Based on Henry Fayol’s definition, managerial functions are identified by planning, organizing, commanding, coordinating, and controlling (Robbins and Coulter, 2005). Thus strategic decision makings are involved in mangers during the operations of an organization. Managers have to make thousands of strategic decisions in order to keep their organization in the pace of business.
Due to globalization era, managers have to think and act fast in order to capture all business opportunities. Meanwhile, they also have to eliminate, and if not mitigate, the level of threats toward their organization. Thus, managers’ strategic decision makings are crucial to the survival of the organization. Robbins and Coulter (2005) stated that decision is part of managerial functions. Further, decision making is important in a manager’s job.
Behavioral Decision Theory
Nutt (1976) stated that behavioral decision theory (BDT) has faced validity of satisficing and serial search do seem to portray the behavior of decision makers. Moreover, Wildavsky (1966; in Nutt, 1976) stated that decision makers do not know what they want because they do not know what they can get. March (1958; in Nutt, 1976) found that decision making as practiced in organizations is a serial process and that satisficing is used as a decision rule. Conrath (1970; in Nutt, 1976) stated that the decision maker is also influenced by uncertainty; as uncertainty increases, so does search time, care of evaluations, and resources allocated to the search process. Finally, BDT model seems to describe what skillful decision makers often try to do when grappling with complex decisions (Nutt, 1976).
Strategic Decision Making
By definition, decision making is the process through which managers identify organizational problems and attempt to resolve them (Bartol & Martin, 1994). Crook, Ketchen, and Snow (2003) stated that the purpose of strategic management research is to help find ways to