The Structuring Of The Strategic-Decision-Making Process

Abstract

The basic types of decision models presented in the previous chapter (rational, descriptive, political, and ambiguous models) relies on quantitative values (money, time, or probabilities) that are most suitable for structured and semi-structured decision problems. These basic models can be used as starting models to guide the structuring process of strategic decision problems. First, a systematic procedure for structuring the strategic decision making process is presented, using decision matrix and decision trees. The need for the sensitivity analysis is introduced, and will be illustrated with more detail in the next chapter. Some problems that must be considered in this structuring process are illustrated in form of hidden traps and paradoxes. The first step in the decision-making process is to formulate the problem. It is possible that an inadequate formulation of the problem leads to a result that reduces efficiency and efficacy, since an incorrect formulation can define a wrong problem.