Reference no: EM132229652

The text states that strategic decisions are (1) rare, (2) consequential, and (3) directive. These deal with the long-term future of the entire organization. To aid in the decision making, the authors suggest an eight step decision-making process. Found on page 25 in the text, these include: (1) evaluating current performance results; (2) reviewing corporate governance; (3) scanning and assessing the external environment; (4) scanning and assessing the internal corporate environment; (5) analyzing the strategic factors; (6) generating and selecting the best alternative strategy; (7) implementing selected strategies; and (8) evaluating implemented strategies. These guidelines for making and evaluating decisions at a strategic level can be important for leaders.

Open today’s issue of The Wall Street Journal and look for an article about new moves being made by a corporation, specifically the decisions that are strategic. At what level is each of the decisions that you identified? Functional/Business/Corporate? Why do you believe this to be the case? What is your assessment of these decisions? Will they be effective? Why? How have you decided this?

Good arguments can be made for using the entrepreneurial, adaptive modes, or logical incrementalism approaches in certain specific situations.63 This book proposes, however, that in most situations the planning mode, which includes the basic elements of the strategic management process, is a more rational, better tested, and more complete method for mak-ing strategic decisions. Research indicates that the planning mode is not only more analytical and less political than are the other modes, but it is also more appropriate for dealing with complex, changing environments.64 We therefore propose the following eight-step strategic decision-making process to improve the making of strategic decisions (see Figure 1–5): ¦ Evaluate current performance results in terms of (a) return on investment, profit-ability, and so forth, and (b) the current mission, objectives, strategies, and policies. ¦ Review corporate governance—that is, the performance of the firm’s board of direc-tors and top management. ¦ Scan and assess the external environment to determine the strategic factors that pose opportunities and threats. ¦ Scan and assess the internal corporate environment to determine the strategic fac-tors that are strengths (especially core competencies) and weaknesses. ¦ Analyze strategic factors to (a) pinpoint problem areas and (b) review and revise the corporate mission and objectives, as necessary. ¦ Generate, evaluate, and select the best alternative strategies in light of the analysis conducted in the previous step. ¦ Implement selected strategies via programs, budgets, and procedures. ¦ Evaluate implemented strategies via feedback systems, and the control of activities to ensure their minimum deviation from plans.