Decision Making and Strategy Development

Running head: DECISION MAKING AND STRATEGY DEVELOPMENT
Decision Making and Strategy Development
Name
Institution
Course title
Instructor
Date

DECISION MAKING AND STRATEGY DEVELOPMENT 2

Introduction
Strategy was developed as a principle influence on enterprise and performance.
Ansoff (1965), Chandler (1962), and Andrews (1971) propose that a distinction is arrived at
betwixt the strategic management “process” and the strategy “content”. Content is interested
in the kind of strategic decision, while procedures concentrate on its implementation and
formulation. The critical phenomena on process are generally vague and divergent in time
and space. The strategy formation, decision – making, the creativity, and the learning are
procedures that occur continually which implies a rise in complications. The personal
analysis of every procedure is not adequate to offer an explanation on the reality but a study
on parameters of decision making, and strategy development can enable an individual to get a
better understanding of how the two interrelate.
How do Individual and group decision processes aid or impede business decision
making?
Decision making is a critical concern in all enterprises and an organizations success is
directly linked to the quality of decisions reached. Customarily, most decisions were arrived
at by individuals that basically held high positions within the corporation. Nonetheless, over
the past couple of decades, this individual decision making has changed and group decision
making is gaining more popularity. This alteration has gotten precipitated by the flatter
structures adoption by organizations; a development that has led in additional group
participation in the process of decision making.
However, there is a growing debate whether groups are prone to making better
decisions as compared to individuals in isolation (Mukherjee, Dicks, Shackelford, Vira, &
Sutherland, 2016). Based on the concept of synergy, decisions collectively made have a
tendency of being more efficient that decisions made by a single person. Building on gestalt’s

psychological concept, it is presumed that an enterprise as a whole is perceived as more than
an aggregate of its facets (Bang & Frith, 2017). Nonetheless, empirical results in existence
are mixed. For example, Kagei and Cooper reported that minute groups in strategic tasks
deliver results that supersede most optimistic expectations, that is, better than the ones from
those persons that are most skilled in the group (Cooper & Kagel, 2005). On the contrary,
other surveys report no distinction or even worse conduct of teams relative to persons (Miner,
1984). However, based on literature review, the paper asserts that the preference of either
individual or group decision making should be based on a situation.
Decision Making Theory
The main aim of decision making is picking the most efficient and effective solution
amid alternatives. Positive theory asserts that a selected course of action is arrived at based
on the assumption that it will yield the results desired for the organization. All purposeful
actions conducted by an individual or group, therefore, ought to be directed towards getting
options that bring about the outcomes desired. Moreover, it is clear that decision making is a
process that lowers uncertainty to a certain degree and in most cases; uncertainty is lowered
as compared to being eliminated. It is only in countable instances that decisions are arrived at
with absolute certainty (Ahmed & Omotunde, 2012). This perspective explains why most
businesses prefer group decision making. They are believed to be advantageous because
decision making draws from the perspectives and experiences of an extensive number of
persons lowering the risk of decision making. Moreover, group decision making is believed
to be more conservative though more recent studies, as we shall examine in the subsequent
sections, depict that group decision making is becoming more risky.
Group Decision Making

Group decision making is a kind of participatory procedure whereby multiple persons
acting together, examine situations or issues, evaluate and consider alternative courses of
action, and choose from amid the alternatives of a solution or solutions. The aggregate of
individuals involved in group decision – making greatly varies, most often than not, it ranges
from two to seven. The persons in a group can be similar demographically or extensively
diverse. Decision – making groups can be relatively informal in nature, or formally charged
and designated with a certain goal. The procedure utilized to arrive at decisions can be
structured or unstructured. The composition and nature of groups, their demographic makeup,
their size, and purpose, all influence their functioning to a certain degree. The exterior
contingencies that groups face (conflicting goals and time pressure) affect the efficiency and
development of decision – making groups as well (Hinsz & Nickell, 2004).
How Group decision making aids in business decision making
The members of a group hail from varied backgrounds and can have diverse ways and
perspectives of solving issues or implementation. This heightened diversity of looking at an
issue can be presented at the table in the course of making decisions (Gottlieb, 2009). Hence,
deliberations in a group will aide in the identification of strategic opportunities and problems
because of the group’s diversity.
Secondly, there is a heightened adoption of solutions that are arrived at by a team.
This is because when a decision is determined by a group, the members develop a sense of
ownership for the solution arrived at (Gottlieb, 2009). Moreover, since the employees were
involved in decision making, it leads to heightened morale by the members of a group is
addition to an increased commitment level by the person to the tasks being considered in an
organization.

