1. Strategic Thinking and Decision Making Dr. Fred Mugambi JKUAT

2.  What is strategic thinking?  Who should be doing the strategic thinking?  The link between strategic thinking and decision making  Decision making Process  Barriers to Decision making  Leveraging on stakeholders Key Questions 11/27/20152

3.  A decision is a choice made from available alternatives.  Decision making is therefore defined as the process of identifying and selecting a course of action to deal with a specific problem or take advantage of an opportunity.  Decision making is essential to determine the future direction of the firm. Introduction 11/27/20153

4.  Thinking for the future  Incorporating various competing factors/ variables in the thought process to affect positively future outcomes  Cognitive process where a manager critically analyses and considers many competing factors to determine future outcomes Strategic Thinking 11/27/20154

5.  Top managers are the foremost strategic thinkers in an organization  However, all managers are engaged and must be encouraged to think strategically for purposes of making strategic decisions  Information must be collected by all levels of management in order to fuel strategic decision making Who should be Engaged in Strategic Thinking? 11/27/20155

6.  Information gathering and analyses are important components of the strategic thinking process  Good decisions require proper analyses of information  High value decisions are therefore reliant on strategic thinking among the decision makers The link between strategic thinking and decision making 11/27/20156

7.  In a perfect world, managers would have all the information that they need to make good decisions.  In reality, however, some things are not known and this will affect the quality of the decision.  Factors such as uncertainty or risk will affect whether the decision made is good or not. Nature of Decision Making 11/27/20157

8.  Programmed Decisions  Decisions made on a routine basis.  Ordering of suppliers  Servicing of machines  Non-Programmed Decisions  Decisions that are difficult to make and are made very irregularly.  Complex decisions  Opening a factory oversea Types of Decisions 11/27/20158

9.  Decision making is therefore a complex yet important responsibility of managers.  To ensure that effective decisions are made, managers make use of the rational model of decision making.  This involves the following steps. Decision Making Process 11/27/20159

10. Stages in Decision making 11/27/201510

11.  Managers often face problems arriving at good decisions by themselves.  Many companies allow employees to participate in decision making.  Group decision making refers to the process of decision making where employees actively participate in the various stages of decision making Group Decision Making 11/27/201511

12.  More ideas/suggestions  Commitment and loyalty  Motivation improves  Communication and co-ordination Advantages of Group Decision Making 11/27/201512

13.  Time consuming and costly  Dominance by one member  Compromise of decision  Conflicts and disagreements Limitations of Group Decision Making 11/27/201513

14.  Cognitive blocks (e.g. lack of information and low intelligence levels)  Lack of incentives/ motivators  Non-supportive organizational cultures  Structured decision systems  Inadequate organizational research processes Barriers to Effective Decision Making 11/27/201514

15.  Identify the Stakeholders in your Decision Making Process  Use Stakeholder Mapping (where are they? What are their interests? How can they be useful?)  Develop Strategies to Maximise Stakeholder Support  Engage them The Role of Stakeholders in Decision Making 11/27/201515

16.  Analyse Environmental Influences using PPESTT Analysis  Analyse your Customers using the Customer Needs Assessment Grid  Analyse your Competitors using the 5 Forces Model  Analyse your Internal Capabilities  Summarise the Analysis in a SWOT Analysis  Identify and summarise Actions  Test Decisions for Strategic Fitness Strategic Analysis Tools that Aid Decision Making 11/27/201516

17. Thank you 11/27/201517