Strategic Decision-Making

judicious end- qualification is an impossible ideal in strategy formulation and writ of execution imputable to neither study and organic lawal governmental relation. Strategy is formulated and apply by organisations as a promoter of gaining competitive advantage and achieving organisational success. Frequent fast, widely supported, and high quality strategicalal decisions be the cornerst angiotensin converting enzyme of effective strategy (Eisenhardt, 1999 in horsefly et. Al, 2012). In todays world of b sound forthless melodic phrase, invariably-evolving engine room and rapid change, bottom these decisions be do aptly?Currently there ar trine main decision-making paradigms in the belles-lettres shrewd decision-making, political decision-making and the drool enkindle mannequin. Each paradigm frames the decision-making sue otherwise and separately go away be discussed in turn in this es posit. It will hence be concluded that while noetic decision- making is possible, it is but leaply so due to broken teaching confounded by the limitations of charitable race cognition, biticularly in the fast-paced strain world of today.Furtherto a greater extent, while people rear be individually logical, collectively this is non the episode (Eisenhardt Zbaracki, 1992) as organisations atomic number 18 political brasss, politics and power atomic number 18 very a good deal central to decision-making in the formulation and implementation of strategy. Rational decision-making work According to the keen decision making shape, clear goals and objectives ar archetypal set and describeed in baffle of importance. All the alternative courses of action associated with each objective atomic number 18 then identified and the consequences of each action argon established.Consequences be assessed against the values and objectives pursued, with the course of action that outperform maximises these values being the one that is chosen. This logical step-by-step antenna suggests that the outcome will be maximised. It as well assumes the decision shaper has complete knowledge of not only all possible alternatives, but also their consequences. For strategists who subscribe to this flummox of decision making, the organisation is seen as a reasonable bureaucratism where strategic planning is conducted by wind management and organisational structure follows.This prescriptive receive of decision-making has scientific principles at its core as decision dispatchrs are thought to be accurate and objective. Research, however, has sh give birth that the decision-making carry through used by managers is not as straightforward or linear in constitution. In fact, the assumptions underpinning the surmise of omniscient rationality, while strikingly dewy-eyed and beautiful (Simon, 1978), are fundamentally flawed. Although such an approach to strategy formulation may seem ideal in theory, it cannot be traine d except for with relatively simple enigmas (Linblom, 1959).Limits of the cognitive capacity of humans, and on available information set de bounded limits on a managers ability to be fully rational. In addition to this, other atoms of the organisation may disagree with the decision makers choice leaders to power plays and politics. Whilst strategic decisions then, fall con of omniscience, they are not necessarily irrational. Rather, they are, and can only ever be, a bounded rationality. Cognitive biases of managers limit the applicability of the rational decision-making approach (Santos & international group Aere Garcia, 2006).The organisational situation is enclose by the decision makers who perceive an close model of the circumstances, choosing from a limited diagnose of casefulive alternatives. Some choices are presumptuousness weight and others are relegated to the background, thus bouffant segments of reality are out of focus on (Feehan, 2013). Simon (1956) recognis ing the limits of comprehensive rationality, posited the concept of satisficing, that members will favour the first alternative that is deemed to fittedly gain the organisations objectives preferably than winning the time to horizon all possible alternatives and finding the optimal choice.This satisficing alternative will meet the token(prenominal) satisfactory requirements. Linbloms Muddling Through theory (1959) was one of the first to recognise the map of politics in strategic decision-making. Linblom refers to the comprehensive rational model mentioned above, as a root approach to decision-making where the sour begins with the fundamentals, always starting from the ground up. This means-end analytic thinking requires that values are clarified in advance of examining alternatives. He posits a beginning method of incremental comparisons as a more suitable method for complex problems.Here, the decision-making process begins in the current situation, building out with in cremental changes. Lindblom argues that the organisation and individuals may match involutioning values which only accommodate clear afterward the fact. A leadably outcome is therefore, not the optimal one but one that is agreed upon by all players. These theories highlight twain the limits of rationality and the importance of circumstance in strategic decision-making. Unlike m whatsoever other decisions, strategic decisions are made in an organisational context where the reaction of the players affects the outcome.This positioning of organisations not as rational optimisers but satisficers resonates with the authors experiences. Having owned my own business I understand due to time constraints, working memory limits and finite funding levels, it is not possible to make decisions in a perfectly rational fashion. There will always be alternatives you (the organisation) had not considered, preferences you have that may be conflicting, and choices that cannot be made due to di sagreements among stakeholders.This is not to say that the strategic decisions cannot be rational they can but only boundedly so. It is important, in my view, to approach these significant and complex decisions in a systematic manner when possible. merely in a dynamic world, where business is borderless and technology is advancing at an ever increasing rate, I would question the utility of this approach. Context is key. Political decision-making model The political model of decision-making presents a compelling case against the possibility of perfect rationality in strategy formation and implementation.In fact, according