Strategic decision-making processes: the role of management and context

TLDR

The study examines how strategic decision‑making processes relate to management and contextual factors. The authors analyze strategic decisions by mapping their decision‑making processes onto seven dimensions—comprehensiveness, financial reporting, rule formalization, hierarchical decentralization, lateral communication, politicization, and problem‑solving dissension—and relate these dimensions to decision‑specific traits, top‑management features, and contextual factors. Results show that strategic decision processes are shaped by multiple factors, with decision‑specific characteristics exerting the strongest influence, thereby highlighting the primacy of decision context over management or environmental factors. © 1998 John Wiley & Sons, Ltd.

Abstract

This paper investigates the relationship between the process of strategic decision-making and management and contextual factors. First, drawing on a sample of strategic decisions, it analyzes the process through which they are taken, into seven dimensions: comprehensiveness/rationality, financial reporting, rule formalization, hierarchical decentralization, lateral communication, politicization, problem-solving dissension. Second, these process dimensions are related to (1) decision-specific characteristics, both perceived characteristics and objective typologies of strategic decisions, (2) top management characteristics, and (3) contextual factors referring to external corporate environment and internal firm characteristics. Overall, the results support the view that strategic decision processes are shaped by a multiplicity of factors, in all these categories. But the most striking finding is that decision-specific characteristics appear to have the most important influence on the strategic decision-making process, as decisions with different decision-specific characteristics are handled through different processes. The evident dominance of decision-specific characteristics over management and contextual factors enriches the traditional ‘external control’ vs. ‘strategic choice’ debate in the area of strategic management. An interpretation of results is attempted and policy implications are derived. © 1998 John Wiley & Sons, Ltd.