Strategic decision making describes the process of creating a companyâ€™s mission or vision for the business and a set of goals the company wishes to achieve. It can also be described as the process of creating a companyâ€™s mission and objectives and deciding upon the courses of action a company should pursue to achieve these goals. Strategic flexibility is widely accepted as a prerequisite for a firmâ€™s success. The fundamental success of a strategy depends on three factors, a firmâ€™s alignment with the external environment, a realistic view of its core competencies and sustainable competitive advantages.
A good strategic plan would include metrics that translate vision and mission into specific end points. Strategic planning is ultimately about resource allocation and would not be relevant if resources were unlimited. The strategic decision making process includes the following steps a vision statement which is essentially a broad statement about the companyâ€™s values and purposes. The next step would be to implement a mission statement which would be followed by an analysis, strategy formulation and strategy implementation and management.
Strategic plans are not strategic unless they drive active choices about what one will do and wonâ€™t do. What determines the success of a plan is the clarity on the must achieve goals translated into a prioritized list of strategic planning initiatives that achieve the desired outcomes.
It informs oneâ€™s decision making which drives the route oneâ€™s company will take to achieve their goals. This is important because developing an actionable strategy can be both adaptive and robust to a competitor and market place dynamics and hence deliver results.
A business performance is fundamentally linked to its ability to make the right decisions whether it relates to the developing of new products, entering and existing markets. Strategic decision making is an art and a science and the act of deciding itself. Every decision one makes are supported by assumptions about facts and competitive as well as customer reactions. Strategic decisions need to be guided by a theory that allows one to act before all the facts are in. Some important pre requisites for decision making to be truly effective is the availability of relevant and granular information.
Organizations need insight to help them understand not only their current and future customer value drivers but also their decision making process. The capability of taking the most effective decisions is important for the progress and success of any organization.
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This article explains as to why strategic decision making plays such an integral role in the growth of businesses.