Group decision making leads in information that is more compete being availed to
help in the process of decision making. This is based on the fact that group decision making
aids in overcoming the knowledge limitations that a person possesses (Gottlieb, 2009).
Groups increase the probability of pooling data concerning varied complicated tasks. The
quality of the decisions arrived at by the group is greater than that resolved by an individual
and it also has the probability of being more precise.
How Group decision making impedes business decision making
Tentatively, the most remarkable probity of group decision making is the degree of
time consumed in arriving at the resolution. Ideally, in a group setting all members are
expected to contribute their views in the process of decision making. This result in substantial
time being consumed contrasted to the time it would take an individual to resolve an issue.
The time taken further increases when in the group there is polarization. Robert and Krizan
(2008) describe group polarization as the tendency of members of a group to raise their
position’s extremity after a discussion on a relevant matter.
The decision making of a group can get plagued by domination by a single or several
members of a group. This dominance can lead to aggression and even territorial tendencies
which is in contrast with the goals of the process of the group which encompasses sharing
and responding to concepts, not taking over” (Kolin, 2009). There is heightened pressure on
individual group members to conform in making decisions as a group. This is because some
groups need some degrees of uniformity for decisions to be arrived at successfully.
Conformity encompasses having individual members modify their conduct so that
they can be in line with the prevailing standards of the group (Gottlieb, 2009). The group can
assert pressure on the person to alter their attitudes, opinion, or behavior so as to conform to

the template of the group. Conformity generates a lot of compromises that can result in the
decision being arrived at being less than optimal.
Consequently, Hart (1991) described the group think phenomenon as a mental
efficiency deterioration, moral judgement, and reality testing leading from pressure in the
group. Groupthink transpires when a group faces the pressure to conform to what appears like
a dominant perspective of the team. Dissenting perspectives of the opinion of the majority is
suppressed and alternative courses of action do not get explored completely.
Survey implies that specific attributes of groups contribute to the phenomena of group
think. Initially, if the group fails to have an agreed upon procedure for evaluation and
developing alternatives, there is a probability that an incomplete array of alternatives will be
placed into consideration and that distinct courses of action will not be completely explored.
Most of the formal processes of decision making (like brainstorming, and nominal group) are
modelled, partially, to lower the probability for groupthink by making sure that members of a
group offer and consider a wide array of alternatives to decision making. Additionally, in case
a strong leader dominates group, other members of the group can swiftly end up conforming
to the dominant perspective. Further, in case the group is under time pressure or stress, group
pressure can take place. Lastly, surveys imply that groups that are highly cohesive have a
higher susceptibility to groupthink (Gershoni, 2019).
Individual Decision Making
An individual’s resolutions can play a significant role in an organization. This is
particularly the case since in organizations; a lot of the monumental decisions that can break
or make an organization are arrived at by individuals at the top managerial ranks.
How individual decision making aides in business decision making

People have a higher likelihood of arriving at decisions that are prudent for the
organization. Survey depicts that groups have a higher probability of taking greater risks that
an individual is likely to (Rothwell, 2012). This is due to the fact that consequences a foul
group decision is not likely to be as severe as it may be to a person. Therefore, an individual
has a higher probability of exercising caution when arriving at a decision.
When a timely decision is required, individual decision making is more ideal since
group decision making take up more time as deliberations are being arrived at (Gottlieb,
2009). While surveys depict that committees can make better resolutions than the average
personal member, they consume so much time deliberating. Further, since a person is not
getting any pressure to conform, she/he will come up with a solution that is independent. This
liberty from conformity can lead in unorthodox yet efficient outcomes being attained by the
person.
How individual decision making impedes business decision making
A person suffers from information and knowledge limitations. This will hinder the
process of decision making since the data available may not be complete. Therefore, the
solution arrived at has a likelihood of being less precise than may be the case in group
decision making (Gottlieb, 2009). Consequently, a person can lack the perspective diversity
that is innate in groups. Therefore, the decision arrived at can be less holistic in perspective
because of the restricted perspective of an individual. Gastil (2010) insists that the person has
a reduced probability of taking all the substantial parameters into consideration when arriving
at a decision.
Discussion
As observed, both individual and group decisions have their innate demerits and
merits. Groups can be a source that is valuable and an avenue via which an organization

