STRATEGIC DECISIONS MADE BY TOP EXECUTIVES AND MIDDLE MANAGERS WITH DATA AND PROCESS DOMINANT STYLES

The influence of a manager's decision style in strategic decision-making is explored using simulations. The Jungian style classification is extended to identify ‘data and process dominant’ styles of decision-making. Managers with process dominant styles can use several types of data and managers with data dominant styles can apply various modes of data processing. Both the expanded and the traditional definitions of style are used as factors to explain how 79 top executives and 89 middle managers rated project simulations. Decision style is found to be a key factor in explaining the likelihood of taking strategic action and the risk seen in this action. Decisions made by top executives are more style dependent than those of middle managers. The extended definition of style reveals more about the preferences of top executives than traditional style categories.     

IN SEARCH OF EXCELLENT MANAGEMENT

Despite important advances in recent years, no agreement exists concerning what constitutes management excellence. Specific knowledge of how managerial behaviour is perceived and evaluated by others will help to resolve unsettled questions about what is meant by management excellence and improve the actual decisions of managers. This article examines the determinants of managerial excellence as perceived by corporate CEOs, directors, and financial analysts in Fortune magazine's annual survey of the best-managed American firms in 33 industries. While the firms perceived to be best managed are more profitable and less risky, and grow faster and reward their stockholders more than less well-managed firms, these variables explain only about 30 per cent of the variance in management ratings. the firms perceived to be best managed have more involvement in international markets and research and development, while large firm size and firm diversification reflect negatively upon perceived managerial quality. the relative inability of conventional financial measures of firm performance to explain perceptions of managerial excellence underlines the complex nature both of these perceptions and strategic behaviour. the results support Varadarajan and Ramanujam's conclusion that excellent management depends upon a diverse set of competencies and values, as well as Chakravarthy's contention that the most important characteristic of firm performance is management's ability to transform the firm and adapt to a rapidly changing environment. By contrast, little support is found for the maximization of stockholder wealth criterion of Rappaport.     

LINKING COGNITIVE, ORGANIZATIONAL AND POLITICAL FACTORS IN EXPLAINING STRATEGIC CHANGE

Much recent research on strategic decision-making and strategic change from many different perspectives challenges the view that decision outcomes are the product of rational choice. Allison's (1971) classification scheme is used to categorize recent strategic decision research within three different perspectives. Discussions of research on cognitive, organizational and political perspectives are followed by an integrative discussion showing how these three perspectives can be combined to deal with the full complexity of strategic decisions and the strategic change process.     

Propensity for participative decision making in Latin America: Mexico and Peru

Increased subordinate participation in management decisions has been a recognized trend in developed Western organizations in recent decades. This study examines a manager's propensity for engaging in participative decision making (PPDM)in two emerging Latin American nations, Mexico and Peru. Although these two nations possess some degree of cultural similarity, two key differences were identified. First, Mexican managers who believed that PDM reduces a manager's power base were also likely than others to see a positive link between PDM and organizational effectiveness. In contrast, Peruvian managers who believed that PDM reduces a manager's power base were less likely than others to see a positive link between PDM and organizational effectiveness. Second, Mexican managers operating in participative organizational cultures were less committed than other managers to participation as a management philosophy and to their organizations. In contrast, Peruvian managers operating in participative organizational cultures were more committed than other managers to participation and to their organizations. Conclusions and directions for future research are also presented.     

ENVIRONMENT, ORGANIZATION AND EFFECTIVENESS: A BIOGRAPHICAL APPROACH[1]

Answers to the question of what makes an organization effective have proved elusive despite more than 20 years of intensive theorizing and research. Yet the search for answers, which gained momentum with Lawrence and Lorsch's (1969) Organization and Environment, clearly has had salutary effects on students of organizations and their work. This paper offers an approach to analysing organizations explicitly based on two of those benefits. The first is the shift toward a more dynamic orientation for explaining organizational configurations and outcomes. The second is the identification of strategic decisionmaking as the key link between organizational environment, structures, and effectiveness. By merging these two, we construct a biographical approach to the study of organizations. This approach sees organizations as evolving through time in response to, or in anticipation of, both external and internal forces. We view effectiveness as the outcome of a variety of decisions taken by one or more groups of organizational actors - elites or coalitions - in the context of bounded rationalities and environmental and structural constraints. So decision processes underpin observed configurations of environmental and structural features and link these configurations to effectiveness. An organization's biography - the pattern of its evolution - can be conceptualized as a succession of decisions and their consequences, with some decisions having a major long-term influence on the direction taken by the organization and its effectiveness, while others have but an incremental influence. This article is an initial effort to make concrete our ideas. The opening section discusses organizational decision-making and organizational effectiveness. This is the core of our approach: a basis for categorizing organizational decisions and in particular for singling out those which can be regarded as strategic. It is our contention that significant decisions vary across organizations and that it will embrace rather than ignore history and context. And ultimately, it will enhance our understanding of organizational effectiveness.     

