Tilburg University
Strategic Decision-
Making
2020-2021
Grade: Unrouded grade for the exam and assignment should at least be 5.5
• Exam (60%) 8th of June 2021
o Open book, open questions, online (not proctored)
o 4 short form open questions
▪ Approximately 30 minutes each
▪ Two paragraphs, 250 words max
o 1 long form open question
▪ Approximately 60 minutes
▪ 1-2 pages, 500 words max
• Assignment (40%): 20th of May 2021. “Strategic Decisions in
Challenging Times”.
Attendance: Requirement for the lab sessions.
• LA1: Form teams for assignment + Assignment launch
• LA2: Assignment part 2 - Final steps
• LA3: Conflict management workshop
Literature: Compulsory literature can be found in lecture 0 of the Central
Lectures module
,Lecture 2: Integrative Framework: Environmental & Organizational
Context
Lecture 2, part 1: Organizational context
Fredrickson, J. W. 1986. The strategic decision process and organizational structure (Links to
an external site.). Academy of Management Review, 11(2): 280-297.
Today we’re going to look at the antecedents and it is important to know that these are external to
the decision making. When the decision is being made those antecedents are being a given. We’re
looking at the organizational characteristics:
1. Centralisation
2. Formalisation
3. Complexity
We will discuss how they relate to the formulation and implementation phase. And also how they
link back to the paper of Frederickson. He has written a classic paper about the influence of
organization structure and how this affects the SDM process. This consists of 6 SDM process
dimensions.
,Antecedent: Organizational characteristics.
There are three different dimensions of organizational structure:
1. Centralization: Is about decision-making and evaluation of activities and where that is
precisely concentrated within a company. When a company is highly centralized there is
usually one person or one department that makes the decisions. The person in charge is
therefore very influential because he makes all the decisions. An example of this would be
apple when Steve Jobs was still in charge.
2. Formalization: Formalisation is about rules and procedures within an organisation that tend
to prescribe behaviour. Rules are about what a person can or can not do and the benefits of
that are that this limits ambiguity because these roles are usually very specified in these
types of organisations. That leads to handbooks, rules of engagement of an organisation. This
provides clarity, but reduces autonomy of members (members’ discretion). You have to
match the level of formalization with the level professionalism of the organisation. So in
some organisations this works very well, but in organisations such as the university with
highly educated people this does not work very well (employees might prefer more
autonomy). An example of a very formal company would be Amazon because they focus
efficiency and getting products out on the most cost affective way. They have very clear
operatingsystems on how to do the work. They work extremely formalized and put it in
handbooks. You’ll note in general that older organisations are usually more formalized than
younger organisations, although there is some correlation in size.
3. Complexity: The idea here is that organizations are composed of many interrelated parts.
We can differentiate parts of the organization using many different sources. These sources of
complexity are:
, a. Vertical differentiation: Refer to the amount of levels an organization has. “How
many layers does the organization in the structure have?”.
b. Horizontal differentiation: Refers to the span of control. “How many units are at the
same level that are controlled by levels above them?”.
c. Spatial dispersion: Are activities of an organisation located in multiple locations or
are they concentrated at a single location?
The idea is that if complexity increased that it gets harder to send information (top-down but
also bottom-up). If you get more complexity it will be very difficult for top management to
fully control all activities and they will be sent more downstreet. So, organizations that are a
bit more complex tend to decentralize a bit more in general. Google and Microsoft are
examples of complex organizations, because there are so many parts doing so many
different things.
Having discussed these organizational characteristics (antecedents) we now know about the
organizational characteristics. So this is the antecedent that proceeds the process of actual decision
making. It’s good to keep this in mind when taking a look at the actual process characteristics.
Process characteristics
Fredrickson talks about six different process characteristics. The idea here is that the three structural
dimensions we just discussed influence the way in which these process characteristics are connected.
So for organizations that are highly centralized these processes work differently than for
organizations that are highly decentralized.
1. Process initiation: How and where is the process initiated? So, what makes organizations
get into the SDM process? Is that for example problem detection (when the decisionmaker
sees a problem then a process is started to fix that specific problem) or is it resolved
spontaneously?
2. Role of goals:
a. Individual vs organizational-level: Here we see for example that if an organization is
highly decentralized then the organizational goals are usually very much aligned with
the individual level goals, because the induvial tends to be the organization (for
example in very small businesses).
b. Remedial vs future-oriented: Remedial being that goals are fixed on the problem and
future-oriented are fixed on where they want to be on the future.
c. Precise vs general: Improving for society is very general for example.
3. Means/ends relationship: Whether the strategic decision making process is about the
means (how do we get where we want to be) or is it about how we get to the end and are
the means themselves replaceable?
