Question

In: Operations Management

Explain how to determine whether a decision is strategic?

Explain how to determine whether a decision is strategic?

Solutions

Expert Solution

Let us first understand What are Strategic decisions?

Definition:

" Decisions which are taken with broader perspective of the business considering the long term goals and envisioning totally new business directions and processes which are confined to company's vision and mission statement"

Strategic decisions are quite different from tactical and operational decisions. Tactical decision making involves implementing existing operational processes and make continuous improvements in those processes. Whereas operational decisions are taken in accordance with strategic decisions by considering short term goals of the company. These are short term decisions of the company. But Strategic decisions are concerned with overall Counter planning of all Organization and its long term growth in the market. Hence these are long-term decisions.

Below are some of the characteristics Strategic Decision possesses which can determine if the decision is strategic or not:

1. Decisions taken with long term goals and for future planning are always strategic decisions.

2. An organized and well-structured process is used for decision making which can also be understood from amount of time and consideration management put while making decision.

3. Strategic decisions are confined to organizational mission and vision. Operational priorities are set by organization before making comprehensive decisions.

4. Organization involves experts and advisors for making decision because strategic decisions have very high importance as they deal with the future and involve a lot of risk.

5. Organizational resource capabilities with the threats and opportunities are harmonized by strategic decisions.

6. Strategic decisions are always measurable with ROI (return on investment) as it will help organization to make better decisions in the future.

These are the factors which gives competitive advantage for any company with proper decision making through long term strategy. Hence strategic decision making is very important for any organization to sustain in long term market.


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