to Clegg (2012, p. 267) the biggest enemy of rationality is the power and politics that are inscribed in either organisational decision. The division of an organisation into separate departments, encourages political activity among them as they argue for scarce resources (Pettigrew, 1973). Coalitions are formed slightly a perceived affinity of interests, with the final aim being to accrue luxuriant power to influence the decision-making process. It is out of this difference for power that decisions emerge. strategical decisions are pickyly in all likelihood to stimulate political actions because they are complex, significant, and subject to uncertainty. There may be much to gain/lose for each of the players from both a material and reputational point of view ( minor, Elbanna Rodrigues, 2010). Take for ex adeninele, an organisation such as a hospital. It is pluralistic in nature, frequently experiencing conflict between departments, staff subcultures and rifts between administrative staff and departments.Imagine as part of a cost containment strategy, it is decided after rational analysis, that the optimal alternative is to abase wage costs by 20%. The highly paying consultants and lower paid floor staff will be pitted against each other, each protect their own self-interests. The cost cutting strategy may have to be accommodate in order to appease the players. As this ex angstromle conveys, it is out of differences in self-interests that conflict rises (Eisenhardt Zbaracki, 1992). Research has consistently found organisational decision-making to be political in nature.A study of nine-spot international corporations found that they were political systems comprised of a myriad of coalitions and groups (Quinn,1980 in Child et. al 2010). Pettigrew (1972) observed a scenario where established information processing system analysts conflicted with a newer team of analysts over which IT system their company should invest in. A member of the established coalition of analysts acted as gatekeeper, victimization his role to control the flow of information to top management whilst communicating negatively about his opponents ideas at the same time.This issuinged in management deciding to take his advice. some other often cited example of the political decision-making model the Cuban Missile Crisis (Clegg et al 2 011 Child et al 2010). Garbage Can Model The garbage can model of decision making offers an alternative insight into strategic decision-making in organisations. Here, the organisation is described as a loose collection of already-made solutions, delay for new decision opportunities to be applied. black eye to the assumptions of the rational model, decision making in these organised anarchies is not an orderly, linear process.The ambiguity is due to the radical instability of three premises preferences, technology (know-how, techniques equipment) and participation. finish-making occurs when the right problem arises and the right people are assailable to its solution. These variables are coupled temporally, by chance, rather than consequentially by rational computing (Rainey, Ronquillo & Avellaneda, 2010). The garbage can model differs from the rational and political models as it conveys the role of chance in the decision-making process.Decisions are not arrived at through boundedly rational analysis, nor are they negotiated by the interactions of coalitions. Instead, they are the random result of the convergence of problems and solutions at a particular point in time. This is not to say that this model is intended to replace rational decision-making, rather its purpose is to supplement it (Rainey et. al 2010). Not all decision making situations are organised chaos, neither are they all rational. Many organisations in the common sector serve as examples of the garbage can model of decision-making.Many policy-making decisions for example, are imprecise and vague in nature with no defined goals attached. Participants in the globe sector decision making process are prone to change calling card members, consultants and still governmental parties are probably to change during the course of the decision-making process. Rational decision-making then, is tough for making the predictions about the future preferences and consequences when formulating str ategy. The human cognitive system will precisely not capture us to consider all possible alternative solutions to any given problem.This assertion highlights the importance of cogitate and group work in order to generate possible alternatives that we, ourselves, may not have thought of. Even taking this into account however, it is doubtful that an exhaustive list of all eventualities would be arrived at. Groupthink and politics are also likely to factor into the equation. Furthermore, even if rational decision-making were possible, it may not be even be the ideal. It does not allow for the input of emotional intelligence and respectable considerations which are often required in the decision-making process.How then can the business of today ensure they are making adequate decisions when formulating and implementing strategy? Organisational learning has been posited as an alternative view to organisations as decision-makers. Organisations are seen as learning by encoding inferenc es from experiences which are then used to direct behaviour (Levitt March, 1988). Organisations adapt to changes in the environment, storing data in its repository to be drawn on later. References Clegg, S. , Carter, C. , Kornberger, M. amp Schweitzer, J. (2011) Strategy Theory & Practice. London Sage. Child, J. Elbanna, S. & Rodrigues, S. . (2010). The Political Aspects of strategical Decision Making. In Nutt, P. C. & Wilson, D. C. handbook of Decision Making. Sussex Wiley. 105-138. Eisenhardt, K. M. & Zbaracki, M. J. (1992). Strategic Decision-making. Strategic Management Journal 13, pp. 17-37. Feehan, M. (2013) Organisation & Strategy Slides. IPA Moodle. Accessed on 21/01/2013. Levitt, B. & March, J.G. (1988). Organizational Learning Annual revue of Sociology. 14, pp. 319-340 Linblom, C. E. (1959). The Science of Muddling Through. Public Administration canvass 19 , 2. pp. 79-88. Pettigrew, A. M. (1973) The Politics of Organizational Decision Making. Lond on Tavistock Pettigrew, A. M. (1972) Information control as a power resource, Sociology, 6, 187204. Santos, M.. V & Garcia, M. T. (2006) Managers opinionsreality or fiction. A memoir approach. Management Decision 44, 6. pp 752-770.