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Strategic Decisions

Decision making is a managerial process of selecting the best course of action out of several alternative courses of actions available for the purpose of achieving organizational goals. Decisions may be operational, i.e., which relate to general day-to-day operations. They may also be strategic in nature. Decision making can be two type -Operational decision making and Strategic decision making

According to Jauch and Glueck “Strategic decisions encompass the definition of the business, products to be handled, markets to be served, functions to be performed and major policies needed for the organization to execute these decisions to achieve the strategic objectives (business  goal).”


 Dimension of Strategic Decision

1.            Top management involvement: Strategic decisions require top-management involvement: Strategic decisions involve thinking in totality of the organization. Hence, problem scaling for strategic decisions require to be considered by the top management.

2.            Resources commitment for organization growth: Strategic decisions involve commitment of organizational resources:

For example, strategic decisions to launch a new project by a firm require allocation of huge funds and as segments of a large number of employees.

3.            Prosperity- significant impact on the long-term prosperity of the firm: Strategic decisions are likely to have a significant impact on the long-term prosperity of the firm:

Generally, the results of strategic implementation are seen on a long-term basis and not immediately.

4.            Future Oriented-Strategic decisions are future oriented: Strategic thinking involves predicting the future environmental conditions and how to orient for the changed conditions.

5.            Multifunctional or multi business consequences-Strategic decisions usually have major multifunctional or multi-business consequences: As they involve organization in totality they affect different sections of the organization with varying degree.

6.            External Environment factors consideration: Strategic decisions necessitate consideration of factors in the firm’s external environment: Strategic focus in organization involves orienting its internal environment to the changes of external environment.

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