Using theory on authentic leadership to build a strong human resource management system

Prior work has questioned whether human resource management (HRM) lives up to the organizational benefits it espouses. The intentions underlying human resource (HR) practices often differ from how they are implemented by line managers or how they are ultimately perceived by followers, thus undermining the strength of the HR system in influencing organizational outcomes and with them the overall reputation of HRM. We argue that line managers, specifically those who display authentic leadership behaviors, can strengthen an HR system (i.e., aligning intended, actual, and perceived HR policies and practices) by implementing HR practices in a way that they are perceived as distinct, consistent, and reflecting consensus. Authentic leadership theory departs from more traditional, top-down fit perspectives in strategic HRM to consider the dynamic way in which individuals within an organizational context co-create felt and perceived authenticity in interaction with others. In other words, by providing a more dynamic approach to creating alignment in HRM, authentic leadership helps HRM attain more authenticity and credibility in the organization.     

Rational Irrationality and Group Size: The Effect of Biased Beliefs on Individual Contributions Towards Collective Goods

The price of irrationality or belief manipulation varies as we move from small to large group settings. Individual members of large groups can more cheaply bias downwards their beliefs as to the immorality of their free‐riding thereby circumventing internal moral constraints. The relative anonymity inherent to large number settings moreover reduces social pressures against free‐riding stemming from some common ethical or moral norms. Both selfish individuals facing an internal moral constraint to behave altruistically and those with altruistic preferences have an incentive to bias upward their belief of the decisiveness of their contribution in large number settings. In addition, the impact of symmetry and the illusion of control can introduce biases regarding the expected reactions of others to one's own decisions. The loosening of moral constraints will tend to increase free‐rider behavior while biased beliefs about the decisiveness of one's contribution or the reaction of others to one's actions will tend to decrease such behavior.     

AN EXAMINATION OF THE INFLUENCE OF MIDDLE-LEVEL MANAGERS IN FORMULATING AND IMPLEMENTING STRATEGIC DECISIONS

The upward influence of middle-level managers (MLMs) on strategic planning and decision-making is examined. It was found that: (1) upward influence activity was more prevalent in low risk/return types of strategic decisions than in high risk/return decisions; (2) upward influence activity was more prevalent during the implementation of strategic decisions than during the formulation of such decisions; (3) managers most often used rational arguments in their influence attempts; (4) managers were more likely to be successful than unsuccessful in influencing their superiors in strategic decisions; (5) managers most often attributed their success in influencing their superiors to internal causes and their failures to external causes; (6) managers from private sector organizations exerted influence in both high risk and low risk strategic decisions more frequently than did managers from public sector organizations; and (7) the number of years working with the superior was the best predictor of successful interactions and of risky decisions. Some insight into the development of widespread strategic thinking in an organization is provided.     

A chameleon function? HRM in the ‘90s

This article examines the changing role of the HR function in large corporations in the 1990s. It draws on data collected from a multi-sector case study research project – the Leading Edge Forum Consortium. Activities are analysed along three dimensions: access to strategic decision making, shift of responsibilities to the line, and the function's perceived contribution to business performance. It concludes that devolution to the line remains problematic, and that access to strategic decision making is still contingent on the personal influencing skills of senior HR managers or directors. Nevertheless the recognition of the strategic importance of HRM as a contributor to business performance has risen.     

Perceptions of the value of the HR function

This article explores the added value of the HR function as it is perceived by three groups of managers: top managers, HR managers and line managers. Despite the fact that literature about strategic HRM focuses almost exclusively on the value of the HR function as a strategic partner, it was assumed that its perceived value for the business would not be restricted to the area of strategy formulation and implementation. Several 'result domains' can be distinguished in which the HR function can deliver value to the business. Based on our review of the literature, the degree of strategic involvement of the function was used as a second perspective to investigate its perceived added value. To examine our propositions, a qualitative study was carried out in which 97 HR managers, 38 top managers and 178 line managers participated. The results confirm our thesis that the perceived value of the HR function contains more than just the fulfilment of its role as a strategic partner. Based on our results, an integrated model for the perceived value of the function has been developed.     

