PROCEDURAL RATIONALITY IN THE STRATEGIC DECISION-MAKING PROCESS*

Despite the central place of rationality in the organization theory, strategic management, and decision-making literatures, we know relatively little about why some strategic decision-making procedures are more rational than others. This question was addressed in a study of 57 strategic decisions in 24 companies, using a multiple-informant, structured interview protocol. Results indicate that environmental competitive threat, perceived external control of the organization, and the uncertainty of the strategic issues being addressed are related to procedural rationality. Surprisingly, some of these relationships were in the opposite direction from our predictions. These results are interpreted within a framework that emphasizes the link between procedural rationality and managerial discretion.     

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     

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.     

COMPLEXITY AND CLEAVAGE: DUAL EXPLANATIONS OF STRATEGIC DECISION-MAKING [I]

This paper presents a framework for the comparative analysis of strategic decision-making processes. It draws together and integrates predominant but previously disparate theories of decision-making. Examples are given of how decision-making processes may be characterized and, hence, facilitate comparison across all types of strategic decisions. Explanation of why decision processes may differ is from two perspectives. First, the complexity of the topic may lead to particular characteristics of the decision process. Secondly, the cleavage of interests which a topic arouses may also lead to particular aspects of decision processes. We argue that each decision topic has varying levels of both complexity and cleavage and four examples of strategic decisions are analyzed on these dimensions. We identify four profiles of decision-making processes associated with varying levels of complexity and cleavage and we finally suggest that our model may explain and empirically demonstrate variations across a large number of diverse strategic decisions.     

A conceptual framework for leveraging team composition decisions to build human capital

Twenty-first century organizations often rely on teams to enact their strategy and to enhance their flexibility in interacting with their external environment over time. Team composition, or the configuration of team member attributes, can influence team effectiveness and is an important consideration in the management of teams. To date, however, there is limited guidance on how seemingly smaller team composition decisions can contribute to organizational effectiveness and competitive advantage. We draw on strategic human resource management (HRM), HRM, and industrial and organizational psychology literatures to develop a conceptual framework for strategic team composition decisions. We describe how organizations use teams to enact their strategy (i.e., fit), and use adaptive teams and networks of teams to achieve fit in a dynamic environment (i.e., flexibility). Using the concepts of fit and flexibility, we develop four guiding principles for strategic team composition decisions.     

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.     

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.     

关于董事会战略角色的分析与研究

针对董事会参与战略,历史上出现了两个不同的主义,分别是"被动"主义和"积极"主义,文章梳理了与此相关的五大理论视角及其演进脉络。并以此为基础,识别出董事会发挥其战略角色的过程中存在的三个层次:选择战略决策;调整战略决策;调整战略的背景、程序和内容。最后,对中国上市公司构建战略型董事会进行思考,提出了建议。     

Stakeholders’ Attributes,Behaviors, and Decision‐Making Strategies in Construction Projects: Importance and Correlations in Practice

Project managers need to make decisions on how to balance competing claims between the different stakeholders in projects. Previous studies have suggested that the choice of decision‐making strategies is highly related to stakeholders’ attributes and behaviors in practice; however, limited studies have been conducted in the construction field to analyze the importance of stakeholders’ attributes, behaviors, and decision‐making strategies, and validate the correlations between the factors and decision‐making strategies. To analyze the underlying meanings of stakeholders’ attributes, behaviors, and decision‐making strategies from the practitioners’ perspectives, and indicate the influence of stakeholder‐related factors on decision‐making strategies, an interview, questionnaire survey, and case study were adopted. Empirical studies suggest that three stakeholder attributes (power, urgency, and proximity), and four types of stakeholder behaviors (cooperative potential, competitive threat, opposite position, and neutral attitude) are perceived by the practitioners as important to dealing with stakeholder claims. Depending on stakeholders’ salience levels and behavior types, strategies of defense, compromise, or concession/adaptation are chosen and applied by project managers in practice. The findings can help project managers to proactively understand stakeholder performance, place emphasis on particular attributes and behaviors, and formulate appropriate schemes under different circumstances.     

On becoming a strategic partner: The role of human resources in gaining competitive advantage

Although managers cite human resources as a firm's most important asset, many organizational decisions do not reflect this belief. This article uses the value, rareness, imitability, and organization (VRIO) framework to examine the role that the human resource (HR) function plays in developing a sustainable competitive advantage. Why some popularly cited sources of sustainable competitive advantage are not, and what aspects of a firm's human resources can provide a source of sustainable competitive advantage are discussed. The role of the HR executive as a strategic partner in developing and maintaining competitive advantage within the firm is also examined. © 1998 John Wiley & Sons, Inc.     

