CONTEXTUAL INFLUENCE ON STRATEGIC DECISION METHODS
Top executives typically confront unstructured and important problems that cannot be solved using an objective, quantitative approach. The dissertation is initially concerned with the question of how managers go about searching for a solution, analyzing the alternatives, and sharing the authority to make a decision. More than eighty top managers of Deleware Valley corporations responded to a questionnaire requesting that they focus on the single most important decision made by them or with their participation within the last six months. After discarding those responses which did not meet the research criteria, a total of sixty-four decisions were available for analysis. Several decision-making models have been proposed by management experts. The classic approach revolves around the concept of rationality. Alternatives to the rational model include: bounded rationality, the behavioral model, incrementalism, and the political-bureaucratic model. It was assumed that the models do not compete to provide the best representation of strategic decision processes, but rather each of them is capable of representing adequately some subset of decisions. A number of possible underlying variables is examined to determine which contributes most to differentiate between methods. As a result, four dimensions emerge as the most important ones: (1) analysis of alternatives, which can be explicit or implicit, objective or intuitive; (2) search for possible solutions, which can be extensive or limited; (3) flexibility in the definition of the problem and specification of solution requirements; and (4) group behavior displayed by the advisory or decision-making group, measured in terms of the presence of interest groups, the diffusion of the process, and the extent to which individuals engage in bargaining. Based on combinations of these four dimensions, sixteen types of decision processes are described. The next research issue deals with the definition of circumstances under which each model is most likely to be applied. Three areas of influence on the determination of method are proposed: (1) the nature of the specific problem--not its content but its form--, manifest in characteristics such as importance, difficulty, and urgency; (2) the organizational environment, which can be described in terms of its uncertainty, complexity and stringency; and (3) the leadership style, expressed in terms of its participative approach and aggressiveness. The results indicate that knowledge of both the nature of the problem and the environment characteristics allows a significant improvement in the ability to predict the use of a decision approach. The dimensions chosen to represent the leadership style do not seem to have an important influence on the selection of a method. The research focuses on single strategic decisions. Strategic planning can be conceived as a system of such decisions. Therefore, the methods identified could be used to improve current understanding of various planning approaches. If the organizational environment is evaluated and the nature of the planning problem is established, it could become possible to recommend a planning model that would be the most appropriate for the given circumstances. However, validation of the extension of the decision-making results to planning methods lies beyond the limits of the current effort.
|Year of publication:||
|Authors:||STEIN, JORGE B|
|Type of publication:||Other|
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