Strategic Leadership and Decision Making in Family Businesses

Abstract

One of the critical requirements for effective leadership is sound decision making. This is especially true as managers soar ever higher into the ranks of middle and upper management. Typically, as this progression occurs, leaders become more focused on strategic decisions.

Strategic decision making is the process of selecting alternatives among the existing situation to make decision that have long term implication for the organization performance. Good decision making, will increase the overall organizational health and effectiveness. Organizations are shaped by the stream of strategic decisions its managers make over time and by how they make those decisions.

Garvin and Roberto wrote the article, "What You Don't Know About Decision Making," which was published in the Harvard Business Review in September 2001. They state, "Decision making is arguably the most important job of the senior executive and one of the easiest to get wrong."

Leaders usually perform decision making functions involving varying degrees of volatility, complexity, uncertainty, and ambiguity. Some of these decisions use explicit, systematic procedures designed to ensure that relevant variables are included, while other decision making procedures are largely intuitive and perhaps even "off the top of the head." The estimate of the situation and mission area analysis are two widely used procedures for systematic decision making. At the strategic level, something else is needed. As problems get more complex, multiple perspectives and more elaborate framew•orks are required to accommodate the multidisciplinary and often inter-related decision inputs.

In a dynamic and uncertain environment, strategic decision making is important because it can provide managers with a systematic and comprehensive means for taking into account the external environment, focusing on an organization•s strength, minimizing weaknesses, and identifying opportunities in which an organization can have a competitive advantage. However, the decision may still fail if it is not implemented properly.

Implementation causes the chosen course of action to be carried out within the organization. It is that moment in the total decision-making process when the choice is transformed from an abstraction into an operational activity.

Implementation of a strategic decision includes conveying the decision to those affected and getting their commitment to it. It is an integral component of successful decision making and attaining managerial objectives.