manages to harness the creative powers of employees (Gottlieb, 2009). Therefore, group
decision making appears like the best suited approach to support business decision making.
After all, a popular Condorcet Jury Theorem stresses that most of them have a higher
likelihood than any single person to pick the most ideal from the two alternatives, depending
on the assumption that the aggregation of information is enough. Exploratory surveys bolster
up this prediction by continually finding group decisions as having more consistency with
rationality (Baillon et al., 2016).
Further, group decision making increasingly aides in arriving at well contemplated
decisions because groups are less extreme and more predictable owing to the ‘compromising
effect’ – personal members’ opinions averaging out so as to arrive at a consensus (Adams and
Ferreira, 2010). Even in cases where consensus is not a requirement, surveys depict that a
tendency towards dissent aversion or unanimity, particularly when group members repeatedly
interact. Consequently, Adams and Ferreira (2010) prognosticates that the ‘membership –
effect’ – groups opting to excludes persons with extreme perspective or such persons leaving
the groups voluntarily – amplifies the moderating impact of groups.
Nonetheless, there are scholars that have cast doubt on the moderation and wisdom of
groups that have increased their popularity in the business. Social psychology posits that
varied cognitive biases can lead to the opposite result. The occurrence referred to as group
polarization, was documented repeatedly in experiments at the lab are supported by various
theoretical approaches (Glaeser and Sunstein, 2009). Two kinds of likely choice shifts of
teams, either cautious or risky were depicted under varied situations and depicted to be
dependent on the individual predispositions of group members and the deliberation extent.
Therefore, if adequate group decision making frameworks are not well stipulated,
group decision making can end up being a stupendous misuse of energy and time which ends

up lowering the efficiency of a business. The maxim “a Carmel is a horse modeled by a
council” is utilized to depict that groups have the ability to generate absurd outcomes because
of the distinct perspectives that its members hold. This maxim is often attributed to Sir Alex
Lssigonis who was a well – known vehicle designer (Rothwell, 2012). He posited this maxim
with an intention of depicting that a group has the power to redesign an ideal concept into a
less ideal one.
This maxim lays emphasis on the inefficiencies that may be triggered by having a lot
of divergent opinions by group members. Having considered this, then the decisions of an
individual can be better suited for an organization. Group decision making leads to the
sieving out of data that is extreme (Rothwell, 2012). This implies that decisions that are either
extremely bad or extremely good end up being avoided. In the current business environment,
the success of an organization is dependent on coming up with new and extremely great
solutions. Therefore, group decision making can keep an organization from attaining its full
potential. In such instances, individual decision making can yield better outcomes and
become the better option.
What are the Newest Directions in the Process of Strategy Development and Execution?
The process of strategic management is about moving from Point A to Point B more
efficiently, effectively, and enjoying the journey and obtaining knowledge from it. A facet of
that journey is the strategy development and the other part is its execution. Being in
possession of a good strategy dictates the way you travel the road you have chosen and
efficient execution ensures that you keep checking in along the way. On average, this
procedure takes betwixt three and four months. Nonetheless, there is not a single organization
that resembles another and an organization can decide to either slow down or fast track their
procedure (Dyson, Bryant, & Morecroft, 2007). At the same time, there are arising

propositions on the directions that the process of strategy development and execution ought
to take as shall be explored in the subsequent paragraphs below.
Performance – based strategy
In the 1990s, the strategic development basis shifted from specific deployment of
resources to stipulating and monitoring the goals of performance. The companies’ strategies
orientation around the creation of the shareholder value encompassed merging financial
control and strategic planning. Modifying strategy around the value of the shareholder
availed a driving force behind the principal strategic thrusts of the 1990s – outsourcing, cost
reduction, peripheral enterprises disposal – and the insistence on core potentials as the
foundation for competitive benefit. In merging strategy to the objective of maximizing the
wealth of shareholders, the management at the top was forced to face up to the issue that,
alone, developing shareholder value is a goal that is nebulous. It is long-term and its merge of
strategy to the value of the market of the corporation is both long term and indirect. It fails to
readily provide a basis for developing easy – to – monitor, actionable performance aims.
Kaplan & Norton (1996) proposes the use of a business scorecard in developing and
measuring the objectives of performance. However, the balanced scorecard proposed goes
beyond the core theme of coming uo with a set of procedures for the articulation and
implementation of entrepreneurial and corporate strategy. The balanced scorecard provides a
technic for integrating the efforts of the entire organization, which involves all employees in
discussion of the strategy of the organization; the way it avails continued feedback on the
efficiency of the strateg, and the way it mobilizes modifications via executive leadership.
The most substancial expansion of the balances scorecard’s role in the strategy
procedure lies in the idea of the “strategy map” where the primary basis of the scorecard is
not simply articulating the company’s strategy but also the conceptualization of the way the