Strategic Decision-
Making
2020-2021
Grade: Unrouded grade for the exam and assignment should at least be 5.5
• Exam (60%) 8th of June 2021
o Open book, open questions, online (not proctored)
o 4 short form open questions
▪ Approximately 30 minutes each
▪ Two paragraphs, 250 words max
o 1 long form open question
▪ Approximately 60 minutes
▪ 1-2 pages, 500 words max
• Assignment (40%): 20th of May 2021. “Strategic Decisions in
Challenging Times”.
Attendance: Requirement for the lab sessions.
• LA1: Form teams for assignment + Assignment launch
• LA2: Assignment part 2 - Final steps
• LA3: Conflict management workshop
Literature: Compulsory literature can be found in lecture 0 of the Central
Lectures module
,Lecture 2: Integrative Framework: Environmental & Organizational
Context
Lecture 2, part 1: Organizational context
Fredrickson, J. W. 1986. The strategic decision process and organizational structure (Links to
an external site.). Academy of Management Review, 11(2): 280-297.
Today we’re going to look at the antecedents and it is important to know that these are external to
the decision making. When the decision is being made those antecedents are being a given. We’re
looking at the organizational characteristics:
1. Centralisation
2. Formalisation
3. Complexity
We will discuss how they relate to the formulation and implementation phase. And also how they
link back to the paper of Frederickson. He has written a classic paper about the influence of
organization structure and how this affects the SDM process. This consists of 6 SDM process
dimensions.
,Antecedent: Organizational characteristics.
There are three different dimensions of organizational structure:
1. Centralization: Is about decision-making and evaluation of activities and where that is
precisely concentrated within a company. When a company is highly centralized there is
usually one person or one department that makes the decisions. The person in charge is
therefore very influential because he makes all the decisions. An example of this would be
apple when Steve Jobs was still in charge.
2. Formalization: Formalisation is about rules and procedures within an organisation that tend
to prescribe behaviour. Rules are about what a person can or can not do and the benefits of
that are that this limits ambiguity because these roles are usually very specified in these
types of organisations. That leads to handbooks, rules of engagement of an organisation. This
provides clarity, but reduces autonomy of members (members’ discretion). You have to
match the level of formalization with the level professionalism of the organisation. So in
some organisations this works very well, but in organisations such as the university with
highly educated people this does not work very well (employees might prefer more
autonomy). An example of a very formal company would be Amazon because they focus
efficiency and getting products out on the most cost affective way. They have very clear
operatingsystems on how to do the work. They work extremely formalized and put it in
handbooks. You’ll note in general that older organisations are usually more formalized than
younger organisations, although there is some correlation in size.
3. Complexity: The idea here is that organizations are composed of many interrelated parts.
We can differentiate parts of the organization using many different sources. These sources of
complexity are:
, a. Vertical differentiation: Refer to the amount of levels an organization has. “How
many layers does the organization in the structure have?”.
b. Horizontal differentiation: Refers to the span of control. “How many units are at the
same level that are controlled by levels above them?”.
c. Spatial dispersion: Are activities of an organisation located in multiple locations or
are they concentrated at a single location?
The idea is that if complexity increased that it gets harder to send information (top-down but
also bottom-up). If you get more complexity it will be very difficult for top management to
fully control all activities and they will be sent more downstreet. So, organizations that are a
bit more complex tend to decentralize a bit more in general. Google and Microsoft are
examples of complex organizations, because there are so many parts doing so many
different things.
Having discussed these organizational characteristics (antecedents) we now know about the
organizational characteristics. So this is the antecedent that proceeds the process of actual decision
making. It’s good to keep this in mind when taking a look at the actual process characteristics.
Process characteristics
Fredrickson talks about six different process characteristics. The idea here is that the three structural
dimensions we just discussed influence the way in which these process characteristics are connected.
So for organizations that are highly centralized these processes work differently than for
organizations that are highly decentralized.
1. Process initiation: How and where is the process initiated? So, what makes organizations
get into the SDM process? Is that for example problem detection (when the decisionmaker
sees a problem then a process is started to fix that specific problem) or is it resolved
spontaneously?
2. Role of goals:
a. Individual vs organizational-level: Here we see for example that if an organization is
highly decentralized then the organizational goals are usually very much aligned with
the individual level goals, because the induvial tends to be the organization (for
example in very small businesses).
b. Remedial vs future-oriented: Remedial being that goals are fixed on the problem and
future-oriented are fixed on where they want to be on the future.
c. Precise vs general: Improving for society is very general for example.
3. Means/ends relationship: Whether the strategic decision making process is about the
means (how do we get where we want to be) or is it about how we get to the end and are
the means themselves replaceable?
