Strategic Management
Strategic management is the set of managerial and strategic decision-making processes that promote sustainable human development with supportive strategies, policies, laws and procedures, educated and skilled workforce to provide the foundation to plan, implement and review the organization's strategies and sustainable growth. The primary focus of the strategic management solutions is to reduce and/or eliminate the failure risks associated with organizational transformation and changes through improved decision-making on strategy selection in the strategy formulation stage, strategy implementation, and better controls to guide decisions in successful strategy execution. In order to deliver value strategies have to be implemented and executed; effective development methods assure that properly formulated strategies can be successfully implemented and executed.
Strategic management is the set of managerial and strategic decision-making processes that promote sustainable human development with supportive strategies, policies, laws and procedures, educated and skilled workforce to provide the foundation to plan, implement and review the organization's strategies and sustainable growth. The primary focus of the strategic management solutions is to reduce and/or eliminate the failure risks associated with organizational transformation and changes through improved decision-making on strategy selection in the strategy formulation stage, strategy implementation, and better controls to guide decisions in successful strategy execution. In order to deliver value strategies have to be implemented and executed; effective development methods assure that properly formulated strategies can be successfully implemented and executed.
Effective Strategy Formulation & Evaluation
Strategy formulation is one of the co-incident processes of strategy management, and involves the definition of corporate and competitive strategies. It is primarily an intellectual and creative act involving analysis and synthesis as well as judgment and innovation. The formulation process involves a number of steps, two of which must be performed constantly, namely: environmental scanning, and continuous implementation. The formulation steps include:
Strategy Formulation Prescriptive Model
The strategy formulation model is a options network model comprising options (decision points) that are grouped together into strategic options based on their contribution relationships to specified strategic objectives. A strategic option is a set of of related options that form a potentially strategy. The options network defines a behavioral view of strategy formulation. It is an intentional prescriptive model based on a strategic goal dependency relations model that defines various options including possibly options about product and services and about market segments - defined by both customer need and geography. There may also be options on what resources and capacities are needed and how to build these implementation options. Indicators of what's possible and what is required may well follow from the results of a strategic assessment.
The formulation model is a prescriptive model that informs answers to corporate strategy questions such as:
In addition, the model informs answers to business/competitive strategy questions such as:
The corporate strategy options (decision choices) frame and guide the decisions and choices that a company’s corporate executives, functions, and staff make every day including how they run operations, what they buy, what markets they enter, how they measure success, etc. The business strategy options drive functional strategies - i.e., the decisions that business unit management teams, functions, and staff make every day including pricing, R&D, who should be the customer, what should be the value proposition, where to manufacture, etc.
Functional Strategies
Strategy Analytics Simulation
In modeling strategy formulation, we are trying to modify the current objectives and strategies in ways to make the organization more successful. Strategy simulation enables managers to evaluate various strategic alternatives designed to reach performance goals (targets). The evaluation takes into account the related risks across each alternative in order to determine whether the potential returns are commensurate with the associated risks that each alternative brings. Strategic risk is a function of how poorly a strategy will perform if the “wrong” scenario occurs. Strategy analytics simulation produces a clear set of recommendations, with supporting justification, that revise as necessary the mission and objectives of the organization, and supply the strategies for accomplishing them.
Strategic choice refers to the decision-making process of selecting one option for implementation. An option is a course of action that it appears possible to take; the simplest form of choice is therefore between taking an option or not taking it - doing it or not doing it. 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 among the main means through which management choices are actually realized.
Testing Strategic Options
The strategic options resulting from the strategy formulation are evaluated to detrmine if they pass the following tests:
.Strategic Evaluation
Strategy evaluation involves appraisal of the more fundamental factors and trends that govern the success of a strategy in the chosen field of endeavor. The whole point about strategy is that the critical factors determining quality of long-term results are often not directly observable or simply measured; and by the time strategic opportunities/threats do directly affect operating results, it may well be too late for an effective response. Evaluation is based on a performance measurement system and testing of a strategy for critical flaws with respect to the following criteria:
The products of business strategy evaluation are answers to these questions:
The basic idea is to identify and resolve organizational problems and high-risk issues in the early stages (strategy formulation) of the strategy management life cycle prior to investment in implementation and execution of Strategic Options Simulation
Strategy formulation is one of the co-incident processes of strategy management, and involves the definition of corporate and competitive strategies. It is primarily an intellectual and creative act involving analysis and synthesis as well as judgment and innovation. The formulation process involves a number of steps, two of which must be performed constantly, namely: environmental scanning, and continuous implementation. The formulation steps include:
- Vision and Mission Formulation - This involves the identification and formulation of the organization's vision which sets out the reasons for the organization's existence and the "ideal" state that the organization aims to achieve; the mission identifies and formulates major goals and performance objectives.