How strategic considerations influence decision making on e-HRM applications

Although numerous studies indicate that the added value of human resource management is strongest when HRM decisions are linked to the organizational strategy, practical knowledge about how strategic considerations influence decision-making processes relating to e-HRM is limited. Therefore, the purpose of this study is (1) to examine in three case studies how strategic considerations influence the decision-making process around the introduction of e-HRM applications, (2) to present propositions for further research, and (3) to offer recommendations on how to better include strategic considerations in the decision-making process. Three in-depth case studies of companies' e-HRM implementation were performed using a model on e-HRM strategy formulation (Marler, 2009). The case studies reveal that when specific business drivers are absent from the decision-making process, the main role of e-HRM becomes to provide an infrastructure with a focus on preventing dissatisfaction. In order for e-HRM to be used in a more strategic way, business and HRM should be aligned.Based on the findings, we offer research propositions for academics studying this emerging field of the interconnections between strategy, human resource management and IT systems. In addition, we offer recommendations for HR practitioners on how to optimize the match between business and HRM.     

Systems for Sustainable Organizations: Emergent Strategies,Interactive Controls and Semi-formal Information

New-form organizations are likely to organize more explicitly around processes than traditional-form organizations that emphasize functional hierarchy. Developing process-based strategic responses quickly using diffuse sets of resources is likely to play an increasingly important role in sustaining new organizational forms. Three ideas introduce alternative perspectives on strategy formulation, management control and information systems design that may be useful in understanding organizational performance in this area. They focus on: (1) emergent strategies, (2) interactive management controls, and (3) semi-formal systems. In combination these three perspectives describe relationships between strategy, organizational design and systems support that suggest mechanisms for improving the sustainability of new organizational forms. To some degree distributed organizational structures such as networked organizations and quasi-organizational forms such as alliances, partnerships and joint ventures represent attempts to solve a paradox of competitive agility. This paradox suggests that in the context of rapidly changing, increasingly global markets, organizations need to be flexible (so they can respond quickly to competitive threats) yet remain stable (so they can learn and grow based on their strengths). If this is the case, what systems and tools are available that encourage a productive balance between flexibility and stability? This paper uses the experience of regional management teams at a large consumer goods company to suggest how interactive controls and semi-formal information systems combine to increase the agility of a distributed organization that can employ emergent strategies. Evidence illustrates some of the mechanisms by which (a) faster response times deliver organizational flexibility while (b) semi-formal analytics add the stability of knowledge and guidance shared across organizational sites. Examples discuss the use of information within management teams, discussion behaviour within management meetings, and organizational performance in response to crisis events. In this context the paper analyses the characteristics of new-form systems that could be used to sustain new-form organizations While the development of process-oriented semi-formal systems is just beginning, the potential for linking such technology with newly developed approaches to management control appears to have important implications for the practice and performance of management in new-form organizations. In particular, interactive controls and semi-formal information appear to offer leverage as mechanisms for organizational adjustment during times when organizations must exploit emergent strategies     

Work-force cutback decisions of Israeli managers: a test of a strategic model

This study investigates the decision-making pattern of managers in the Israeli electronics industry. The purpose of the study is to examine whether decisions regarding work-force cutbacks in this industry follow Greenhalgh, Lawrence and Sutton’s (1988) model of work-force reduction. Their model proposes that such decisions are made incrementally and hierarchically, ranging from lay-offs with no severance pay (the most severe strategy for employees’ well-being), to hiring freeze (the least severe strategy for employees’ well-being). The study hypothesis was that cutback decisions of Israeli managers followed this hierarchy, and that the likelihood of the hierarchical decision- making pattern was increased in groups characterized by non-Israeli national affiliation, public sector affiliation, corporate guaranteed employment policy and employment of temporary labour. It was also hypothesized that these characteristics determined the point at which cutback decisions enter the cutback strategies hierarchy. The results of the present study showed that Israeli managers, unlike their American counterparts, generally have not followed this strategic model. However, in a sub-group analysis it was found that the incremental model was used in those organizations characterized by affiliation with the public sector, by use of temporary labour and by guaranteed employment policy. The only characteristic found significantly to determine the entering point in the cutback hierarchy was sectoralaffiliation. These findings are explained using four different theoretical approaches: (a) downsizing decision making (there is little evidence in literature of rational decision making under conditions of organizational stress); (b) cultural differences (Israeli managers, unlike their American counterparts are characterized by last-minute solutions and improvisations); (c) organizational context (the nature of the high-tech industry studied and its lack of downsizing experience); and (d) organizational politics (strong involvement of government and labour unions in the cutbacks process).     

