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Strategic decision making and its importance in the corporate world

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  1. Introduction.
  2. Strategy according to Michael Porter.
  3. Levels of strategy in an organization.
  4. Corporate level strategies.
  5. Business level strategies.
  6. Operational strategies.
  7. Strategic management.
  8. Strategic position.
  9. Strategic implementation.
  10. Strategic evaluation and control.
  11. Strategic decision making.
  12. Conclusion.
  13. References.

According to Prasad (2001) every organization is involved in a complicated pattern of decisions from board of directors to specific decisions about the day to day processes. Some of these decisions have a long- term effect while others have only short- term effect. The emphasis of making these decisions have led to development of a new field corporate strategy.

Today every organization in any market sector wants to surpass its competitors and improve their market performance and market share and thus gain a competitive advantage against their competitors. Thus to gain competitive advantage an organization need to rethink about some of important factors like prices, product range, manufacturing quality, service levels etc. To achieve its objectives it needs to develop strategy options and then choose the most relevant option amongst them. According to Johnson and Scholes (1999) corporate strategy can be described as the identification of the purpose of the organization and the plans and actions it undertakes to achieve them. It is a link between organizations internal resources and its external relationship with its customers, suppliers, and competitors.

[...] In the case of Larsen and Turbo the company has been involving its lower and middle level management in making business strategic decisions as it feels only through decentralized decision making such a diversified company can be managed. The researcher concludes that although the CEO and Top Management makes the strategic business decision regarding the company but due to globalization and changing phase of the companies they should welcome suggestions and ideas from the lower level management. They should also involve them in making business level strategic decision which involves choosing strategies like Cost leadership, Differentiation, Niche strategies and also in formulating operational level strategies. [...]

[...] (Kazmi, 2002) Strategic decision making: Organizations are goal oriented and any organizational process, including decision making should also be goal directed to meet the organizational objectives. ?Strategic decision is a major choice of actions concerning allocation of resources and contribution to the achievement of organizational objectives?. (Prasad pg.31). Strategic decisions are the choices that determine the direction and success of an organization. According to him although strategic decision makers are senior managers, entrepreneurs and leaders, increasingly those lower down the management structure are also being empowered with the responsibility for making strategic decisions. [...]

[...] Strategic Management: Wheelen and David (2002) in their book Concepts in strategic management and business policy have defined strategic management as art and science of formulating, implementing and evaluating cross functional decisions that enable an organization to achieve its objectives.? Strategic management is considered as either decision making and planning, or a set of activities related to the formulation and implementation of strategies to achieve organizational objectives. In other words strategic management means a process which includes strategic planning and its implementation so that the organization is able to achieve its aims and objectives. [...]

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