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College aantekeningen Strategic decision making (441058-B-6)
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Complete summary of the lectures from strategic decision making
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HC Strategic decision making, Emma Hamm 2078889HC Strategic decision making
Lecture 1 - Introduction 1
Lecture 2 - Environmental + organizational context 7
Lecture 3 - Integrative Framework: Decision-Specific Context + Top Management Context 15
Lecture 4 - Integrative Framework: Decision context + Strategic Decision Making Process 23
Lecture 5 - the SDM process (pt. 2) 31
Lecture 6 - Outcomes 38
Lecture 7 - Open strategy 44
Lecture 8 - Forms of participation in strategy (pt.1) 52
Lecture 9 - Forms of participation in strategy (pt.2) 58
Lecture 10 - advanced topic: strategy restoration 65
Lecture 11 - History and Future in Strategy: Strategic Foresight 70
Lecture 12 - wrap up 77
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, HC Strategic decision making, Emma Hamm 2078889
Lecture 1 - Introduction
MODULE 0: GENERAL BACKGROUND IN STRATEGIC MANAGEMENT (see canvas page)
1. basic strategy terminology
a. What is strategy?, b. What is strategic management?,
c. What are the generic strategies?, d. What is competitive advantage?
2. Essential models & theories in strategy
a. Porter’s Five Forces Model, b. Environment analysis (PEST, PESTEL, DESTEP),
c. SWOT analysis, d. Relevant organization theories
WHAT ARE STRATEGIC DECISIONS?x
Not only about taking the decision, also the EXECUTION
Key issue; you can’t deal / know everything. You don’t know how successful it will be.
But, Uncertainty is normal
Input - bv sunflower oil. Very scarce! War, find different supply root/different ingredient
Boundaries decisions - about in which market/sector am I acting?
DECISIONS
We make decisions all day:
● Some need additional information
● We ask advice for some decisions
● Some are made on the basis of pre-existing heuristics
(help us make fair decisions, but also sometimes makes us blind!)
● We try to narrow down the number of alternatives
(limits, resource constraints → selection)
● Organizations are also confronted with decision-situations
● The key challenge to any decision is the reduction of uncertainty
FUNDAMENTAL CHARACTERISTICS OF STRATEGIC DECISIONS
1. Complexity: large number of aspects you can/should involve when making decisions
2. Uncertainty : unknown number of alternatives/solutions
3. Rationality: try to reach a goal. You take decision to achieve the goal
4. Control: intentionality. If you cannot control what is happening, managers are often not
keen on doing it
STRATEGIC DECISIONS
Strategic decision: 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 <alles doordringend>
Big decisions set up a set of smaller decisions.
* Unusual in the sent that they are not taken on a day to day basis
* Substantial: something big relies on them
Three perspectives
1. Strategy as important decisions
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, HC Strategic decision making, Emma Hamm 2078889
2. Strategy as critical tensions (what are the interests that play in the organization?)
Once you make a decision; resources are layed down for a specific purpose, and cannot be used
anymore for something else.
How interests play out, how do you prioritize which interests are strong/relevant?
3. Strategy as decision interdependence along three dimensions
3>1 3>2 1 equally bad as 2, or worse?
→ PERSPECTIVE 3: DECISION INTERDEPENDENCE
● Inter-decisional: Decision relations to other decisions, bv committing resources to other things
(bv google glasses stopt te project, other goals)
● Inter-actor: whatever company decides, take into account what other companies do and how
they react to their decision (bv MOL Logistics working together with chinese company)
● Inter-temporal: decisions taken at one point of time have consequences for other decisions and
people (bv Gas problem in Groningen)
WRAPPING UP THE PERSPECTIVES: IT DEPENDS
Thinking helps us if we use all 3 perspectives.
INTRODUCTION OF INTEGRATIVE FRAMEWORK OF STRATEGIC DECISIONS
GENERIC ANNUAL STRATEGIC PLANNING CYCLE
Decisions are made throughout the cycle.
Key problem in decision making: you need to start doing things, not only deciding
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, HC Strategic decision making, Emma Hamm 2078889
A lot of organizations are not making the right decisions
→ video; invention of the mouse, internet
But never took the time to make those inventions into products! Other people took the idea and created it.
The money just walked out
The company has the knowledge and possibilities in stock, but if you don’t act upon it, other companies
will do it!
THE INTEGRATIVE FRAMEWORK FOR ANALYZING SDs (SIMPLIFIED VERSION)
‘INPUT → THROUGHPUT → OUTPUT’ LOGIC ALL THE TIME
SDM - Open up black box; what happens in the middle part?
DEFINITION OF STRATEGIC DECISION MAKING PROCESS
the process by which a strategic decision is made and implemented and the factors which affect it,
i.e. the process that leads to the choice of goals and means and the way in which means are effectively
deployed
>> about thinking and doing
KEY ASSUMPTIONS OF SDM
Rational approach of decision making: the more rational we are, the better we can take decisions (the
better the performance)
But… rationality is not the only predictor. If we spend time on other aspects, we may not capture the
problem we decide up on fully
Departure point of SDM thinking, research & theorizing:
So, why spend more time and resources on these decisions and processes?
Reasons for this lie in a myriad of factors, amongst which analytical
and organizational complexity. To deal with this:
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