STRATEGIC DECISION MAKING

PRESENTED BY :
AMBRISH KUMAR CHAUDHARY – PGP/22/272
SUMIT KUMAR – PGP/22/273
MANISH NAYAK – PGP/22/274
 Introduction
A strategic decision is one that deals with the long-run future of an entire organization.

Strategic decision making, or strategic planning, describes the process of creating a company's mission and
objectives and deciding upon the courses of action a company should pursue to achieve those goals.

What makes a Rare Consequential Directive

Strategic Commit substantial Set precedents
decision strategic? decisions are resources and for lesser
unusual and demand a great decisions and
typically have deal of commitment future actions
no precedent from people at all throughout an
to follow levels organization
Modes of strategic decision making

Entrepreneurial Adaptive Planning Logical

incrementalism
• Strategy is made • Characterized by
by one powerful reactive solutions to • Includes both proac- • Can be viewed as
individual. existing problems tive search for new a synthesis of the
opportunities and planning, adaptive
• The major focus is • There is no proactive the reactive solution , and to a lesser
on opportunities search for new oppor of existing problems extent the entrepr-
tunities . eneurial mode
Steps in Decision Making Process
The planning in most of the situations (which includes the basic elements of the strategic management process) is more of rational
than intuitive, therefore resulting in a better and informed way of making strategic decisions. There are basically 8 steps that need
to be followed in strategic decision making process.
Step 1
Evaluate organization’s current
performance in terms of:
• Return on investment, profitability etc.
• Current mission, objectives, strategies
and polices
Step 3
Identification of threats and opportunities
after analysis of external environmental
conditions
• Positive environmental aspects are the
opportunities
• Negative factors of the environment are
threats for organizations
Step 2
Analysis of external environment affecting
the organization under strategies adopted
by management
• Successful strategies supporting the
environmental effects in a good manner
• Completed only when managers have
environmental information about trends,
norms and values going out there
Step 4
Assess the internal corporate environment
• Have a close look at core competencies
of the organization that are valuable
skills, resources and capabilities to
provide competitive advantages
• Realization of parameters affecting goals
in any way
Steps in Decision Making Process
Step 5 Step 6

Perform SWOT analysis Formulation of strategies for commercial,

• Strengths of organization are those
which control the resources in an
effective manner
• Weaknesses are the inverse activities of
strengths
business and practical levels of
organization
• Provides competitive advantage to the
organization
• Evaluate and select the best alternative
strategy

Step 7 Step 8

Implementation of strategies in practical Evaluate the results of implemented

shape strategies through:
• This is done through programs, budgets • Feedback systems
and procedures • Controlling the activities to ensure their
minimum deviation from plans
The Strategy Makers
In any organization Strategic decisions are taken at different levels which includes following:-

1. The Chief executive office (CEO)

2. The product managers (heads of various businesses)

3. The heads of functional areas such as :-

 Finance
 Marketing
 Procurement
 Production
 Human resource
RESPONSIBILITIES OF TOP MANAGEMENT IN
THE STRATEGIC PLANNING PROCESS

• They Shoulder broad • They develop the major

responsibilities for all the major portions of the strategic plan
elements of strategic planning and reviews, and evaluate and
and management counsel on all other portions.

• They develop environmenta

• They develop business plans
l analysis and forecasting. T
prepared by staff groups
hey also establish business
objective
Risk of Strategic Management
What are the risk involved ?
• The time that managers spend on the s
trategic management process may hav
e a negative impact on operational resp
onsibilities
• Managers must be trained to minimize t
hat impact by scheduling their duties to
allow the necessary time for strategic a
ctivities
• If the formulators of strategy are not inti
mately involved in its implementation, t
hen the plan may not work.
How to mitigate risk ?
• To minimize the effects of these risks
strategy managers must be trained to
anticipate and respond to the disapp
ointment of participating subordinates
over unattained goals and objectives
• Sensitizing managers to these possible
negative consequences and preparing
them with effective means of minimizi
ng such consequences will greatly enh
ance the potential of strategic planning
.
Thank you