STRATEGIC DECISION-MAKING THEORIES: A HISTORICAL REVIEW

Abstract

The concept of decision making is considered as one of the key topics in the field of strategic management and related fields. According previous theoretical considerations and discussions of the main contributors, there is no single routine/path used by managers in strategic decision-making. Mintzberg, Raisinghani and Théorêt define strategic decisions with regard to the decision-making level as a combination of entrepreneurial activities and efficient use of resources. The process of making strategic decisions is often described as unstructured, non-routine associated with uncertainty, defining it as a set of activities, which includes the collection of information, the development of alternatives and their evaluation, and ultimately the selection of the best alternative. It is clear, therefore, that it is difficult to talk about strategic decision-making exclusively in the context of a logical sequence of activities by division makers. This type of presentation of strategic decision-making, based on the idea of rational action by top management, as the strategic management executives, is also shown in numerous management text books. In their editorial in a special issue of the prestigious Strategic Management Journal, Cyert and Williams synthesized the conclusions of the special issue contributors. Analysing the cause-and-effect relationship between strategy, strategic decision-making and the organization, emphasis is put on the importance of organizational learning. In the conditions of creating an economy based on information and knowledge, a connection is created between information, organizational structure and strategic decision-making. In complex systems, such as companies, one of the key problems that occurs when making decisions is to find out where the decision comes from and how it is realized. Strategic decisions are most often a collection of some individual decisions in the organization or a consequence of informal conversations or actions that lead to collective action. The focus of this paper is an attempt to identified a key theoretical underpinning, through an overview of relevant theories and strategic management schools. In so doing, this paper will use the concept of strategic management schools, presented by Mintzberg, Ahlstrand and Lampel in their popular book Strategic Safari.