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Strategic Decision Making And Strategic

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Strategic Decision Making And Strategic
STRATEGIC CHOICE AND
STRATEGIC DECISION MAKING
Andy Adcroft

STRUCTURE
• Why do things happen?
• Generic Strategies
• Criticisms of generic strategies

WHY DO THINGS HAPPEN?
Norms and what has happened before Environment
Analysis

Roles and wider functions Creation of options Organisational
Analysis
What we want to achieve
Emotions, power desires, goals

Age and frequency of behaviours

What I want from this job

Habits, rituals and routines

Social factors

Decisions are taken and implemented

WHY DO THINGS HAPPEN?
• Explaining the behaviour of individuals and firms is a complicated thing
• Different schools of strategy will have different explanations for strategic behaviour
• In the messy real world, there will usually be an element of truth in each different explanation WHY DO THINGS HAPPEN?
• Explaining the behaviour of individuals and firms is a complicated thing
• Different schools of strategy will have different explanations for strategic behaviour
• In the messy real world, there will usually be an element of truth in each different explanation • It’s always easier to explain things after they have happened

HOW DO FIRMS MAKE STRATEGIC
DECISIONS?
Porter argues that, following on from analysis, the second step in the strategy process is strategic choice. He argues that strategists in organisations have 2 decisions to take:
(1) Competitive Scope ie in which markets will the company compete (products or geography)
• Broad
• Narrow
(2) Competitive Advantage ie how will the company compete in its’ chosen market
• Price
• Non-Price Characteristics

GENERIC CORPORATE
STRATEGIES
COMPETITIVE SCOPE

COMPETITIVE ADVANTAGE
Lower
Cost

Broad
Target

Narrow
Target

Cost
Leadership

Cost
Focus

Differentiation

Differentiation

Differentiation
Focus

PROBLEMS WITH PORTER’S
APPROACH
Criticisms of this approach to strategic choice can be made from each of the different schools of strategic thought:
• The Classical School
Porter argues that the choice is clear
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