strategy works on the bsisi of the underlying dynamics via which strategy propels
performance. The strategy map merges the financial perspective of the scorecard (the
fundamental driver of thevalue of the shareholder) with internal, client, and learning, and
advancement perspectives. Therefore: the perspectives of the client describes the proposition
on client value that will deliver the economic performance, the interior perspective delineates
the way interior operations and creativity will establish that client value, and learning the
growth and learning perspectives depicts the way underlying “strategic competencies”,
strategic technologies, and action climate will develop the interior capability that is required
by the interior procedures (Kaplan & Norton, 2001).
However, the peril with this proposed strategy development and implemention
process lies in that a useful tactic for performance management is getting oversxtended. The
significant value of the balanced scorecard lies in merging strategy with economic control
and the management of performance more broadly. Once the balanced scorecard is utilized as
the grounds for concepualizing and articulating a company’s strategy, there is a peril that
strategy is perceive piecemeal on the basis of specific economic, operating, and market
performance variables instead of on the basis of basic queries of organizational identity and
competitive positioning. For organizations that are mature in sectors that are stable, this may
not be too grave an issue. Hwever, for corporations facing change that is discontinuous,
competitors that are threat to their very existence, and technologies that are disruptive, the
balanced score card can end up obscuring instead of illuminating the basic strategic queries
the enterprise encounters.
People – based Strategy
Today, most business strategies incorporates some targets on human resource, perhaps
to do with staff members engagement scores, diversity or turnover. However, such limited

strategic development is likely to fall short of addressing the question on the way to design
the workforce in future. A company attains its growth targets via individuals, hence your
enterprise is a company’s ability to tap into individuals and make sure they grow. Leadership
that is future oriented is establishing their people strategy as a critical facet of their strategic
business planning procedure, no longer leaving the issue to be determined in isolation. These
corporations model their plans to meet the needs of their workforce, acknowledging that their
most critical competitive benefit is the ability to entice and retain the appropriate persons.
This novel era demands this modification because there is an entire array of
macroeconomic factors propelling the need to concentrate on people. We are in the midst of
the fourth industrial revolution, where evolving technologies and swift digitization are
merging with shifts in the demography, reduced entry barriers, evolving entrepreneurial
models and client expectations, all generating an ever-accelerating rate of change. With this
modification comes a decline in the time it takes an enterprise to fall or rise, and hence a need
for additional agile, productive, and high – performing workforce (Gratton, 2000).
Consequently, countries like the United Kingdom are encountering an unprecedented
crisis in talent from the linked effect of an aging populace, in – demand skills scarcity, and
the probability of migration that is restricted. This explains why 93% of corporations expect
the talent war to raise in the coming year. The perception that employees are an asset fails to
cut it anymore. Individuals, as a matter of fact, investors: they opt to invest their energy, time,
and talent with your corporation. You can no longer depend on chance or what you have
engaged in in the past, as this will not come any closer to enabling you access the workforce
required to make sure the business is a success (Gratton, 2000).
Nonetheless, when placing individuals at the core of a corporation’s strategic business
plan, the planning process should include a review that is co-ordinated on the way exterior

trends are influencing existing jobs, structures, and skills all over the enterprise and it ought
to consider the principle skills profiles required for future success. In turn, this ought to
establish an individual – centric work environ and leadership strategy that will assist your
enterprise to thrive (Gratton, 2000).
Consequently, to make sure that the individuals in the organization are capable of
executing the strategy, the leadership team should respond to the following queries:
1. Across you business’s value chains. How would modifications in business
frameworks and technological changes likely to influence jobs, work styles and
skills?
2. What is the gap betwixt present job types and present capabilities, and those of the
future? Which will appear or disappear? Which is get modified?
3. Which skills do individuals need that they lack today? What is the company’s plan for
reskilling and upskilling its employees?
4. What are the core and strategic roles of the business? Which are candidates for non-
traditional forms of work like automation?
However, from the surface it might appear that such a strategic development process and
execution would undermine the responsibility of the Chief Human Resources Officer but this
is not the case. For a while now, the HR has struggled to depict a substantial effect due to its
disjunction with the business. Facilitating such a critical process of decision making at the top
and taking up the responsibility of executing strategic priorities and bets will end up elevating
the HR’s role.
Overthrowing Orthodoxy
Hamel, on the other end, proposes an entirely distinct approach that has little patience
for performance management and not a lot of time for strategies that are people – based.

