Strategic Management
Strategic Management Journal, Vol. 13, 17-37 (1992)
STRATEGIC DECISION MAKING
KATHLEEN M. EISENHARDT and MARK J. ZBARACKI Department of Industrial Engineering and Engineering Management, Stanford University, Stanford, California, U.S.A.
This article reviews the strategic decision making literature by focusing on the dominant paradigms—i.e., rationality and bounded rationality, politics and power, and garbage can. We review the theory and key empirical support, and identify emergent debates within each paradigm. We conclude that strategic decision makers are boundedly rational, that power wins battles of choice, and that chance matters. Further, we argue that these paradigms rest on unrealistic assumptions and tired controversies which are no longer very controversial. We conclude with a research agenda that emphasizes a more realistic view of strategic decision makers and decision making, and greater attention to normative implications, especially among profit-seeking firms in global contexts.
Change swept strategic management research during the past decade. Triggered by the work of Miles and Snow (1978) and later Porter (1980, 1985), strategic content research flourished. The next decade may bring a similar revolution to strategic process. As Rumelt, Schendei, and Teece (1991: 22) write: 'Both theoretical and empirical research into the sources of advantage has begun to point to organizational capabilities, rather than product market positions or tactics, as the enduring source of advantage.' And, of course, strategic process research never really lost favor among the Japanese and Europeans, Central among strategic process issues is strategic decision making. It is crucial because it involves those fundamental decisions which shape the course of a firm. During the past 30 years, many researchers have recognized the centrality of the topic by tackling issues in strategic and more generally, organizational decision making. Overall, research has progressed
STRATEGIC DECISION MAKING
KATHLEEN M. EISENHARDT and MARK J. ZBARACKI Department of Industrial Engineering and Engineering Management, Stanford University, Stanford, California, U.S.A.
This article reviews the strategic decision making literature by focusing on the dominant paradigms—i.e., rationality and bounded rationality, politics and power, and garbage can. We review the theory and key empirical support, and identify emergent debates within each paradigm. We conclude that strategic decision makers are boundedly rational, that power wins battles of choice, and that chance matters. Further, we argue that these paradigms rest on unrealistic assumptions and tired controversies which are no longer very controversial. We conclude with a research agenda that emphasizes a more realistic view of strategic decision makers and decision making, and greater attention to normative implications, especially among profit-seeking firms in global contexts.
Change swept strategic management research during the past decade. Triggered by the work of Miles and Snow (1978) and later Porter (1980, 1985), strategic content research flourished. The next decade may bring a similar revolution to strategic process. As Rumelt, Schendei, and Teece (1991: 22) write: 'Both theoretical and empirical research into the sources of advantage has begun to point to organizational capabilities, rather than product market positions or tactics, as the enduring source of advantage.' And, of course, strategic process research never really lost favor among the Japanese and Europeans, Central among strategic process issues is strategic decision making. It is crucial because it involves those fundamental decisions which shape the course of a firm. During the past 30 years, many researchers have recognized the centrality of the topic by tackling issues in strategic and more generally, organizational decision making. Overall, research has progressed