Business free essays: Factors influencing Strategic Decision Making
Factors influencing Strategic Decision Making
Decision-making is one of the vital activities of managers that have a profound impact on strategic outcomes in organizations. The factors influencing decision-making by managers can be grouped into four main categories. The first category encompasses management team characteristics, such as executive experience, affective conflict, cognitive conflict, need for achievement and consensus (Nooraie, 2012). The second category encompasses the internal organizational factors that managers give consideration to when making decisions, such as management structure, power distribution strategy, organizational size and past strategies (Nooraie, 2012).
The third category encompasses factors emanating from the external environment that have an influence on organizational performance and the practices and activities carried out by organizational stakeholders. The environmental factors that have an influence on the decisions made by managers include environmental stability, heterogeneity, dynamism, velocity and hostility and threats and opportunities (Nooraie, 2012). The last category consists of decision-specific characteristics such as decision- familiarity, magnitude of impact of a decision, risks associated with a decision, decision complexity and decision types (Nooraie, 2012).
The different factors influencing decision-making processes have a significant impact on the strategic decision outcomes. For instance, the presence of consensus among managers when making a decision implies that they arrive at a unanimous decision (Palmer, 2015). The quality of strategic outcomes of a decision-making process has a direct relationship with the executive experience. In order to make quality decisions, managers have to give consideration to organizational size, structure and strategies. In the same vein, managers need to consider environmental and decision-specific factors in order to arrive at quality decision outcomes (Palmer, 2015). Failure to give consideration to one or more of the categories of influencing factors increases chances of making ineffective decisions.
Nooraie, M. (2012). Factors Influencing Strategic Decision-Making Processes. International
Journal of Academic Research in Business and Social Sciences, 2(7), 405-429.
Palmer, D. E. (2015). Handbook of Research on Business Ethics and Corporate
Responsibilities. New York, NY: IGI Global.
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