According to Hamel, the issues that established corporations are encountering are more
enormous and the stakes are greater. If the current business environment is in a revolution age
then strategy is a matter of survival. The approach proposed by Hamel dismisses the
performance management approach that strategy development is the easy part but
implementation is the complex. Further, he insists that simply developing a strategy based on
individuals (employees) or any other interior resources – is not enough to drive the success of
a business. He insists that a business strategy should be driven by the exterior challenge. In a
revolutionary environment, the status quo is bound for destruction and the only probability of
businesses surviving is creativity (Hamel, 2000).
Innovation, in this context does not primarily refer to strategic development on the
basis of technological innovation but rather businesses concentrating on the entrepreneurial
concept innovation. That is, innovation that has the ability to alter the very core of
competition in an industry. That is, coming up with creative strategies that other corporations
find it hard to imitate. The problem is, most of the cases used to depict corporations that have
adopted the creativity approach in their strategy development and execution are those of start-
up businesses. Hence, most critics are concerned whether the approach is feasible for
established, mature corporations to generate recurrent strategic creativity. In response, Hamel
asserts that businesses can develop a permanent revolution in the course of the corporation so
that prevailing mind-sets and strategies are continually getting refreshed, challenged, and
overturned by concepts that are novel and more promising (Hamel, 2000). The perturbation is
not simply that the innate conservatism and rigidity of large, developed companies is
inevitable: if novel start – ups and ventures are innately more efficient at coming up with
novel entrepreneurial concepts and reconfiguring resources for constructing novel
capabilities, then perhaps it would be wise for mature corporations to stick with primary

capabilities that are well – established and marketing positions in existence (Peters &
Waterman, 1982).
HP advanced from an electronic measuring devices manufacturer to a digital imaging
and computer company and Motorola, a former vehicle radio corporation is currently a
leading manufacturer in wireless telecom hardware and semiconductors. However, for most
other corporations, strategic creativity has triggered a near downfall like the case of Sears
Roebuck’s attempt to reinvent into a diversified monetary service corporation. Therefore,
although this strategic development and execution approach tends to overstate the market
incumbency fragility, it is modeled to inspire activism within a corporation (Hamel, 2000).
Discussion
The three strategic development and execution approaches depict a spectrum of
processes posited in the novel decade. Performance – based strategy offers the closest
connection with the 1990s core strategic management trend modelling performance
management systems that can merge together financial control, strategic planning, and
operations management (Kaplan & Norton, 2001). Consequently, the people – centered
approach to strategic development and execution is grounded on efficacy and ethics and calls
upon individuals to abandon their conceptualization of corporations as systems, mechanisms,
pools of assets, or vehicles for wealth creation for shareholders, and realize that corporations
are social entities that encompasses feeling, living, contemplating, creating individuals. The
overthrowing orthodoxy, calls upon the top management to consider creativity in their
strategy development. That is, coming up with innovative strategies that will keep them
relevant in the market.
Somewhere in betwixt, Markindes helps us remember that, whatever the nature of the
entrepreneurial environment, the formulation of strategies is about a solitary core issue –

developing a unique position that is defensible. If the rate of alteration of the entrepreneurial
environment is rising, Markinde posits that an organization should not get rid of the strategy
analysis tools but rather recognize that strategic creativity has become swifter, continuous,
and more radical (Markides, 2000).
Hence, the distinctions in the approaches depicted mirror the distinct perceptions held
by varied individuals on the nature of the current entrepreneurial environment. Exactly how
distinct the current is from the past is important in determining the extent to which top
management and strategy academicians need to restructure. If the entrepreneurial
environment is chaotic, the customary analytical tools may have reduced use in making sense
of what’s going on around us, let alone when it comes to making strategic decisions that are
sound. The creativity strategy proposal implies the need to evolve and replace convectional
optimization tactics and hierarchical, deterministic decision – making in favor of the looser
concepts of positioning “at the end of chaos”, establishing guiding models of rules that are
simple, and replacing instruction with self-organization. However, current events imply that
the future will not be completely distinct from the past; the Novel Economy has not precisely
eradicated the entrepreneurial cycle and Internet does not change all things. Hence, top
management may not have to adopt revolution. But they without a doubt need to model their
strategies to circumstances of intense competition and rapid change (Brown & Kathy, 1999).
How can my academic discipline, as a function within the organization, impact the
process of business strategy development and execution?
The strategic management discipline is perceived by many as a profession al, applied
field, whose purpose is not simply to define the phenomena of an organization but to predict
and alter them (Gopinath & Hoffman, 1995). The evidence that the strategic management
discipline possesses practical application arises from Jarzabkowski & Giulietti (2007) whose