A COMPARATIVE ANALYSIS OF STRATEGIC DECISIONS

This study examines the process of upward influence in a variety of strategic decisions. The study provides a list of categories and supporting data for the agents, methods, perceived outcomes, and perceived causes of success and failure of upward influence interactions that impact upon the strategic decision-making process in organizations. The results suggest that: (a) middle-level managers (MLMs) deal directly with their superiors and use rational or persuasive arguments in their upward influence interactions in strategic decisions; (2) MLMs are very successful in their influence interactions and attribute their successes to internal causes; (3) MLMs and their superiors view the influence episode similarly; and (4) upward influence activity in strategic decisions is quite similar to upward influence activity in non-strategic decisions. The study also examines individual and organizational factors that are associated with success and failure in influence activity in strategic decision-making.     

THE EFFECTS OF INFORMATION TECHNOLOGY ON STRATEGIC DECISION MAKING

Information technology (IT) may be defined as computer-based technology for the storage, accessing, processing and communication of information. Many writers have suggested that the use of IT should improve strategic decisions and have developed a number of propositions about the effects of IT on strategic decision making. However, no study has yet addressed the specific effects of IT on major phases of this process. Using Mintzberg, Raisinghani and Theoret's (1976, ‘The structure of unstructured decision processes’, Administrative Science Quarterly, 21, 2, 246–75) strategic decision-making model, this study assessed the effects of IT on the major phases of the process through an intensive examination of eight decisions in four companies. the results of the study provide new information on the specific ways IT improves decision-making efficiency and effectiveness at each stage of the strategic decision process.     

A framework for strategic decision making and performance among Chinese managers

This study develops an integrative model that explains the relationship between Chinese culture, managers' strategic decision making (SDM) processes, and organizational performance. For the study 1200 participants were randomly selected from a business club's company register, resulting in 204 valid respondents. The results highlighted two significant SDM paths used by managers: (1) the cognitive-speed path, which suggested that Overseas Chinese managers (the Chinese who live outside of Mainland China) focus on the big picture, draw analogies from past experiences, and use extensive networks to reduce the duration of the decision process; and (2) the social-political path which shows that Overseas Chinese managers focus on collective interests, strive to maintain harmony, and to save face while using a collaborative style to handle conflict; this approach reduces dysfunctional political behavior, while reinforcing the decision team's focus on common goals. From these results we concluded that a speedier decision making process (based on intuition, experience, and networks) accompanied by the appropriate use of political behavior (that created harmony, through a hierarchical structure, during conflict management) in the Overseas Chinese managers' strategic decision making process could positively influence organizational performance.     

Is Ulrich's model useful in understanding HR practitioners' roles in non-western developing countries? An exploratory investigation across private and public sector organizations in the Sultanate Kingdom of Oman

This study set out to explore whether Ulrich's model is useful in understanding HR roles in non-western developing countries such as Oman. The study surveyed a random sample of 780 HR practitioners, line managers and employees from public and private sector organizations. In addition 12 HR practitioners and managers were interviewed to supplement the data collected from the survey. The findings indicate that HR practitioners in Oman perform all the roles. However, ‘strategic partner’ is the least performed role. The findings also indicate that HR practitioners in the private sector are more likely to perform all the five roles to a greater extent than their counterparts in the public sector. We also found partial support for our proposition that HR practitioners in the public sector would play more ‘operational’ roles (e.g. employee advocate or functional expert) than ‘strategic’ roles (i.e. strategic partner or HR leader). The study revealed that Ulrich's model is robust enough to help in the understanding of HR roles in a non-western, developing country context. The findings are discussed within the context of institutional and cultural frameworks. The paper argues for more research to improve the understanding of how socio-economic and cultural factors influence HR roles and how they are performed.     

STRATEGIC INVESTMENT DECISION-MAKING: COMPLEXITIES, POLITICS AND PROCESSES*

This article is a preliminary report on an investigation into the processes of investment decision-making. Three case studies from three firms are presented which show disparities in a number of aspects of process, for example, the length of time taken to arrive at a decision, the number and intensity of disagreements and uncertainties encountered. Data were collected for these cases through semi-structured interviewing from multiple informants in the three organizations, thereby permitting the use of analysis of variance techniques of the different perspectives given by informants. Perceptions of the effectiveness of the decisions were also gathered. One finding from the study is that the decisions with the lowest perceived effectiveness (in firm HE) also lost support from those involved in making the decision during the process, although the decision was eventually implemented. This decision also had the least agreement amongst informants as to the main sources of disagreements. Informants of all three decisions saw effect upon product quality and productivity, fit with business strategy and competitive position of the company as the most important factors to take into account in evaluating the decisions. In firm CG, however, there were disagreements as to how the investment should be evaluated. In the conclusions to the article a disucssion is given as to the nature of evaluation procedures in relation to the developing theory of information systems.     

