Decision making is the most important function of any manager. Strategic decision making is the prominent task of the senior management. Both kinds of decision making are essentially the same. The difference lies in the levels at which they operate. While decision- making pertains to all managerial functions, strategic decision making largely relates to the responsibilities if the senior management.
Conventional Decision - Making
Most people agree that decision making is the process of selecting a course of action from among many alternatives. The process works somewhat like this:
1) Objectives to be achieved are determined.
2) Alternatives ways of achieving the objectives are identified.
3) Each alternative is evaluated in terms of its objective- achieving ability, &
4) The best alternative is chosen.
The end result of the above process is a decision or a set of decisions to be implemented. Such a process of decision making is deceptively simple. In practice, decision – making is a highly complex phenomenon. The first set of problems encountered in decision making is related to objective setting. Second, the identification of alternatives is a difficult task. How to test the objective – achieving ability of each alternative is easier said than done, &, lastly choosing the best alternative is a formidable task too.
Issues in Strategic Decision – Making
1) Criteria for decision making: - The process of decision making requires objective setting. These objectives serve as yardsticks to measure the efficiency & effectiveness of the decision making process. In this way, objectives serve as the criteria for decision making. There are three major viewpoints regarding setting criteria for decision making.
a) The first is the concept of maximization. It is based on the thinking of economists who consider objectives as those attributes which are set at the highest point. The...