Management Strategy and Labour Flexibility In Japanese Manufacturing Enterprises

Since the 1970s Japanese labour relations and management practices have been scrutinised as Western firms search for ways to improve their productivity and international competitiveness. Pervading this literature is the view that the Japanese labour market is flexible and adaptable. the purpose of this article is to ascertain if flexibility is a key strategic objective of management and if Japanese firms adopt a core-peripheral approach to employment. the research is based on a survey of Japanese enterprises conducted and detailed interviews with senior managers. the major finding is that Japanese labour practices have a strategic component and that the use of casual and contract workers is consistent with a core-peripheral labour strategy.     

The Role of Human Resource Management in Strategy Making

Among the strategy scholars, there is general consensus that responsive‐integrative strategy making is essential for ensuring a competitive advantage in contemporary dynamic environments. What is the role of HR in this process, and how can HR support responsive‐integrative strategy making? To answer these questions, we use illustrative experiences from Chr. Hansen, a global supplier of bioscience‐based ingredients to the food, health, and animal feed industries. We argue that HR's strategic role lies in providing support for both centralized and decentralized strategy making by offering aspirations for strategic decisions and by gathering various sources of inspiration for strategy discussions. © 2013 Wiley Periodicals, Inc.     

Post‐Acquisition Restructuring as Evolutionary Process*

ABSTRACT The transformation and integration of acquired businesses is subject to tensions between implementing radical change to match the strategy and corporate culture of the acquirer, and promoting what is valuable in resources and cultural attributes in the acquired organization. Analysts’ disagreement arises from different conceptualizations of the nature of resources. We present an evolutionary perspective that demonstrates not only the merits of competitive selection, but of local adaptation of transferred resources and of stimulating the development of local ones. Evidence from 18 original case studies in Hungary and East Germany shows that a defensive focus on short‐term efficiency, i.e. downsizing, may fail to realize the long‐term potential of the organization. Acquirers supporting an evolutionary development of their new subsidiary by providing autonomy and complementary resources might well have to tolerate some slack in the short run, but may realize more of the potential contributions of the acquired assets in the long run.     

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 Mking, Discourse, And Strategy As Social Practice

In this paper we argue that the existing conceptualizations of strategic decision making, while each affording valuable insights, offer only partial and disconnected perspectives of the strategy process that leave important questions un-addressed. To overcome this problem we develop an empirically grounded conceptualization of strategic decisions as elements of a strategic discourse, operating at both the structural level of social reproduction and the instrumental level of intentional communication, and constituting the medium through which choices are discussed and recorded, interpretations developed and expressed, and strategic actions initiated, authorized and acknowledged. This conceptualization opens up a number of research questions concerning the role of strategic decision making in the overall strategy process and leads to a fruitful conceptualization of strategy itself as a technological and appropriative social practice.     

The mediating role of speed in the global sourcing decision process

The principal aim of this study is to provide theory and testing to elucidate the role of decision-maker's decision process and speed during the global sourcing decision-making process (GSDP). In order to achieve this goal, we examine the behavior of a sample of 202 decision-makers belonging to Italian SMEs in the manufacturing sector. Our main finding suggests that faster decisions during the GSDP process lead to superior financial and non-financial performance of the selected supplier. Moreover, we find support for dual processing theory wherein rationality and intuition of the GSDP are associated with increased supplier performance both directly and through their effects on decision speed. Results are discussed in terms of the GSDP, SME and strategic decision-making literatures and practical implications for managers in SMEs.     

Information Gathering and Changes in Threat and Opportunity Perceptions*

abstract Managers need to make sense of emerging strategic issues that could significantly impact their businesses. While models of this sensemaking process suggest that information gathering affects interpretations (which affect action and performance), researchers have argued that our understanding of the role of information in changing interpretations is underdeveloped. This paper investigates the role of the time managers spend searching for information and the diversity of the information they find in changing managers’ perceptions that an equivocal, strategic issue represents a threat and opportunity for their businesses. The methodology involves a longitudinal research design in which managers recorded multiple, process‐oriented measures of their information gathering activity. Results suggest that time spent searching for information leads to changes towards seeing the issue as more of a threat, while the diversity of information found leads to changes towards seeing it as less of a threat. We found no effect of information gathering on opportunity perceptions.