Strategic Decision-Making Essay

1921 Words Apr 2nd, 2013 8 Pages
“Rational decision-making is an impossible ideal in strategy formulation and implementation due to incomplete information and organisational politics.”

Strategy is formulated and implemented by organisations as a means of gaining competitive advantage and achieving organisational success. Frequent fast, widely supported, and high quality strategic decisions are the cornerstone of effective strategy (Eisenhardt, 1999 in Clegg et. Al, 2012). In today's world of borderless business, ever-evolving technology and rapid change, can these decisions be made rationally? Currently there are three main decision-making paradigms in the literature – rational decision-making, political decision-making and the garbage can model. Each paradigm frames
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It is important, in my view, to approach these significant and complex decisions in a systematic manner when possible. However in a dynamic world, where business is borderless and technology is advancing at an ever increasing rate, I would question the utility of this approach. Context is key.

Political decision-making model
The political model of decision-making presents a compelling case against the possibility of perfect rationality in strategy formation and implementation. In fact, according to Clegg (2012, p.267) the biggest enemy of rationality is the power and politics that are inscribed in every organisational decision. The division of an organisation into separate departments, encourages political activity between them as they compete for scarce resources (Pettigrew, 1973). Coalitions are formed around a perceived affinity of interests, with the ultimate aim being to accrue enough power to influence the decision-making process. It is out of this struggle for power that decisions emerge. Strategic decisions are particularly likely to stimulate political actions because they are complex, significant, and subject to uncertainty. There may be much to gain/lose for each of the players from both a material and reputational point of view (Child, Elbanna & Rodrigues, 2010). Take for example, an organisation such as a hospital. It is pluralistic in nature, often experiencing

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