nature of strategic decisions

Discuss The decision making process is extremely complex in case of the category II decision process. Operational decisions: Management Study Guide is a complete tutorial for management students, where students can learn the basics as well as advanced concepts related to management and its related subjects. There is a risk of incorrectly identifying the strategy level at which a problem exists. For this simple example, a change in marketing strategy could improve performance while other levels of strategy would remain unchanged. Their industrial welding equipment is regarded as the top quality product of its kind and the firm has consistently passed along cost savings to customers in the form of low prices. If U.S. auto firms were to rely on small cars instead of traditional American big cars as their primary sources of growth, far-reaching changes in their functional strategy sets were also necessary. Of course, if the problem existed within the firm’s corporate-or business-level strategy, for example, changing functional-level strategy would not correct it. They certainly would affect fewer people than modifications at the corporate or business levels. The Nature of Strategic Decisions. Factor # 5. We are a ISO 9001:2015 Certified Education Provider. One might say that a “good” business-level strategy would have been poorly implemented by part of its functional strategy set. It may be the case that only a small part of, say, marketing strategy would have to be changed to correct a problem. Strategic decisions are taken in Accordance with organizational mission and vision. Despite the unique and complex nature of category II decision process in nevertheless generic. Strategic decisions exercise great influence on the functioning and direction of the organization and have long-term implications. Many colleges and universities offer similar programs, with traditional facilities and are significantly different only in terms of the geographical areas within which they operate. In effect, then, such a change would constitute an acceptance of corporate- and business-level strategy, and also of the firm’s functional strategy set. Sometimes, the strategist must make decisions in time frames set by other. Operational decisions are not frequently taken. Marketing strategy would be all that was rejected. The nature of Strategic Management is dissimilar form other facets of management as it demands awareness to the “big picture” and a rational assessment of the future options. These are taken in accordance with strategic and administrative decision. However, by then they were all in the red, and the doomsayers were having a heyday. (b) The nature of this decision is lessclear. These decisions may be concerned with possessing new resources, organizing others or reallocating others. The purpose of this article is to put a focus on strategic decision-making – specifically how strategic decisions are made in real corporate life. In fact, this move would most likely aggravate the situation. Strategic decisions deal with the range of organizational activities. Your email address will not be published. Strategic Decisions - Definition and Characteristics. Although the process of creating strategy is often discussed as if it were an unconstrained design process, keep in mind that while strategists evaluate strategy, the firm is operating. During the 1970s and early 1980s, these companies finally began to respond to their business strategy problems with business strategy changes–major philosophical alterations in the nature of their businesses. Strategic Decision-Making “Rational decision - making is an impossible ideal in strategy formulation and implementation due to incomplete information and organisational politics.” Strategy is formulated and implemented by organisations as a means of gaining competitive advantage and achieving organisational success. It's probably a business-level decision that would be delegatedto the management team of the new subsidiary. With overseas competitors exporting fuel-efficient automobiles to the United States, and with widely acknowledged shrinkage’s of fossil fuel supplies, they still stubbornly tried to retain their old business and corporate strategies, well into the 1970s, by changing market strategy only. New growth rates, profit targets, market-share goals, and the like, along with related broad action plans that centered around contraction in many forms, were implemented along with new functional strategy. It offers a strategic direction endorsed by the team and stakeholders, a clear business … These decisions are taken at the middle level of management. These are in welfare of employees working in an organization. This site uses Akismet to reduce spam. Differenciation of strategy from policies and tactics, Resource Based View (RBV) of Competitive Advantage, Prescriptive and Descriptive Schools of Strategy - Similarities and Differences, Role of Environmental Analysis in Strategy Formulation, Strategic Planning Process - Five Stages of Strategic Planning Process, Strategy Evaluation allows an Organization to take a Proactive Stance towards Shaping its own Future, Business Level Strategy vs Corporate Level Strategy. © Management Study Guide Strategic decisions are different from administrative and operational decisions. A tendency exists in business to change functional-level strategies or organizational structure in a attempt to remedy any problem. Your email address will not be published. The purpose of strategic management is to use and create new and different opportunities for future. Strategic decisions are complex in nature. 1. Following this set of ideas, then, strategic decisions are those which involve “clear and favorable differentiation from competitors,” so that one’s competitive advantage is tangible, measurable, and preservable.