Strategic Processes for Exemplary Corporate Decision-Making
August 13, 2021
Making decisions isn’t always easy; especially corporate decisions. Complex corporate decisions often involve challenging factors such as uncertainty, complexity, high-risk consequences, alternatives, and/or interpersonal issues. When faced with difficult corporate decisions involving one or more of these factors, it becomes increasingly important to use strategic decision making processes to ensure a successful outcome.
Below are 3 strategic processes for exemplary decision-making
1. A Systematic Approach for Making Decisions
This process brings both problem-solving and decision-making strategies together. Step by step, this strategic process addresses all of the critical elements needed for a successful outcome following your decision.
1. Create a constructive environment
2. Investigate the situation in detail
3. Generate good alternatives
4. Explore your options
5. Select the best solution
6. Evaluate your plan
7. Communicate your decision, and take action
2. OODA Loops
This process takes you through each step of the Decision Cycle. The OODA Loop outlines a four-point decision loop that supports quick, effective, and proactive decision making.
1. Observe: collect current information from as many sources as practically possible
2. Orient: analyze your information, and use it to update your current reality
3. Decide: determine a course of action
4. Act: follow through on your decision
You continue the cycle through the OODA Loop by
• Observing the results of your actions
• Seeing whether you’ve achieved the results you intended
• Reviewing and revising your initial decision
• And, moving to your next action
3. The Vroom-Yetton-Jago Decision Model
This process takes you through the steps of, “deciding how to decide.” The focus is to guide you in your overall approach to the decision-making process. When making an important decision, your style, and the amount of participation you get from your team, are affected by three main factors:
1. Decision Quality: the higher the quality if the decision needed, the more you should involve other people in the decision.
2. Subordinate Commitment: when teammates need to embrace the decision, you should increase participation levels.
3. Time Constraints: the more time you have, the more opportunity you have for including others, and as using the decision as an opportunity for team building.
Vroom-Jago distinguishes three styles of leadership, and five different processes of decision-making that you can consider using:
1. Style: Autocratic – you make the decision and inform others of it.
Processes: A – Using information you already have and making the decision on your own.
B – Asking team members for specific information and then making the decision. Here, you don’t necessarily have to tell the team members what the information is needed for.
2. Style: Consultative – you gather information from your team and other sources. Then, you make the decision on your own.
Processes: A – you inform team members of what you’re doing and ask for individual opinions. Yet, the group is not brought together for a discussion. You make the decision on your own.
B – You make the final decision, but you bring the team together as a group to discuss the situation, hear perspectives, and solicit suggestions.
3. Style: Collaborative – you and your team work together to make the final decision.
Process: the team make a decision together. Your role is mostly facilitative and you help the team come to a final decision that everyone agrees on.
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