Assignment of Strategic Management (2).docx

7/24/2019 Assignment of Strategic Management (2).docx

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Assignment of Strategic Management

Submitted to:

Mam. Farah Naz Naqvi

Submitted by:

Amina Aslam

(M1M!A"#$

Article:


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Strategic %ecision Ma&ing

'ritten !y:

isenhardt )atleen M. * +barac&i, Mar& -.

1: /0' F A2034

Abstract:

The article reviews the strategic decision making (SDM) literature by focusing on the dominant

paradigms:

Rationality and bounded rationality

olitics and power

!arbage can

They review the theory and key empirical support" and identify emerging debates within each

paradigm# $inally they propose a research agenda that emphasi%es a more realistic view ofstrategic decision making#

'hat 0s Strategic %ecision5

Strategic Decision is one which is &important' in terms of the (Mint%berg" Raisinghani and

Theoret" *+: ,-+):

./ctions taken

.Resources committed" or

.recedents set

0nfre1uent decisions made by the top leaders of an organi%ation that critically affect its health

and survival#

ationality and !ounded ationality (!r$:

ational action also called Syno6tic or 3om6rehensive Model of %ecision

According to this 6aradigm,

# /ctors enter decision situations with known ob2ectives

,# These ob2ectives determines the value of the possible conse1uences of the action


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3# /ctors gather appropriate information and develop a set of alternative actions

-# Select the optimal alternative#

3ognitive limitations:

Different researchers put different cognitive limitations# Some of these are"

4yert and March" +3: said that" Theory and case studies demonstrated" !oals can beinconsistent across people and time and the search behavior of people is often local# Standard

operating procedures guide much of organi%ational behavior#

4arter" *"

in a review of si5 top6level planning decisions" found , types of search process

.ersonnel6induced: strong e5ecutives with definite ob2ectives in mind

.7pportunity6induced: search occurs when une5pected opportunities arise#

/llison in *said that"

8ow standard operating procedures applies to strategic decision in!overnment9 /ctions arising from an organi%ation yesterday best predict the actions today it

means people learn from past e5perience of organi%ation for future success#

/nderson in 3 said that"

!oals and alternatives by ob2ection model (at ;5ecutive

4ommittee): 4onsider simultaneously few alternatives courses of action" then participants raise

ob2ections to a current alternative (discovery of goals and choices trough social process)#

An alternative vie7:

/uthors donegislative process (?@As): Decision makers have different goals" they come together through

coalitions and the most powerful triumph#

'hat is 6olitics5

/uthors refer by politics" &those observable" but often covert" actions by which people enhancetheir power to influence a decision#


Traditional view is that politics are &fluid' and is essential to organi%ations for creating effective

change and adaptation#

/ contradictory view is emerging:


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olitics are trigged by power imbalances

$rustrated e5ecutives turn to politics in autocratic situations#

olitics are static" as decision makers rely on the same allies and the same politics time

after time#

olitics is ineffective# Many people dislike it#

/uthors conclude that politics create animosity" wastes times" disrupts information

channels and leads to poor performance#

9arbage 3an (9c$:

The !4 model describes decision making in highly ambiguous settings (organi%ed anarchies)#

9! model streams:

Decisions depends strongly on timing and luck

Decisions are fu%%y and are not the result of analysis

0ndividuals are not sure about what they want and change their mind often


/lthough problematic preferences have empirical support" there are common themes

throughout the choice process

articipation is not always so random" but rather is a conse1uence of institutional roles"

politics and the phase of the decision process# That is participation is somewhat

predictable#

/lso" according to Mag2uka () the !4 model is supported at the individual level" but

overall patterns of participation were clearly predictable from psychological and

demographic variables# The patterns are purposive" rational and predictable Streams of problems" people" choice opportunities and solutions are linked by the issue at

hand# They are not independent

93 model is more robust as time frames become longer, deadlines are removed, and

institutional forces are diminished

Ne7 esearch Agenda:

Most scholars believe that people are boundedly rational" that decision making is essentiallypolitical" and that chance matters#

Bew agenda seek that empirical findings could transcend traditional perspectives to new" morerealistic views# $uture research areas:

4ognition

Bormative implications

4onflict

1. 3ognition !4 model ignores the cognitive capability of decision makers


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/t the other e5treme political model assumes that people are cognitive superheroes

=oth models are unrealistic# /uthors propose to achieve a more realistic view of cognitionstudying heuristics of strategic choice# Chich" how" why and when they are most appropriate

#. Normative im6lications:

0t is re1uired to do more normative studies:

To find how effective strategic decision making vary with the si%e of the firm" degree of

government regulation" pace of technical change" different cultures

0n profit6seeking firms

To e5amine decision outcomes at different levels of organi%ations

. 3onflict :

To improve realism of conflict" e5plore:

=enefits s# 4osts To answer 1uestions like: Some sources of conflict are more beneficial than others9 0s

there an optimal level of conflict9 8ow relates to emotion (anger" frustration" animosity)

and decision speed9

0ncorporate new approaches like resolving conflict trough cooperative decisions" building

trust" maintaining e1uity and evoking humor#

3riticism on article:

This article on strategic decision making is a Defined posture" there is use of tables" specifyingauthor(s)" method" sample" description and conclusion" !ood structure: =y model and then by

dates" Summary on every model and final conclusion" Refers to author

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