- Environmental scanning - This involves analyzing the organization's external/internal environments to identify any opportunities and/or threats; and continuous monitoring of environments conditions for changes in environments' factors that may affect your organizations performance. The environmental scan can be performed within the framework of the Five Forces Model and SWOT Model, analyzes information about the external environment PESTEL factors, the industry, and internal environment factors.
- Values Assessment - Every organization has values, and these values should be coherent with the strategy. Values assessment involves looking into the personal values of the members of the organization, organization values, and the organization's operating philosophy.
- Strategic Options - This involves analyzing strategic issues and formulating the problem (expressed in terms of basic question) that must be addressed by options that provide creative alternatives to achieving the mission and vision.
- Strategic Choice - Selection of strategic options that look at (1) offering quality products and services that customers will need in the future, (2) taking advantage of new technology, (3) being prepared for future environmental factors or calamities, (4) responding to possible new substitutes or the predatory actions of rivals, (5) anticipating future needs before competitors do.
Strategy Formulation Prescriptive Model
The strategy formulation model is a options network model comprising options (decision points) that are grouped together into strategic options based on their contribution relationships to specified strategic objectives. A strategic option is a set of of related options that form a potentially strategy. The options network defines a behavioral view of strategy formulation. It is an intentional prescriptive model based on a strategic goal dependency relations model that defines various options including possibly options about product and services and about market segments - defined by both customer need and geography. There may also be options on what resources and capacities are needed and how to build these implementation options. Indicators of what's possible and what is required may well follow from the results of a strategic assessment.
The formulation model is a prescriptive model that informs answers to corporate strategy questions such as:
- What business should the organization be in?
- What should be the organization’s comparative advantage in adding value to its individual businesses?
- What should be the capabilities that distinguish the organization?
In addition, the model informs answers to business/competitive strategy questions such as:
- Who should be the customers that define the target market?
- What should be the value proposition that differentiates the products and services offered to those customers?
- What should be the capabilities that make our business better than any other in delivering that value proposition?
The corporate strategy options (decision choices) frame and guide the decisions and choices that a company’s corporate executives, functions, and staff make every day including how they run operations, what they buy, what markets they enter, how they measure success, etc. The business strategy options drive functional strategies - i.e., the decisions that business unit management teams, functions, and staff make every day including pricing, R&D, who should be the customer, what should be the value proposition, where to manufacture, etc.
Functional Strategies
- Marketing strategy deals with product/service choices and features, pricing strategy, markets to be targeted, distribution, and promotion considerations.
- Financial strategies include decisions about capital acquisition, capital allocation, dividend policy, and investment and working capital management.
- Production or operations functional strategies address choices about how and where the products or services will be manufactured or delivered, technology to be used, management of resources, plus purchasing and relationships with suppliers. For firms in high-tech industries,
- R&D strategy may be so central that many of the decisions will be made at the business or even corporate level, for example the role of technology in the company's competitive strategy, including choices between being a technology leader or follower. However, there will remain more specific decisions that are part of R&D functional strategy, such as the relative emphasis between product and process R&D, how new technology will be obtained (internal development vs. external through purchasing, acquisition, licensing, alliances, etc.), and degree of centralization for R&D activities.
- Human resources functional strategy includes many topics, typically recommended by the human resources department, but many requiring top management approval. Examples are job categories and descriptions; pay and benefits; recruiting, selection, and orientation; career development and training; evaluation and incentive systems; policies and discipline; and management/executive selection processes.
