ADVANCE DISCUSSION IN

STRATEGIC DECISION MAKING

5 Ps of strategic decisions

1.Plans -the decision is an intended course of action carried out in advance with a clear purpose

2.Ploys- set of actions designed to outwit the competition, which may not be the ‘obvious’ content of the decision

3.Pattern -decisions taken over time form a pattern. It is this pattern of resulting (emergent) behaviour that we call the strategy of the firm.

4.Position- a match between the organization and its environment.

5.Perspective- How strategists percieve their environment and themselves

For example – • strategic perspective of Nokia is one of continuous and

sometimes radical change (Nokia began as a paper and pulp company)

• Hewlett-Packard favours an engineering excellence perspective

• Nokia started by making paper – the original communications technology

• The history of Nokia goes back to 1865. That was when Fredrik Idestam built a wood pulp mill on the banks of the Tammerkoski rapids, in southern Finland. A few years later, he built a second mill by the Nokianvirta river – the place that gave Nokia its name.

• Idestam named his company Nokia Ab in 1871• Nokia Ab added electricity generation to its business

activities in 1902

Different type of strategic Decision makers

• Rational Decision makers• Behavioral decision makers• Adaptive decision makers use frugal

heuristics that best suits the demand and information structure of environment. This is ecological rationality

• Politically aware decision makers- influence of multiple contending stakeholders and coliations

• Natural decision makers- use of laboratory methods to understand and context and issue

• Intuitive decision makers

Context of decision making

• Boom and bust behavior

Boom – firms expand their capacities

Bust – limited operations• Information overload situation – decision

depends on ability to interpret and interpretation

• Decision making with unreliable data-

Seek more data, use ideology.• Hazardous situations- analysing small

failures, mobilizing support, using local expertise to mitigate risk

POLITICS IN STRATEGIC DECISION MAKING

What is politics?• occurrence of certain forms of behaviour( conflict

on scarce resources) associated with the use of power or influence,

• consciously self-serving behaviours against others in the organization.

Organizations Are Political Arena

Sharing Of Scarce Resources/positions/privileges.

1.Between Individuals

2.Organizational units - SBUs, Departments, Business zones

3. External Parties- government agencies, unions, and customers

• Strategic Decisions change the

Structure- distribution of authority

Process- Technology, rules and policies

Culture

So politics is inevitable .

Political activities in phases of Strategic Decision Making

Phases of S.D.M Focus of political action

Examples of political activity

1. Identification of strategic issues

Control of: issues to be discussed ,Cause and effect relationships to be discussed

Control agenda.Interpretation of past events

2Narrowing the alternative strategies for serious consideration

Control of alternatives Mobilization: Coalition formationResource commitment for information search

3.Examining and choosing the strategy

Control of choice Selective advocacy of criteria, search and representation of information to justify choice

Phases of S.D.M Focus of political action

Examples of political activity

4.Initiating the implementation of strategy

Interaction between winners and losers

winners attempt to betray losersLosers attempt to thwart decisions and trigger fresh strategic issues.

5.Designing procedures for the evaluation of results

Representing oneself as successful

Selective advocacy of criteria