Dimension of Strategic decision05/03/2020
Following are the outstanding attributes of strategic decision:
(1) Strategic decision is major one which is fundamental in that it influences the entire or major part of the organisation.
(2) Strategic decision is one that contributes directly in the realisation of organisation. All other decisions are the off-springs of such a decision.
(3) Strategic decision is separating itself from day-to- operational decisions. It is strategic in the sense that it is innovative effective and has different approach in each area be it a production, personnel, finance and marketing.
(4) Strategic decision has in its kit wide range of alternatives to withstand the on sleights of environment which is ever changing. These alternatives provide vital differences in terms of the outcome and inputs needed.
(5) Strategic decision is found on trade-offs between the costs and the risks of innovating and the time vulnerability of competitors. Between the competing alternatives, the best one is chosen.
In a sense, what is strategic or non-strategic is a matter of individual’s independent interpretation. Though the distinction is not very fine, such classification provides management to achieve the benefits of delegation of authority in that routine, repetitive and day to day decisions can be passed on to the lower-level where it is a source of motivation and preparing the aspirants in the art of decision making.
As a result, strategic decisions can be taken with deep thought and logic of applying mental faculty of fertile imagination and sound judgment.
Strategic decision making, or strategic planning, describes the process of creating a company’s mission and objectives and choosing the course of action a company should pursue to achieve those goals. Strategic decisions are different in nature from all other decisions which are taken at various levels of the organization during their day-to-day working.
The major dimensions of strategic decisions are given below:
- Strategic issues require top-management decisions.
- Strategic issues involve the allocation of large amounts of company resources.
- Strategic issues are likely to have a significant impact on the long term prosperity of the firm.
- Strategic issues are future-oriented.
- Strategic issues usually have major multi-functional or multi-business consequences.
- Strategic issues necessitate consideration of factors in the firm’s external environment.
Strategic Management: Tasks
Strategic thinking provides the vision for Strategic Management; by providing an insight into the forces behind the new completion by helping us develop a sustainable competitive advantage based on our organization’s core competencies; creating in infrastructure for the review and redefinition of our strategic direction; and along us to recognize and capitalize on new developments and opportunities in the market. The vision and direction provided by strategic thinking has to be incorporated into the Strategic Management framework.
Strategic Management process can be described by a number of tasks to be undertaken by the organization. In the final analysis, the success of the Strategic Management process boils down to the ability of the organization to carry out these tasks effectively and efficiently.
- Evolve business goals, by formulating its future mission and vision in terms of the expectations of the stakeholders.
- Set objectives that are achievable in light of changing external factors that include regulation, competition, technology and customers.
- Evolve and develop a competitive strategy to achieve the mission.
- Create an effective organizational structure and arrange the resources to successfully carry out the strategy.
- Finally, evaluate the performance so that necessary corrective measures can be taken to keep it on track to achieve the vision.