factor influencing strategic decision making

Topics: Decision making, Decision theory, Decision engineering Pages: 37 (7059 words) Published: March 27, 2014
International Journal of Academic Research in Business and Social Sciences July 2012, Vol. 2, No. 7
ISSN: 2222-6990

Factors Influencing Strategic Decision-Making
Mahmood Nooraie
Ph. D. In Management , Islamic Azad University, Abhar Branch, Iran Email: (mnoor20@yahoo.com)
Decision-making is one of the most important functions of managers in any kind of organization. Among different manager's decisions strategic decision-making is a complex process that must be understood completely before it can be practiced effectively. Those responsible for strategic decision-making face a task of extreme complexity and ambiguity. For these reasons, over the past decades, numerous studies have been conducted to the construction of models to aid managers and executives in making better decisions concerning the complex and highly uncertain business environment. In spite of much work that has been conducted in the area of strategic decision-making especially during the 1990's, we still know little about strategic decision-making process and factors affecting it. This paper builds on previous theoretical and empirical studies to determine the extent to which contextual factors impact the strategic decision-making processes. Results showed that researches on contextual factors effecting strategic decision-making process are either limited or have produced contradictory results, especially studies relating decision’s familiarity, magnitude of impact, organizational size, firm’s performance, dynamism, hostility, heterogeneity, industry, cognitive diversity, cognitive conflict, and manager’s need for achievement to strategic decision-making processes. Thus, the study of strategic decision-making process remains very important and much more empirical research is required before any definitive conclusion can be reached.

1. Introduction
The recent years have witnessed rapid changes in information technology, the new world economic order, the coming of the new regional power and many others. All these changes have presented on the one hand a very dynamic world of increased population, inflation, social consumption, and on the other hand limited scarce resources. In such a complex and fast changing business environment, managers are faced with a multitude of decisions every day. They have to make decisions even if they are not willing to do so. Pearce II & Robinson (1989) indicated that decision-making is inevitable, because to explicitly avoid making a decision is in itself to make a decision. Toffler (1980) in his book entitled The Third Wave indicated that to make too many decisions, too fast, about too many strange unfamiliar problems introduce a new element into management, forcing executives already nervous in unpredictable environment to make more and more decisions and at a faster and faster pace.

Among manager's different decisions strategic decisions are very important and play very vital roles in any organization.



International Journal of Academic Research in Business and Social Sciences July 2012, Vol. 2, No. 7
ISSN: 2222-6990

This study explores strategic decision-making process and factors affect the processes. The choice to focus on strategic decisions is due to its nature and significance. Strategic decisions are long term, highly unstructured, complex, and inherently risky and have great impact on the future of the organization. Strategic decisions are those important decisions that typically require a large amount of organizational resources, and firm‘s environment consideration. In strategic decisions, top management usually plays a central role, in making the decisions (Hofer & Schendel, 1978). These decisions influence organizational direction, administration, and structure (Christensen et al., 1982).

Since strategic decision not only affects the organization in which they are taken but also the society (Colignon & Cray, 1980), it is not surprising that strategic...

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