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Strategic Decision
Success
(Harrison, Ch.11)
Strategic Decision Success
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Overview of chapter 11
• A profile of decision success
• Determinants of strategic decision success
• A model for strategic decision success
• A composite approach to the evaluation of
strategic decision success
• Summary
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The function of models
Ability to
Predict
An abstract thinking aid
that reveals or
illuminates some aspect
of system behavior in a
simple way or which
unlocks an insight.
Ability to Explain
Excellent
Poor
Excellent
Poor
Celestial
mechanics
Quantum
mechanics
Evolutionary
Economics
biology
The ability to draw
predictions from a
mathematical model.
Strategic Decision Success
Casti, J. (1990). Searching for Certainty.
New York: William Morrow and Co.
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A simple set of equations…
Success: A favorable termination of a venture
Decision Success = f (Quality, Implementation)
where…
Quality = f (compatibility, timeliness, information, DM influence)
Implementation = f (conflict avoidance, risk-reward, understanding)
Ref: Mintzberg, Raisinghani and Theoret (1976)
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An event-oriented worldview
Goals
Problem
Decision
Results
Situation
Assumptions
Strategic Decision Success
Sterman, J.D. (2000). Business Dynamics: Systems thinking
for a problematic world. Boston: Irwin-McGraw-Hill.
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Defining characteristics of systems
1. A system’s parts must all be present for the
system to carry out its purpose optimally.
2. A system’s parts must be arranged in a specific
way for the system to carry ouit its purpose.
3. Systems have specific purposes within larger
systems.
4. Systems maintain their stability through
fluctuations and adjustments.
5. Systems have feedback.
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Linkages and interdependencies
Organizations as systems
• Improved employee working conditions and training levels
may improve service quality to the point that marketing can
reposition service at a higher level.
• A commitment by marketing to fast product delivery creates
pressures on scheduling and production.
• A late raw materials shipment has cascading effects on
production and meeting customer orders, which increases
complaints to customer service and sales.
• A change in production design often affects the equipment as
well as costs of production, skill requirements and
advertising and distribution approaches.
• Timing of a sales promotion influences capacity utilization
and production costs, overtime scheduling as well as order
quantity and delivery arrangements with suppliers.
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A feedback-oriented worldview
Decisions
Side effects
Goals
Environment
Goals of
other agents
Actions of
others
Strategic Decision Success
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Sterman, J.D. (2000). Business Dynamics: Systems thinking
for a problematic world. Boston: Irwin-McGraw-Hill.
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Disappointments in carrying out
strategic change
 87%
expressed a sense of disappointment and
helplessness over the strategy work.
 59% felt that the problem lay in the execution
of the plan.
However, the firms continued with the
implementation work…
– No other methods work better.
– Management does not “dare” try anything new.
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Key issues in strategy implementation
• Understanding the consequences of
implementation.
• Employee attitudes.
• Are there sufficient resources to carry out the
strategy?
• Control routines and systems.
• Dedication on the part of the employees.
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A framework for managing strategic change
Types of
strategic change
Diagnosing
strategic change needs
Managing strategic
change processes
Structure
and control
Styles of
managing
change
Changing
routines
Change
tactics
Communicating
change
Symbolic
processes
Political
processes
Roles in the
change process
Source: Johnson and Scholes, 1997
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Force-field analysis
Forces acting
for change
Forces acting
against change
• Client-focused organization
and closeness to clients
• Job evaluation as “core”
• Flexible approach and
structure
• Complacency about change
• Individualism of consultants
• Lack of coordinated information
• Change is normal
• Inadequate induction processes
• Informality and networking
• Overly complicated structure
• Working hard
• Fun place to work
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• Too many meetings and memos
• Individual, not team, incentives
Equilibrium and controls
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Organizational resistance factors
•
•
•
•
Surprise
Human inertia
Misunderstandings, lack of knowledge
Emotional side effects
– Loss of established relationships and work
routines.
• Little trust in management
• Threats to security and status
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Organizational resistance to change
Source
Examples
• Rules
• Job descriptions, evaluations, incentives
• Limited focus
• Local changes
• Group resistance
• Group norms
• Loss of expertise • Relocation of key employees
• Changed power
relationships
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• Decentralization
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Personal resistance
Source
Examples
• Habits
• Changes in workload and type
• Financial factors
• Changed reward systems
• Lack of clarity
• Group isolation
• Social factors
• Group norms
• Security/fear
• New responsibilities, groupings,
reporting relationships
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Reducing resistance
Source
Examples
• Participation
• Cooperation on changes
• Support
• Channel for emotional problems
• Agreement
• Common development of goals
• Threats
• Relocation, layoff
• Training and
communication
• Open dialogue, information, training
programs
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Phases of change
•
•
•
•
•
•
•
•
•
Awakening
•
Awareness
•
Analysis
•
Re-evaluation •
Commitment •
Involvement •
“Workshops” •
Internalization •
Evaluation
•
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“Something is wrong!”
Discussions, engagement, orientation.
Collecting information.
“What shall we do?”
Organization is “sold” on the ideas.
Presentation to the organization, find owners.
Participation in group work.
Group, management development programs.
“Have we reached our goals? What’s next?”
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“Unfreezing” and managing change
ORGANIZATIONAL
SYMPTOMS
STAGES
Unfreezing
mechanisms