Strategy Analytics Simulation
In modeling strategy formulation, we are trying to modify the current objectives and strategies in ways to make the organization more successful. Strategy simulation enables managers to evaluate various strategic alternatives designed to reach performance goals (targets). The evaluation takes into account the related risks across each alternative in order to determine whether the potential returns are commensurate with the associated risks that each alternative brings. Strategic risk is a function of how poorly a strategy will perform if the “wrong” scenario occurs. Strategy analytics simulation produces a clear set of recommendations, with supporting justification, that revise as necessary the mission and objectives of the organization, and supply the strategies for accomplishing them.
Strategic choice refers to the decision-making process of selecting one option for implementation. An option is a course of action that it appears possible to take; the simplest form of choice is therefore between taking an option or not taking it - doing it or not doing it. 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 among the main means through which management choices are actually realized.
Testing Strategic Options
The strategic options resulting from the strategy formulation are evaluated to detrmine if they pass the following tests:
- Aligned - in that it (strategic option) conforms to the strategic intent This test answers the question: "Does this option take us towards where we want to go?"
- Feasible - in that the capacities and resources necessary for success can be made available. This answers the question: "Will it work?"
- Acceptable - in that it (strategic option) will win the approval of those who have to approve it and those who will have to implement it.
.Strategic Evaluation
Strategy evaluation involves appraisal of the more fundamental factors and trends that govern the success of a strategy in the chosen field of endeavor. The whole point about strategy is that the critical factors determining quality of long-term results are often not directly observable or simply measured; and by the time strategic opportunities/threats do directly affect operating results, it may well be too late for an effective response. Evaluation is based on a performance measurement system and testing of a strategy for critical flaws with respect to the following criteria:
- Consistency - The strategy must not represent mutually inconsistent goals and policies.
- Consonance - The strategy must represent adaptive response to the external environment and to the critical changes occurring within it.
- Advantage - The strategy must provide for the creation and/or maintenance of a competitive advantage in the selected areas of activity.
- Feasibility . The strategy must neither overtax available resources not create unsolvable sub-problems.
The products of business strategy evaluation are answers to these questions:
- Are the objectives of the business appropriate?
- Are the major policies and plans appripriate?
- Do the results obtained to date confirm/refute critical assumptions on which the strategy rests?
The basic idea is to identify and resolve organizational problems and high-risk issues in the early stages (strategy formulation) of the strategy management life cycle prior to investment in implementation and execution of Strategic Options Simulation
Strategy Implementation
Strategy implementation involves decisive decisions and activities undertaken at all levels in the organization in order to turn the formulated (corporate and competitive/business) strategy into reality. These strategic decisions are the main means through which management choices are actually realized, and they are long-term in their impact, and effect and change the direction of the whole business organization. Normally corporations change their strategies to re-position themselves and adapt or react to changes in market opportunities and threats. Strategy implementation provides the connecting loop between formulation and execution, and control. Strategy implementation consists of all the decisions and activities under taken at all levels in the organization required to produce outputs - such as strategic assets - that successfully turn the formulated corporate strategies and business strategies into reality. Successful strategy implementation is, key for any organization's survival. Successful strategy implementation involves the development of policies, procedures and practices that aim at moving the organization towards its strategic objectives and goals.
Strategy Implementation Models
The implementation model is a bipartite decsion-action graph that extends the strategic choices from the strategy formulation model through elaboration by connecting each strategic choce (selected strategic options) to a set of planned courses of action networks which are mapped to organizational methods. Strategic choice refers to the decision-making process of selecting one option for implementation. An option is a course of action that it appears possible to take; the simplest form of choice is therefore between taking an option or not taking it - doing it or not doing it. A strategic decision is decisive in that it is actionable - "in terms of actions taken, the resources committed, or the precedents set”.
Operations Strategy and Plan
Operations strategy binds the various operations decisions and actions into a cohesive consistent response to competitive forces by linking form policies, programs, systems, and actions into a systematic response to the competitive/strategic priorities chosen and communicated by the corporate or business strategy. Operations plans set out the objectives, functions, priorities, and obligations of each operation, process or department of an entity. The aim of these plans is to direct the organization and ensure operational control. The contents of operational plans are directed at explaining actions or programs that will be needed to achieve or implement parts of that strategy. Operations plans set out the objectives, functions, priorities, and obligations of each operation, process or department of an entity. The aim of these plans is to direct the organization and ensure operational control. The contents of operational plans are directed at explaining actions or programs that will be needed to achieve or implement parts of that strategy.
