Copyright Interactive Design Labs 2005 - 2017
Strategic decisions are the product (outputs) of strategic decision-making processes. Strategic decision-making is an ongoing cognitive process whose outcomes are usually contingent on the behavior of other actors (individuals or organizations) affected by the decision’s outcomes. These recursive relationships between decisions, decision outcomes, and effects of other actors' behavior make strategic decisions messier and complex. Strategic decisions are long-term in their impact; they affect and change the direction of the whole business/organization. They are difficult or expensive to reverse because they substantially alter (and irrevocably so in the short run) the relationships between the decision makers' organization and customers, competitors, etc. Strategic decisions are among the main means through which management choices are actually realized. A decisive strategic decision is one that is “important in terms of the actions taken, the resources committed, or the precedents set”.
Factors Influencing Success/Failure of Strategic Decision-Making
The most troublesome challenges in dealing with strategic decisions from a decision analytics perspective are technical complexity and social complexity. Complexity is the state of a system having many parts connected or related to each other. This is one of the biggest barriers to successful strategy execution.
This involves the presence of high levels of uncertainty and decision complexity.
The sources of Social Complexity may derive from:
Examples of Strategic Decisions and Decision-Making
Strategic decision-making processes can be identified by the strategic 'issues', events or factors that trigger them. These triggers may include observed issues such as decrease in sales or sales growth, a new product entry by competitor(s); and events such as request for action from executive management, or simply a regular planning cycle. Examples of strategic decisions include:
Improving Strategic Decision Through Modeling
Strategic decisions and decision-making can be improved and made to work most effectively through analytic decision models to enable systematic integration of each decisive strategic decision (with connected network of actions) with others in the context of the organization as system. This provides the support to:
Strategic decisions deal with the future and always represent risk. They typically involve high degree of uncertainty, high stakes, major resource implications, and long-term consequences.
I am a serial technology entrepreneur and computer scientist interested in model-driven analysis and evaluation of strategy, its formulation, implementation and execution, to better inform strategic decision-making, and improve organization performance and ensure sustainable growth.