survey bolsters up the argument that strategic management is an applied science and its tools
are utilized in business. Consequently, Benbasat and Zmud (2003) offer a series of
benchmarks that would help in assessing the role the discipline plays in the field of business
which include the discipline’s institutionalization as an integral facet of today’s economic and
organizational contexts.
The academic discipline has been institutionalized as a critical facet of the current
economic and business contexts
Strategic management is institutionalized as an important facet of today’s economic
and entrepreneurial contexts. The seminal work of Porter, Competitive strategy (1980) made
a significant contribution to the setting up the ground work for the field of strategic
management and has played as one of the most significant contributions. The generic
strategies proposed by Porter are still the most commonly identified and bolstered up in the
principal strategic management textbooks and in the literary writings. Moreover, strategic
management has largely influenced distinct fields like the hospitality sector, global public
health, and human resource management to list a few (Crook et al., 2006).
Strategic Management Perspectives
The discipline posits two scientific management perspectives on the approach that top
managers should utilize when it comes to strategy development and execution. A significant
number of scholars have favoured a scientific perspective, where strategic executives are
encouraged to systematically examine the external environment of the firm’s exterior environ
and examine the cons and pros of myriad options prior to strategy formulation. The
entrepreneurial environ is viewed as extensively analysable, objective, and largely
predictable. Therefore, strategic management ought to follow a systematic procedure of

competitive, environmental, and interior analysis and develop the strategy of the organization
on these parameters (Tse, 2010).
This perspective makes it a requirement for strategic managers to be highly skilled,
trained analytical thinkers with the ability to digest a myriad of objective information and
translating it into a direction desired for the corporation. Strategy scientists have a tendency
to reject or lower altogether the role of innovation and imagination in the strategy procedure
and are not generally receptive to options that arise from any procedure besides the
analytical, comprehensive approach. It is such approaches that help organizations avoid
falling into pitfalls of group think, anchors, and status quo (Tse, 2010).
The discipline also proposes an alternate perspective – artistic perspective on strategy
development and execution. The perspective is grounded on the absence of environmental
predictability and the swift pace of change manifest intricate strategy planning as suspect at
best. The perspective proposes that strategists should assimilate large doses of intuition and
creativity so as to design a strategy that is comprehensive for the organization. Henry
Mintzberg’s idea of craftsman – enveloping personal skill, perfection, and dedication via
mastery of detail – embodies the artistic approach. The strategy artist senses the corporations’
state, explicates its subtleties, and seeks to design its strategy the same way potter molds clay.
The artist visualizes the results linked with varied alternatives and ultimately develops a
course on the basis of holistic contemplation, imagination, and intuition. Strategy artists can
even perceive strategic planning exercises as time spent poorly and cannot be as likely as the
ones in the science school to make the action necessary to maximize the value of a formal
planning procedure (Tse, 2010).
Theoretical perspective proposed by the discipline and their Influence on strategic
Management

The strategic proposes theoretical perspectives that guide top managers on how to
model their administration and develop and execute strategies that will enable them effective
succeed in the entrepreneurial world. For instance:
IO (Industrial Organization). IO is a microeconomics branch that lays emphasis on
the impact of the industry environment upon the organization. The core IO theory tenet is the
idea that a company has to adapt to impacts in its industry to prosper and survive, therefore,
its economic performance is primarily determined by the industry’s success where it
competes. Industries that have favorable structures offer the greatest chance for the
profitability of the corporation. Ascribing to this perspective, it is of greater importance for a
company to choose the correct industry within which to compete as compared to determining
the way to compete within a predetermined industry. Current studies have bolstered up the
idea that industry factors have a tendency to play a role that is dominant in most corporations’
performance, except for the ones that are the ideal industry losers or leaders (Tse, 2010).
IO presumes that the performance of an organization and ultimate survival is
dependent on its power to adapt to the forces in the industry over which it has minimal or no
control. Based on IO, strategic managers would have to comprehend the nature of the
industry and come up with strategies that feed off the attributes of the industry since IO
concentrates on forces, industry, resources, strategies, and competencies are presumed to be
to some extent the same amid competitors within a particular industry. In case a corporation
deviates from the norm of the industry. The corporation implements a novel, successful
strategy; other corporations will rapidly mimic the higher – performing corporation by
buying the competencies, resources, or management skills that propelled the leading firm to
profitability. Therefore, although the IO perspective insists on the industry’s impact on