Strategy Implementation Gap Analysis
The relevant and appropriate actions are identified and they drive implementation gap analysis which may be defined systematically in terms of organization "capacity development". It involves assessment and analysis to identify any gaps between where the organization is now (current state) and the future states (where it wants to be as the strategies call for). Capacity Assessment should start from the assumption that there are existing capacities of an organization that can and should be built upon. The capacity assessment compares desired capacity against existing capacity. It is important to define realistic goals with realistic time frame for developing capacities.
Strategy Implementation Evaluation Method
The implementation evaluation method provides an intuitive way to validate the alignment of organizational structures with selected strategies; alignment of culture in support of the strategy and the organization units and position assigned the responsibility actions connected with the selected strategy; and acquiring, mobilizing and focusing resources to accomplish the tasks necessary to achieving the strategic objectives. The method allows subject-matter domain experts to define a rank-order of preference relations between the courses of action, expected outcomes and effects in the current situation/state that may be used to project possible "blind alleys", and "black holes" in future situations.
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 among the main means through which management choices are actually realized. Strategy implementation model aligns formulated strategies with organizational methods that realize those strategies. 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.
Strategy implementation requires administrative and managerial skills, and the ability to for see obstacles that might arise and cause implementation to fail. Successful strategy implementation requires that all the key supporting elements of the business systems including Measures and Rewards, Structures and Processes, Culture and People be aligned behind the chosen strategies and hinged on the mission, vision, values and critical success factors (CSF) of the organization. Strategy implementation may fail for a myriad of reasons including the following factors:
All these factors are interdependent and influence each other as well as implementation success/failure to varying degrees. Because they are interdependent and their influences are non-deterministic it is typically very difficult for managers to comprehend the contribution of these factors to implementation success or failure. If an organization fails to pay proper attention to one of them, it can result in implementation failure therefore, we need a systemic approach to understanding the influences of these factors.
Strategy implementation involves decisive decisions and activities undertaken at all levels in the organization in order to turn the formulated (corporate and competitive/business) strategy into reality. These strategic decisions are the main means through which management choices are actually realized, and they are long-term in their impact, and effect and change the direction of the whole business organization. Normally corporations change their strategies to re-position themselves and adapt or react to changes in market opportunities and threats. Strategy implementation provides the connecting loop between formulation and execution, and control. Strategy implementation consists of all the decisions and activities under taken at all levels in the organization required to produce outputs - such as strategic assets - that successfully turn the formulated corporate strategies and business strategies into reality. Successful strategy implementation is, key for any organization's survival. Successful strategy implementation involves the development of policies, procedures and practices that aim at moving the organization towards its strategic objectives and goals.
Strategy Implementation Models
The implementation model is a bipartite decsion-action graph that extends the strategic choices from the strategy formulation model through elaboration by connecting each strategic choce (selected strategic options) to a set of planned courses of action networks which are mapped to organizational methods. Strategic choice refers to the decision-making process of selecting one option for implementation. An option is a course of action that it appears possible to take; the simplest form of choice is therefore between taking an option or not taking it - doing it or not doing it. A strategic decision is decisive in that it is actionable - "in terms of actions taken, the resources committed, or the precedents set”.
Operations Strategy and Plan
Operations strategy binds the various operations decisions and actions into a cohesive consistent response to competitive forces by linking form policies, programs, systems, and actions into a systematic response to the competitive/strategic priorities chosen and communicated by the corporate or business strategy. Operations plans set out the objectives, functions, priorities, and obligations of each operation, process or department of an entity. The aim of these plans is to direct the organization and ensure operational control. The contents of operational plans are directed at explaining actions or programs that will be needed to achieve or implement parts of that strategy. Operations plans set out the objectives, functions, priorities, and obligations of each operation, process or department of an entity. The aim of these plans is to direct the organization and ensure operational control. The contents of operational plans are directed at explaining actions or programs that will be needed to achieve or implement parts of that strategy.
Strategy Implementation Gap Analysis
The relevant and appropriate actions are identified and they drive implementation gap analysis which may be defined systematically in terms of organization "capacity development". It involves assessment and analysis to identify any gaps between where the organization is now (current state) and the future states (where it wants to be as the strategies call for). Capacity Assessment should start from the assumption that there are existing capacities of an organization that can and should be built upon. The capacity assessment compares desired capacity against existing capacity. It is important to define realistic goals with realistic time frame for developing capacities.
