Strategic Decision Making

INTRODUCTION

Decision-making is the process of identifying and selecting a course of action to deal with a problem or to take advantage of an opportunity, and is an important part of the manager’s job. A problem, resulting whenever an actual state of affairs differs from a desired state of affairs, may also be seen as an opportunity to exceed stated objectives.

Four informal and intuitive situations usually alert managers to a problem’s existence:

Performance deviates from past experience;

Performance deviates from plan;

Other people express dissatisfaction;

The performance of competitors challenges an organisation.

Whether managers recognise a situation as a problem depends upon their threshold for problem recognition, which is determined by their understanding of goals, plans, and acceptable standards of performance, as well as by their personal values and backgrounds. Because managers sometimes focus too narrowly on their unit’s needs, upper-level managers must co-ordinate the actions of all managers.

No manager can solve every problem. Instead, managers must learn to set priorities in dealing which decision to handle and which ones they should delegate to subordinates or refer to superiors.

OPPORTUNITY FINDING

It is not always clear whether a situation faced by a manager presents a problem or an opportunity. Missed opportunities create problems for an organisation and opportunities are found while exploring problems. Gleitcher, a management consultant differentiates between a problem and an opportunity as follows:

A problem is something that endangers the organisation’s ability to reach its objectives, and an opportunity as something that offers the chance to exceed objectives.

The dialect inquiry method sometimes called The Devil’s Advocate Method is useful in problem-solving and opportunity finding. In this method, the decision maker determines possible solutions and the assumptions they are based on considers the opposite of all...