Characteristics of Strategic Decisions

Strategic decisions take care of the long-run future of the entire organization. Strategic decision making is the central function of a top-level executive. Implementation of strategy involves a number of interrelated decisions, choices, and a broad range of activities. It requires the commitment and co-operation of all units, levels and members.

What are the Characteristics of Strategic Decisions in an Organization?

• Long-term direction of the business is a crucial part of strategic decisions. Strategic decisions usually emerge from the perspective views about the organization and society, including regulatory environment, prospects of different business, industry structure, competitive environment, etc.
• Strategic decisions have major resource propositions for a business. These decisions could be focused on possessing new resources, organizing others or reallocating others.
• The decisions are influenced by the value system, which includes business ethics and philosophy.
• The long run direction and value orientation influence the definition of the scope of the activities of the business. The business/businesses this company should be in is key decision in strategic management. The issue of scope of activity is prime to strategic decisions as it concerns the way in which those responsible for managing the organisation conceive its boundaries.
• Strategy is the means to achieve the end, i.e., the mission and goals.
• They are long term in general and related to the scope of the business of the organization may mean major resource commitments, including reallocation of present resources.
• They involve a change of major type because a company operates in ever-changing environment.
• Strategic decisions attempt to develop a sustainable organization environment fit. The quintessence of strategic management is the efficient use of organizational resources or strengths to take advantage of the environmental opportunities and to combat the environmental threats.
• Strategic decisions focus on achieving a sustainable competitive edge of the firm.
• Strategic decisions are likely to affect operational and administrative decision.
• Strategic decisions are complex in nature because they encompasses mission, long-term direction, scope of the organization, and establishment of organization environment fit.
• Due to the long-term future perspective of the strategic decisions, they might involve significant uncertainty as future can hardly be forecasted exactly.
• A strategy is usually comprehensive and highly integrated.
• Strategic decisions aren’t the same as administrative and operational decisions. Administrative decisions are routine decisions that assist or rather facilitate strategic decisions or operational decisions. Operational decisions are technical decisions which help execution of strategic decisions. To cut back cost is a strategic decision which can be attained through operational decision of decreasing the number of employees and how we carry out these reductions is going to be administrative decision.

In the above text we have discussed the key characteristics of strategic decisions in management.

Strategic decisions are the decisions which are focused on whole environment in which the company functions, the entire resources and the individuals who form the business and the interface between the two. Strategic decisions are complex in nature.