Strategy Implementation Evaluation Method
The implementation evaluation method provides an intuitive way to validate the alignment of organizational structures with selected strategies; alignment of culture in support of the strategy and the organization units and position assigned the responsibility actions connected with the selected strategy; and acquiring, mobilizing and focusing resources to accomplish the tasks necessary to achieving the strategic objectives. The method allows subject-matter domain experts to define a rank-order of preference relations between the courses of action, expected outcomes and effects in the current situation/state that may be used to project possible "blind alleys", and "black holes" in future situations.
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 among the main means through which management choices are actually realized. Strategy implementation model aligns formulated strategies with organizational methods that realize those strategies. 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.
Strategy implementation requires administrative and managerial skills, and the ability to for see obstacles that might arise and cause implementation to fail. Successful strategy implementation requires that all the key supporting elements of the business systems including Measures and Rewards, Structures and Processes, Culture and People be aligned behind the chosen strategies and hinged on the mission, vision, values and critical success factors (CSF) of the organization. Strategy implementation may fail for a myriad of reasons including the following factors:
- Leadership Style - The way leadership and management behave , communicate vision and mission, coordinate activities, etc.
- Availability of Accurate Information - System of processes and information flows that link the organization together.
- Uncertainty - Unpredictable problems due to limited knowledge of current conditions and future outcomes.
- Organizational Structures - The way people and tasks/work are organized and roles and responsibilities are assigned to people aligned with strategy.
- Organizational Culture - This refers to the particular way the organization solves problems of survival through adaptation to external environment and internal integration which is supportive of the strategy.
- Human Resources - Adequacy of competencies, knowledge and skills of people.
- Technology - Unpredictable problems due to changes in technology.
All these factors are interdependent and influence each other as well as implementation success/failure to varying degrees. Because they are interdependent and their influences are non-deterministic it is typically very difficult for managers to comprehend the contribution of these factors to implementation success or failure. If an organization fails to pay proper attention to one of them, it can result in implementation failure therefore, we need a systemic approach to understanding the influences of these factors.
Effective Strategy Execution Management & Control
Strategy execution is one of the three (3) co-incident determinants of the strategic management process including strategy formulation and implementation. It involves the decisions and activities undertaken, at all levels in the organization including the continuous process of mobilizing organization resources to execute actions that change the organization from a current-state to a new state of organization and reflected in changes in factors such as capability, culture, behavior, governance, organization structures and strengths. Strategy execution occurs at all levels in the organization and involves top management through middle management to the front-line managers and workers in order to turn implemented strategy into commercial and/or social success. The actual strategy of an organization emerges from execution involving the thousands of decisions made every day by employees acting according to information they have and their own self-interest.
Controlling the strategy is done through regular strategy execution review meetings using periodic (often monthly or weekly) progress reports or dashboards for executives and managers. Monitoring progress creates feedback about the performance of the strategy and its execution allowing organizations to make adjustments accordingly.
Strategy Execution System - Goal Oriented Model
The Strategy Execution and Control System model is a bipartite graph of options and action networks. It is operationalized through assignment of options and actions to specified roles and positions filled by human actors that are held accountable and responsible for achieving the objectives and goals associated with their respective assignments. The organization goals are derived from the vision and mission statement goals, as well as the strategic objectibes. The organization goals are then refined down to operational level goals and specifications of data to be collected, analyzed through visualization and interpreted with respect to the original goals.
Performance Measurement and Management System
The execution system supports users in monitoring the strategy implementation and execution performance through balanced scorecard driven by a strategy map of the strategic initiatives and programs. The strategic goals are translated into operational goals with performance indicators needed to monitor and assess whether the objectives are being achieved. After the performance indicators, targets and milestones of the strategy and its execution are specified they are organized into a system based on the strategy map model. Such a management control system monitors and controls the strategy and its execution.
The results and outcomes of strategic decisions and activities that may include big strategic decisions like new products launch, to week-in, week-out decisions about marketing, procurement, and customer service as well as day-to-day operations decisions on resource allocation, job prioritization and interfacing with customers to quickly respond to new opportunities and threats while coordinating with other parts of the organization on an ongoing basis.