individual corporations, it is equally possible for corporations to impact their competitors’
strategies and in some instances even modify the industry’s structure (Tse, 2010).
Resource – based theory. It is the opposite of IO and perceives performance primarily
as a role of a corporation’s ability to make use of its resources. Although environmental
threats and opportunities are significant, a corporation’s unique resources encompass the
principle variable that permit it to develop a competence that is distinctive, making it possible
for the organization to distinguish itself from its competitors and develop competitive benefit.
Resources encompass all of the intangible and tangible assets of the firm, like equipment,
capital, knowledge, employees, and data. The resources of an organization are directly
associated to its capabilities, which can establish value and ultimately result to the
corporations profitability. Resource – based theory primarily concentrates on individual
corporations instead of the competitive environment (Tse, 2010).
The perspective argues that if an organization’s resources are to be utilized for
sustained competitive benefit – a corporation’s ability to enjoy strategic advantages over an
extended period – those resources would have to be rare, valuable, and not subject to
imitation that is perfect, and without substitutes that are strategically relevant. Valuable
resources are the ones that significantly contribute to the efficiency and effectiveness of the
firm. Rare resources, on the other end, are only possessed by a few rivals while imitable
resources are those that rivals cannot fully duplicate. Those resources that do not have
substitutes that are strategically relevant help the organization to operate in a way that cannot
be imitated efficiently by other people and hence maintain high performance (Tse, 2010).
Contingency theory. This perspective asserts that the most profitable organizations
have to develop advantageous fits with their environments. To put it in another way, a
strategy has a higher likelihood of being successful when it is consistent with the mission of

the organization, its competitive environ, and its resources. The theory depicts the middle
ground perspective that perceives organizational performance as the joint result of
environmental forces and the organization’s strategic actions. Corporations can end up
proactive by opting to operate in surroundings where threats and opportunities match the
weaknesses and strengths of the firm. If the industry’s environment were to change in a way
that is not favorable to the corporation, its top managers ought to consider leaving the
industry and moving its resources to other industries that are more favorable. Nonetheless,
the impact played by the discipline in organizational strategic development and execution has
been undermined by several critics (Tse, 2010).
Criticisms
Some scholars assert that academicians have fallen short of theory application to
practice (Baldridge, Floyd, & Markoczy, 2004). The principle criticisms being that the
academic society and its theories fail to keep pace with practice, the theories fall short of
shaping practice, and academicians are overly concerned with coming up with theories while
losing sight of its practical relevance (Jarzabkowski & Whittington, 2008). Baldridge et al.
(2004) went a step ahead to question if there was a possibility of mutual exclusivity betwixt
academic quality and practical relevance.
Despite these deficiencies, practitioners, and researchers have a relationship that is
symbiotic in that one group offers for the growth and advancement of the other. Scholars
examine entrepreneurial practices to come up with novel theories. The moment a theory is
abstracted from survey, it gets disseminated via journal articles, MBA courses, textbooks, and
consultants (Jarzabkowski & Whittington, 2008). The theory disseminated then affects
business executives who execute practices and, hence, the cycle goes on. Moreover, the
faculty of strategic management has trained an extensive number of degrees – seeking

learners and working professionals, hence having a core and significant impact on strategic
thinking and the management practice (Mahoney & McGahan, 2007). Therefore, the
discipline on strategic management has practical application in business strategy
development and execution. In spite of the academia theory fetish, the strategic management
theories model the entrepreneurial practices in an extensive range of organizational areas.
Conclusion
Business strategies describe the effectiveness by which an organization reaches its
objectives satisfying the needs of the client, for that great aspect of the responsibility is
dependent on how well administrators engage in their work. The perspectives and theories
proposed by the strategic management discipline are essential in providing top managers with
the skills and frameworks that they can use to analyze the business industry, maintain, and
ensure a company’s successful growth. Strategic management perspectives add value, find,
create, bolster up, and enable them to overcome its competitive position, depicting the actions
that they have to embrace to attain this position.
More importantly, there is no determined approach that can yield success for an
organization. Individuals perceive the business environment differently and for a company to
stay relevant, it is critical that they constantly adapt to the changing environment and design
their businesses appropriately to suit the needs of the organization. However, theoretical
frameworks play an integral role in business decision making and strategic development and
execution.
References
Adams, R., & Ferreira, D. (2010). Moderation in groups: Evidence from betting on ice break-
ups in Alaska. The review of Economic Studies, 882 - 913.

