Strategic decision-making processes: the role of management and context

• Published in: Strategic management journal Vol. 19; no. 2; pp. 115 - 147
• Main Authors: Papadakis, Vassilis M., Lioukas, Spyros, Chambers, David
• Format: Journal Article
• Language: English
• Published: Chichester John Wiley & Sons, Ltd 01.02.1998; John Wiley and Sons; Wiley; John Wiley; Wiley Periodicals Inc
• Subjects: Applied sciences; Business strategies; Business structures; Chief executive officers; Corporate strategies; Correlation analysis; Decision making; Decision theory. Utility theory; Determinism; Discriminant analysis; Exact sciences and technology; Financial reporting; Formalization; Horizontal communication; Management; Management decisions; Management science; Middle management; Operational research and scientific management; Operational research. Management science; Organization theory; politics; rationality; strategic decision-making; strategic decisions; Strategic management; Strategic planning; Studies; Subsidiary companies; top management; Context; Policy; Data analysis; Top management; Decision making; Strategy; Management
• ISSN: 0143-2095; 1097-0266
• DOI: 10.1002/(SICI)1097-0266(199802)19:2<115::AID-SMJ941>3.0.CO;2-5

This paper investigates the relationship between the process of strategic decision-making and management and contextual factors. First, drawing on a sample of strategic decisions, it analyzes the process through which they are taken, into seven dimensions: comprehensiveness/rationality, financial reporting, rule formalization, hierarchical decentralization, lateral communication, politicization, problem-solving dissension. Second, these process dimensions are related to (1) decision-specific characteristics, both perceived characteristics and objective typologies of strategic decisions, (2) top management characteristics, and (3) contextual factors referring to external corporate environment and internal firm characteristics. Overall, the results support the view that strategic decision processes are shaped by a multiplicity of factors, in all these categories. But the most striking finding is that decision-specific characteristics appear to have the most important influence on the strategic decision-making process, as decisions with different decision-specific characteristics are handled through different processes. The evident dominance of decision-specific characteristics over management and contextual factors enriches the traditional 'external control' vs. 'strategic choice' debate in the area of strategic management. An interpretation of results is attempted and policy implications are derived.