How Strategic Decisions Are Made

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Wednesday, 7.47pm

Sheffield, U.K.

Control is the source of strategic power. – Noam Chomsky

Some decisions are strategic ones – the kind of decision where you don’t know what’s going to happen but it’s important you make the right choice.

Decisions like whether to go to university or straight into work, to let your kids choose what they study or encourage them to do a safe role, to stick it out at your job or start your own business. Strategic decisions are hard so it’s worth knowing what they look like [1] when they appear in front of you.

Strategic decisions have a high degree of uncertainty. You have to pick a road without knowing whether you’ll reach your destination or be lost on the way. You won’t know whether you’ve chosen wisely until you reach the end.

Strategic decisions have high stakes. The choice to stay at home and find a job with a local company rather than moving to the metropolis could mean the difference between being a CEO or staying in middle management.

Strategic decisions have long-term consequences. Money in the bank, health in your body, happiness in your heart – do you have them, are they compounding over time or are your balances declining or even negative?

Strategic decisions involve interconnected options. A decision may depend on another one which in turn depends on the first. Should you pick a school in one location or wait to see if your offer goes through in another? Do you quit and then look for a job or do you accept one and then leave the first? You may be unable to do anything until something resolves itself.

Strategic decisions involve resource allocation. You have to invest time and money into doing one thing or another or both or neither. Whatever decision you make there are opportunity costs – you will have to give up the chance to do something else.

Strategic decisions involve people who come together to talk about a situation and come to a negotiated agreement on the way to go forward. This is hard to do. Psychological and social constructivism is the idea that we create the culture we live in – finding meaning and creating things that reinforce and support the way things are done where we are.

Decisions we make on our own are difficult but not often strategic. Deciding your daily routine or what time you get up are important decisions – but they’re easy to make. You just need to have a chat with yourself and decide what you want to do. Strategic decisions involve other people and that’s where it gets complicated. You need to be able to work with others to get things done.

As the old proverb goes, if you want to go fast, go alone. If you want to go far, go together.

References

  1. Montibeller, G. and Franco, A. (2010). “Multi-criteria decision analysis for strategic decision making”, Handbook of multicriteria analysis.

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