Ahmed, M. T., & Omotunde, H. (2012). Theories And Strategies of Good Decision Making.
Journal of Scientific & Technology Research, 51 - 54.
Andrews, K. (1971). The Corporate Strategy. Irwing.
Ansoff, H. (1965). Corporate strategy. New York: McGraw - Hill.
Baillon, A., Bleichrodt, H., Liu, L., & Wakker, P. (2016). Group decision rules and group
rationality under risk. Journal of Risk and Uncertainty, 99 - 116.
Baldridge, D., Floyd, S. W., & Markoczy, L. (2004). Are Managers from Mars and
academicians from Venus: Toward an understanding of the relationship between
academic quality and practical relevance. Strategic Management Journal, 1063 -
1074.
Bang, D., & Frith, C. (2017). Making Better Decisions in Groups. Royal Society for Open
Science, 170-193.
Benbasat, I., & Zmut, R. (2003). The identity crisis within the IS discipline: Defining and
communicating the discipline's core properties. MIS Quarterly, 183 - 194.
Brown, S., & Kathy, E. (1999). Competing on the Edge. Boston: Havard Business School
Press.
Chandler, A. (1962). Strategy and Structure: Chapters in History of the Industrial
Enterprises. Cambridge, Mass: The MIT Press.
Cooper, D., & Kagel, J. (2005). Are Two Heads Better Than One? Team Versus Individual
Play in Signalling Games. American Economic Review, 477-509.
Crook, T., Bratton, V., Street, V., & Ketchen, D. (2006). Has Strategic Management shed the
normal science straightjacket? Journal of Managerial Issues, 409 - 423.
Dyson, R., Bryant, J., & Morecroft, J. D. (2007). The Strategic Development Process.
Problem Structuring Methods.

Gastil, J. (2010). The Group in Society. Washington DC: Sage Publications.
Gershoni, N. (2019). Individual vs Group Decision-Making:Evidence from a Natural
Experiment in Arbitration Proceedings. Negrev.
Glaeser, E., & Sunstein, C. (2009). Extremism and social learning. Journal of Legal
Analysis , 263 - 324.
Gopinath, C., & Hoffman, R. (1995). The relevance of strategy research: Practitioner and
academic viewpoints. Journal of Management Studies, 575 - 594.
Gottlieb, M. (2009). Managing group process. New York: Greewood Publishing Group.
Gratton, L. (2000). Living Strategy: Putting People at the Heart of Corporate Purpose.
London: Financial Times/Prentice Hall.
Hamel, G. (2000). Leading the Revolution. Boston: Havard Business School Press.
Hart, P. (1991). Irving L. Janis' Victims of Groupthink. Political Psychology, 247 - 278.
Hinsz, V., & Nickell, G. (2004). Positive Reactions to Working in Groups in a Study of
Group and Individual Goal Decision-Making. Group Dynamics, 253 - 264.
Jarzabkowski, P., & Giulietti, M. (2007). Strategic management as an applied science, but not
as we (academics) know it. The Third Organization Studies Summer Workshop. Crete,
Greece.
Jarzabkowski, P., & Whittington, R. (2008). Directions for a troubled discipline. Journal of
Management Inquiry, 266 - 268.
Kaplan, R. S., & Norton, D. P. (1996). The Balanced Scorecard: Translating Strategy into
Action. Boston: Havard Business School Press.
Kaplan, R. S., & Norton, D. P. (2001). The Strategy - Focused Organization: How Balanced
Scorecard Companies Thrive in the New Business. Boston: Havard Business School
Press.

Kolin, P. (2009). Successful Writing at Work. New York: Cengage Learning.
Mahoney, J., & McGahan, A. (2007). The field of strategic management within the evolving
science of strategic organization. Strategic Organization, 79 - 99.
Markides, C. C. (2000). All the Right. Boston: Harvard Business School Press.
Miner, F. (1984). Group Versus Individual Decision Making: An Investigation of
Performance Measures, Decision Strategies, and Process Losses/Gains.
Organizational Behavior and Human Performance, 112 - 124.
Mukherjee, N., Dicks, L. V., Shackelford, G. E., Vira, B., & Sutherland, W. J. (2016).
Comparing groups versus individuals in decision making: a systematic review
protocol. Environmental Evidence, 1 - 9.
Peters, T., & Waterman, R. (1982). In Search of Excellence. New York: Harper & Row.
Porter, M. (1980). Competitive strategy. New York: Free Press.
Rothwell, D. (2012). In Mixed Company: Communicating in Small Groups. New york:
Cengage Learning.
Tse, E. (2010). The China Strategy: Harnessing the Power of the World's Fastest - Growing
Economy. Basic Books.

Decision Making and Strategy Development

Recommended

Recommended

More Related Content

Similar to Decision Making and Strategy Development

Similar to Decision Making and Strategy Development (20)

More from Writers Per Hour

More from Writers Per Hour (20)

Recently uploaded

Recently uploaded (20)

Decision Making and Strategy Development