Strategic Decision Making

Abstract

Strategy is about making decisions -- decisions such as which industry to enter, how to position the firm and its products, which resources to develop or to buy, who to hire, and which organizational structure to use. It is no surprise, then, that much research within the strategy field has studied how strategic decisions are made and how they can be improved. The literature addressing these two questions falls under the rubric of strategic decision making (SDM). This literature focuses on the processes leading to a decision (e.g., how different opinions are taken into account) rather than on the content of the decision (e.g., which strategy framework to use to devise the firm's positioning). This entry presents some of the fundamental concepts and tools studied in the field of SDM and ways in which they might be applied by managers.

Keywords: strategic decision making, decision making structure

JEL Classification: M10