Strategic Decisions: Three Essential Characteristics

The magnitude and nature of strategies are profoundly impacted by the decisions made by managers. These choices are often made with limited information and few past experiences to draw from, making them highly uncertain and hard to reverse. Strategic decisions focus on the entire environment in which a company operates, including its resources, personnel, and the interface between them. They are long-term decisions that help an organization meet its long-term objectives by evaluating strategic alternatives.

Implementing the strategy requires a series of decisions, choices, and activities that are interrelated. Organizational effectiveness leads to strategic advantages, which in turn lead to long-term growth and development. Management decisions are routine decisions that facilitate strategic or operational decisions. Strategic decisions involve committing resources in ways that cannot be easily reversed; operational decisions can be reversed more easily.

Strategic decisions influence the entire organization and are made in an uncertain and ambiguous environment, while operational decisions specialize in production, human resources, marketing, and finance. A strategic decision is a process of selecting the best strategy for an organization to achieve a competitive advantage over the competition. The distinctions between strategic, administrative, and operational decisions can be summarized as follows: managers must accept ultimate responsibility for their organization's strategies and this task cannot be delegated to a subcontractor. You can learn to manage strategies through practice (exercising management) by making decisions, putting them into practice, and analyzing results.

As a result, the commitment and competence of senior management are essential for effective strategic decision-making.