Strategic Decision Making
Lecture 1: Integrative framework SDM 3
Lecture 2: Environmental + Organizational Context 8
Lecture 3: Top Management + Decision Context 15
Lecture 4: Process (intro) & SDM Process (pt. 1) 20
Lecture 5: The SDM process (pt. 2) 26
Lecture 6: Outcomes 31
Lecture 7: Open Strategy 36
Lecture 8: Forms of participation in strategy (pt.1) 41
Lecture 9: Forms of participation in strategy 45
Lecture 10: Advanced Topic: Strategy Restoration 50
Lecture 11: History and Future in Strategy: Strategic Foresight 54
EXAM QUESTION = open question about the transition point between process and
outcome or context and process
1
,2
,Lecture 1: Integrative framework SDM
What are strategic decisions?
Uncertainty is one of the key aspects of strategic decision making
(Hickson et al., 1986: 37)
We make decisions all day:
● Some decisions need additional information
● We ask advice for some decisions
● Some decisions are made on the basis of pre-existing heuristics
● We try to narrow down the number of alternatives
● Organizations are also confronted with decision-situations
● The key challenge to any decision is the reduction of uncertainty
Example of strategic decision:
A publisher’s decision to publish 500 copies of Harry Potter
● Turned down by 22 other publishers
● The 2016 worth of the franchise is estimated at $25 billion!
● Why did Bloomsbury publish it (1996)?
Test with their own child, the child loved it, then publish it.
● Do you believe the decision behind this to be a good business decision? Why?
Four characteristics of strategic decisions:
1. Complexity: large number of aspects
2. Uncertainty: unknown number of alternatives/solutions
3. Rationality: reasons to reach a certain goal
4. Control: there should be a certain amount of control, intentionality
Strategic decisions = decisions committing substantial resources, setting precedents, and
creating waves of lesser decisions; as ill-structured, non-routine and complex; and as
substantial, unusual and all-pervading (Elbanna, 2006: 1)
Three perspectives on what qualifies as a strategic decision (Leiblein et al.: 2018)
I. Strategy as important decisions (reactions of other actors?)
3
, II. Strategy as critical tensions (tensions between colleagues, departments. Difficult to
measure the amount of interest)
III. Strategy as decision interdependence (important decision or critical tensions) along
three perspectives
Perspective 3 is better than 1 and 2.
Perspective III: Decision interdependence
- Inter-decisional (google glasses, dropped because they do not have the capacities to
make it a success, it involves many more decision makings)
- Inter-actor (replacing packages from the chinese format pallet to the european format
pallet)
- Inter-temporal (decisions have consequences for later in time. Example: as extraction
from the Groningen gas field for the future years in 3 weather scenarios)
Wrapping up the perspectives: It depends
Introduction of: Integrative framework of strategic decisions
Generic annual strategic planning cycle
Decision making go wrong → video’s
4
Lecture 1: Integrative framework SDM 3
Lecture 2: Environmental + Organizational Context 8
Lecture 3: Top Management + Decision Context 15
Lecture 4: Process (intro) & SDM Process (pt. 1) 20
Lecture 5: The SDM process (pt. 2) 26
Lecture 6: Outcomes 31
Lecture 7: Open Strategy 36
Lecture 8: Forms of participation in strategy (pt.1) 41
Lecture 9: Forms of participation in strategy 45
Lecture 10: Advanced Topic: Strategy Restoration 50
Lecture 11: History and Future in Strategy: Strategic Foresight 54
EXAM QUESTION = open question about the transition point between process and
outcome or context and process
1
,2
,Lecture 1: Integrative framework SDM
What are strategic decisions?
Uncertainty is one of the key aspects of strategic decision making
(Hickson et al., 1986: 37)
We make decisions all day:
● Some decisions need additional information
● We ask advice for some decisions
● Some decisions are made on the basis of pre-existing heuristics
● We try to narrow down the number of alternatives
● Organizations are also confronted with decision-situations
● The key challenge to any decision is the reduction of uncertainty
Example of strategic decision:
A publisher’s decision to publish 500 copies of Harry Potter
● Turned down by 22 other publishers
● The 2016 worth of the franchise is estimated at $25 billion!
● Why did Bloomsbury publish it (1996)?
Test with their own child, the child loved it, then publish it.
● Do you believe the decision behind this to be a good business decision? Why?
Four characteristics of strategic decisions:
1. Complexity: large number of aspects
2. Uncertainty: unknown number of alternatives/solutions
3. Rationality: reasons to reach a certain goal
4. Control: there should be a certain amount of control, intentionality
Strategic decisions = decisions committing substantial resources, setting precedents, and
creating waves of lesser decisions; as ill-structured, non-routine and complex; and as
substantial, unusual and all-pervading (Elbanna, 2006: 1)
Three perspectives on what qualifies as a strategic decision (Leiblein et al.: 2018)
I. Strategy as important decisions (reactions of other actors?)
3
, II. Strategy as critical tensions (tensions between colleagues, departments. Difficult to
measure the amount of interest)
III. Strategy as decision interdependence (important decision or critical tensions) along
three perspectives
Perspective 3 is better than 1 and 2.
Perspective III: Decision interdependence
- Inter-decisional (google glasses, dropped because they do not have the capacities to
make it a success, it involves many more decision makings)
- Inter-actor (replacing packages from the chinese format pallet to the european format
pallet)
- Inter-temporal (decisions have consequences for later in time. Example: as extraction
from the Groningen gas field for the future years in 3 weather scenarios)
Wrapping up the perspectives: It depends
Introduction of: Integrative framework of strategic decisions
Generic annual strategic planning cycle
Decision making go wrong → video’s
4
