1. Strategy: Analysis and Practice Slide 1 ©The McGraw-Hill Companies, 2005 13. Process analyses for strategic decision making

2. Strategy: Analysis and Practice Slide 2 ©The McGraw-Hill Companies, 2005 Outline ● Introduction ● Perspectives on strategic decision-making ● Making choices ● Game theory ● Sensitivity analysis ● Options

3. Strategy: Analysis and Practice Slide 3 ©The McGraw-Hill Companies, 2005 Outline (continued) ● Decision-making processes ● The architecture of strategic decision making ● Strategic decision-making and performance

4. Strategy: Analysis and Practice Slide 4 ©The McGraw-Hill Companies, 2005 Strategy as Process

5. Strategy: Analysis and Practice Slide 5 ©The McGraw-Hill Companies, 2005 The 5 P’s of Strategy ● Plan – consciously intended course of action ● Ploy – a set of actions to outwit competitors ● Pattern – the outcome of multiple decisions ● Position – relating the organization to its environment ● Perspective – how strategists in an organization see it in the world Mintzberg, Quinn & Ghoshal 1998

6. Strategy: Analysis and Practice Slide 6 ©The McGraw-Hill Companies, 2005 Planning and Forecasting Techniques

7. Strategy: Analysis and Practice Slide 7 ©The McGraw-Hill Companies, 2005 Example of Game Theory

8. Strategy: Analysis and Practice Slide 8 ©The McGraw-Hill Companies, 2005 Sensitivity Analysis A technique for investigating what happens if the assumptions underlying a strategic decision are changed.

9. Strategy: Analysis and Practice Slide 9 ©The McGraw-Hill Companies, 2005 Strategic Options

10. Strategy: Analysis and Practice Slide 10 ©The McGraw-Hill Companies, 2005 A Typology of Decision Processes

11. Strategy: Analysis and Practice Slide 11 ©The McGraw-Hill Companies, 2005 Wicked Problems ● Difficult to define precisely ● Understanding the problem is part of understanding the solution ● Rarely one best solution ● Each solution involves different trade-offs and priorities ● Difficult to assess in terms of performance ● Highly inter-connected with other problems ● Accompanied by high levels of uncertainty ● Involve high risk in decision-making ● Involve decisions that are difficult to reverse ● Often discontinuous and political

12. Strategy: Analysis and Practice Slide 12 ©The McGraw-Hill Companies, 2005 The Organizational Context ● Systems ● Structure ● Ownership and control ● Organizational culture

13. Strategy: Analysis and Practice Slide 13 ©The McGraw-Hill Companies, 2005 Artefacts and Assumptions in Strategic Decision-making

14. Strategy: Analysis and Practice Slide 14 ©The McGraw-Hill Companies, 2005 Factors of Success ● The knowledge base of managers – How familiar managers are with the problem – The ability to plan and to resource decisions ● The receptivity of the organizational context – How ready the organization is to adopt changes once decided – Involves organizational structure and culture

15. Strategy: Analysis and Practice Slide 15 ©The McGraw-Hill Companies, 2005 Concluding Remarks ● Decision-making is a complex activity involving: – The choices made – The decision-making process ● Key features of decision-making processes: – Knowledge – Planning – Resourcing – Specifying – Alignment of stakeholders, structure and culture