Benefits of Strategic Execution System
The execution system provides the cognitive structure within which strategic change taking place in the organization can be evaluated and analyzed to improve understanding. Strategy execution simulation provides additional source of feed forward information that allows management to assess whether the overall strategy should be changed in light of unfolding events and results associated with incremental steps, and actions that implement the overall strategy. The benefits and value of simulating strategy execution and control include:
Strategy execution is one of the three (3) co-incident determinants of the strategic management process including strategy formulation and implementation. It involves the decisions and activities undertaken, at all levels in the organization including the continuous process of mobilizing organization resources to execute actions that change the organization from a current-state to a new state of organization and reflected in changes in factors such as capability, culture, behavior, governance, organization structures and strengths. Strategy execution occurs at all levels in the organization and involves top management through middle management to the front-line managers and workers in order to turn implemented strategy into commercial and/or social success. The actual strategy of an organization emerges from execution involving the thousands of decisions made every day by employees acting according to information they have and their own self-interest.
Controlling the strategy is done through regular strategy execution review meetings using periodic (often monthly or weekly) progress reports or dashboards for executives and managers. Monitoring progress creates feedback about the performance of the strategy and its execution allowing organizations to make adjustments accordingly.
Strategy Execution System - Goal Oriented Model
The Strategy Execution and Control System model is a bipartite graph of options and action networks. It is operationalized through assignment of options and actions to specified roles and positions filled by human actors that are held accountable and responsible for achieving the objectives and goals associated with their respective assignments. The organization goals are derived from the vision and mission statement goals, as well as the strategic objectibes. The organization goals are then refined down to operational level goals and specifications of data to be collected, analyzed through visualization and interpreted with respect to the original goals.
Performance Measurement and Management System
The execution system supports users in monitoring the strategy implementation and execution performance through balanced scorecard driven by a strategy map of the strategic initiatives and programs. The strategic goals are translated into operational goals with performance indicators needed to monitor and assess whether the objectives are being achieved. After the performance indicators, targets and milestones of the strategy and its execution are specified they are organized into a system based on the strategy map model. Such a management control system monitors and controls the strategy and its execution.
The results and outcomes of strategic decisions and activities that may include big strategic decisions like new products launch, to week-in, week-out decisions about marketing, procurement, and customer service as well as day-to-day operations decisions on resource allocation, job prioritization and interfacing with customers to quickly respond to new opportunities and threats while coordinating with other parts of the organization on an ongoing basis.
Benefits of Strategic Execution System
The execution system provides the cognitive structure within which strategic change taking place in the organization can be evaluated and analyzed to improve understanding. Strategy execution simulation provides additional source of feed forward information that allows management to assess whether the overall strategy should be changed in light of unfolding events and results associated with incremental steps, and actions that implement the overall strategy. The benefits and value of simulating strategy execution and control include:
- Improving the viability of strategic decisions by improving decision makers' knowledge about external environment factors and possible reactions of environment actors (stakeholders) such as customers, competitors, and broader public (i.e., society, regulators, community, investors - the world). .
- Improving managers' capacity to overcome the cognitive burden associated with the inter-relationships among strategic choices. For example, the strategic decision to enter a new market will require major allocation of resources across different parts of the organization such as marketing, finance, operations, etc.
- Improving managers' understanding in that their choice of assumptions is arbitrary and might not accord with reality, and exposing strategic decisions that logically flow from bad or erroneous assumptions to risk of leading to bad or poor decisions.
- Improving managers' awareness of individual differences in strategic choices due to differences beliefs and assumptions leading to better negotiated strategic decisions.
- Reducing Chances of Bad Decisions -The nature of strategic decisions makes it possible for example, for decision makers e.g., managers within an organization, to have widely varying and incorrect beliefs about environmental factors such as market facts, for example Customers’ utility for a product/service, and managers’ perceptions of the customers’ perceptions of quality for that product/service to be inversely related. These beliefs influence the choice of assumptions underlying the manager’s strategic decisions and determine decision success/failure. Most managers don’t understand that their choice of assumptions is arbitrary influenced by their beliefs and that they might not accord with reality so strategic decisions logically flowing from bad/erroneous assumptions can lead to bad/poor decisions which can in turn lead to poor/bad decisions and ultimately to strategies failing at execution.
