How to make strategic decisions in the company?
Science, art or practice?
In the company we must seek an adequate combination of science, art and practice in making strategic decisions. We must promote in companies a greater field for experimentation, for trial and error.
All companies must make important decisions throughout their lives:
- what new products to develop?
- what businesses to diversify?
- is it opportune to invest in the purchase of another company?
- whether to integrate forward or backward in the value chain?
- what new geographic markets to address and how to do it?
- is it convenient to centralize or decentralize certain areas of management? etc.
There are people and management teams that base their strategic decisions on a deductive method, based on a diagnosis of the market and the situation of the company, a thorough design of what is going to be done, and then decide and implement. This method is widely used by large companies.
On the other hand, there are managers who make strategic decisions in a very intuitive way, where in view of different opportunities, they take action decisions quickly, relying on their “nose” for business.
Finally, there are managers whose decision processes follow a trial and error approach, in which they refine decisions as they learn from experience, and acquire skills and abilities that are very useful for later decisions.
What kind of executives will be most successful in their strategic decisions:
those who carry out thorough analyses,
those who let themselves be guided by intuition
or those who rely on practical experiences?
What is the essence of the strategy:
is it a science,
or a skill developed with practice?
What arguments should we pay more attention to:
or the visual?