Managerial telework allowance decisions – a vignette study among German managers

Managers play an important role in the implementation of telework in organizations since they frequently have final approval over employees' requests for telework arrangements. Drawing upon March's (1994) dual-logic theory of decision making, the study examines antecedents of managers' responses to employees' requests for telework. Using a vignette study with a balanced experimental design, we investigated the impact of person-related, task-related and organizational context factors on managerial telework allowance decisions in German organizations. Several person- and task-related factors were found to be significantly related to managers' telework allowance decisions. Organizational context factors, such as a family-supportive organizational culture and formal policies were found to either directly or indirectly influence managers' responses to employees' requests for telework. More specifically, formal telework policies were important in stimulating favorable managerial telework allowance decisions when applicant criticality was low and the organizational culture was family-unsupportive. In line with March's (1994) theory of decision making, the study shows that utility maximization is only one perspective of decision making which managers apply to telework allowance decisions. Rule following and considerations of appropriateness are also taken into account by managers when deciding upon employees' telework requests.     

What Corporate Boards have to do with Strategy: A Cognitive Perspective

Traditional research on corporate governance has viewed the contribution of corporate directors to strategy making as limited by their lack of independence or firm-specific knowledge. To the degree that directors contribute to strategy, most previous research has viewed their role primarily as dealing with the conflict resulting from divergent preferences of agents and principles. The cognitive perspective this paper proposes suggests that directors contribute to dealing with the complexity and uncertainty associated with strategic decisions. It argues that directors possess valuable problem-solving expertise, which they can apply to a variety of contexts. Directors make their cognitive contributions to strategic decision making by performing along with a firm's managers a set of cognitive tasks: scanning, interpretation and choice.     

Flexibility in Strategic Decision Making: Informational and Ideological Perspectives

Adaptation is a crucial challenge for organizations, and an important theme in the strategy and organization theory literature. We still have much to learn, however, about the strategic processes by which adaptation is achieved. In this paper we focus on a basic element in the adaptation process, i.e. flexibility within the strategic decision-making process. We concentrate on strategic decisions because these choices are the most important adaptations the firm makes. We suggest that the core of all organizational adaptation is a decision-making process. Unless the decision-making process itself is flexible, it is unlikely the organization can be flexible enough to adapt. We derive hypotheses concerning the factors that lead to flexibility (versus rigidity) from both information processing and ideological perspectives, and test them in a study involving 57 strategic decisions in 25 companies. Our results identify three contextual factors related to both perspectives -- including competitive threat, slack and uncertainty -- that are helpful in understanding flexibility in strategy decision making. While managers appear to be more flexible when decisions are uncertain, we found that in the very conditions where managers need the most flexibility (high competitive threat and low slack), they are least likely to be flexible.     

Choosing strategic responses to address emerging environmental regulations: size,perceived influence and uncertainty

How companies respond to impending regulations is a significant aspect of corporate strategy. Regulations, especially environmental regulations, are expanding quickly and increasingly important to firm success. The threat of impending environmental regulation forces companies to choose levels of strategic responses on a continuum from passive to active. Using practitioner oriented research and existing theoretical models of corporate response, this study finds that the type of strategic response is negatively related to size, positively related to state uncertainty and negatively related to effect/response uncertainty. Based on existing literature and the results of this study, the paper suggests that simplifying the uncertainty construct could lead to more definitive findings in future research. The study results also suggest that a curvilinear relationship may exist between managerial perception of influence and level of strategic response. Most importantly, the findings could have a significant impact on firm decision making regarding environmental investments. For example, it is hoped that firms will be able to use the findings of this study to further understand and anticipate their competitors' decisions. Practitioners may also benefit from the conclusions on uncertainty in that they may be able to more cleanly parse the types of uncertainty immersed in impending environmental regulations. Finally, firms may be better able to understand decisions by their own managers and their competitors' managers in terms of their perceived influence over the regulatory process. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.     

Strategic Decision Making for the Triple Bottom Line

Corporate social responsibility (CSR) has become a mandate for strategic managers and is often an important element of a differentiation strategy, but there is little research on how managers can make socially responsible decisions within the context of competitive strategy. In this study we explain how data envelopment analysis (DEA) results can be used to determine the trade‐offs inherent in managing the triple bottom line of profits, people and the planet. Once the trade‐offs are well understood, managers can implement sustainable competitive strategies that incorporate socially responsible decisions. Using public data from the electric power generation industry, we demonstrate how DEA can be utilized to determine the trade‐offs between efficiency, costs and pollution reduction, allowing managers to make and champion socially responsible decisions. We discuss the general applicability of our method for making strategic decisions incorporating the triple bottom line. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment