Factors in Strategic Decision Making

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Factors in Strategic Decision Making
Doreen Zelia, Member
What are the factors affecting strategic decision making?

4-7 External Factors in Strategic Decision Making
Bill Carter, Member
Strategic planning is the vehicle (process) used to change the direction/operation of an enterprise in order to achieve its goal(s).
We don't plan to remain the same. We plan because something, usually in the EXTERNAL ENVIRONMENT in which the enterprise operates, changes requiring the enterprise to adjust if it is to achieve its goal(s).
The primary factors in strategic decision making is to continually understand what is going on in the external environment (there are 4, some people say even 7 of those external factors needing to be monitored) and assessing the postitve and/or negative impact the external changes will have on the enterprise as it tries to achieve its goal(s).
Once that is understood, you then make adjustments / changes to the strategy and its operating components for achieving your enterprise goal(s).
What this says is that the strategic planning process and its continuous, iterative life cycle within an organization is far more more important than any one plan it produces.

Quality of Strategic Decisions
Bill Carter, Member
The #1 factor impacting the quality of strategic decisions is the depth of understanding an organization has about what is going on in the 'external environment' and determining how changing conditions that environment will impact the enterprise and the achievement of its goals.
This external assessment is a process that needs to be embedded in the operating structure, rhythm and mindfulness of the organization.
The external factors that should be monitored continuously are:
1. Markets/customers,
2. Sociodemographics
3. Competition
4. Technology
5. Economy
6. Government/politics
7. the factor of Production.
The quality of strategic decisions will come from how well the organization monitors these factors and assesses the impact a changing factor will have on the operation and how quickly it adjusts itself to the changing factor(s). Quality goes up if the monitoring, assessment and adjustments are constant, goes down if they are done casually or only after things don't seem to be 'going right.'.

The Internal Factors in Strategic Decisons
Dr Robin C Hesler
Don't forget the INTERNAL ASSESSMENT: culture, generation type, governance model are all factors. The mission must be the focus of any decisions along with the ethical implications. For good quality decisions one needs quality information and evidence.

Factors in Strategic Decision Making
Mellacheruvu Adi Saasthry , SIG Leader
Certainly the above mentioned internal and External factors affect the Strategic Decision Making; apart from these I would add few more:
When Strategy is being build, the strategist in a business environment need to ensure and these are affected:
1. Arenas
2. Economic Logic - The Economy of the Org
3. Vehicles - Channelize the business
4. Differentiating factors (uniqueness)
5. Staging - what are the various stages that we require to achieve our set goal
6. Formal structure of the Org
7. People
8. Critical tasks
9. Culture / Informal structure
10. Leadership
11. Goals
Another important factor is "ALIGNMENT" between these factors, and if we draw a matrix with these factors row-wise and column-wise we would get 55 combinations that would get affected and need to be considered for Strategic decision making.


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Mellacheruvu Adi Saasthry

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