and then such personal decisions must be taken by managers, in the best interests of the organisation. Casual decisions of a significant nature are taken at upper levels of management. In strategic decisions, managers try to harmonize organization capabilities and resources with the environmental opportunities and threats. Thus, it’s very difficult to recognize who will actually participate in a decision (Cohen et al., 1972). For example, a consumer will always try to maximize his satisfaction from the use of limited means, at his disposal by being fully rational in his approach to consumption. Any stakeholder group within the organization may have its own agenda and interests to pursue; therefore in this model, the stakeholders are encouraged to present their key concerns before decisions are made. Managers use garbage can model in highly ambiguous environments which called structured anarchies.

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