Rumors and signals
Questions and challenges

“Felt need” for change
Organizational
anticipation


Competing views of
causes of problems and
remedies
 Information collection
 Political “testing” of support


New ideas tested out
PRESSURES FOR
CONFORMITY
Early signals made
sense of within paradigm
Political pressures not
to “rock the boat”
Organizational
flux
Information
building

Experimentation

Information made
sense of within paradigm
Resistance to new ideas
Refreezing
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Factors in change management





Develop a holistic perspective - avoid
local optimization and global
sub-optimization.
Full and active support from top
management.
Stimulate everyone for active participation.
Create a culture for open communications.
Reward the participants.
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Critical Systems Heuristics boundary questions
Step 1: The “Is” mode
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Who is the actual client of the system’s design?
What is the actual purpose of the system’s design, as being measured not in terms of declared
intentions of the involved, but in terms of the actual consequences?
What, judged by the design’s consequences, is its built-in measure of success?
Who is the actual decision taker, that is, who can actually change the measure of success?
What conditions of successful planning and implementation of the system are really controlled
by the decision taker?
What conditions are not controlled by the decision taker, that is, what represents “environment”
to her?
Who is actually involved as planner?
Who is involved as “expert”, of what kind is his expertise, what role does he actually play?
Where do the involved see the guarantee that their planning will be successful? Can these
assumed guarantors secure the design’s success, or are they false guarantors?
Who among the involved witnesses represents the concerns of the affected? Who is or may be
affected without being involved?
Are the affected given an opportunity to emancipate themselves from the experts and to take
their fate into their own hands, or do the experts determine what is right for them, what quality of
life means for them, etc?
What worldview actually underlies the design of the system? Is it the worldview of (some of)
the involved or of (some of) the affected?
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Critical Systems Heuristics boundary questions
Step 2: The “Ought” mode
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Who ought to be the client (beneficiary) of the system to be designed or improved?
What ought to be the purpose of the system, that is, what goal states ought the system be able to
achieve so as to serve the client?
What ought to be the system’s measure of success (or improvement)?
Who ought to be the decision taker, that is, have the power to change the system’s measure of
improvement?
What components (resources and constraints) of the system ought to be controlled by the
decision taker?
What resources and conditions ought to be part of the system’s environment?
Who ought to be involved as designer of the system?
What kind of expertise ought to flow into the design of the system?
Who ought to be the guarantor of the system?
Who ought to belong to the witnesses representing the concerns of the citizens that will or might
be affected by the design of the system? That is to say, who among the affected ought to get
involved?
To what degree and in what way ought the affected be given the chance of emancipation from
the premises and promises of the involved?
Upon what worldviews of either the involved or the affected ought the system’s design be
based?
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