Strategic Decision Making

Strategic decision Making is the process of selecting a course of action from many alternatives.
steps in strategic decision making looks some what like us:-

1. Objectives to be achieved are determined.
2. Alternative ways of achieving these objectives are identified.
3. Each alternative is evaluated.
4. The best alternative is chosen

The Entrepreneur /honor or Top management always have to chose the vision. There  may be alternative visions of a company from which one best vision is chosen.

At second step a company has to chose its mission. To chose a mission means a company has to decide about what product it has to offer?.......................  A company may have ability to produce different products

whom to serve...........................................  A company have to decide the customer group 

which technology to use?... To chose from  different technologies of production and distribution of the product 

 Similarly when an organisation has to chose its objectives. Top  managers identify objectives, alternative ways , evaluate the feasibility to achieve the objectives.

Characteristics of Strategic Decisions:-

Popularized by Mintzberg et al. (1976), strategic decisions are seen as large, expensive, and precedent setting producing ambiguity about how to find a solution and uncertainty in the solution’s outcomes. Once implemented, a strategic decision stipulates premises that guide operational decisions that follow. A strategic decision is often difficult to reverse once human and financial resources have been committed to their cause. Furthermore,

strategic decisions have the following characteristics:

◆ They are elusive problems that are difficult to define precisely.

◆ They require an understanding of the problem to find a viable solution.

◆ They rarely have one best solution, but often a series of possible solutions.

◆ Questions about trade-offs and priorities appear in the solutions.

◆ Solution benefits are difficult to assess as to their effectiveness, in part because

they lack a clear final end point against which effectiveness can be judged.

◆ Other problems in the organization are connected to solutions for a focal

problem.

◆ High levels of ambiguity and uncertainty are associated with solutions.

◆ Realizing hoped for benefits has considerable risk.

◆ Strategic decisions have competing interests that prompt key players to use

political pressure to ensure that a choice aligns with their preferences.

A simple model of strategic decision making can be illustrated as following-