23Strategic Decision-Making Processes The Role of

StrategicDecision-MakingProcesses:TheRoleofManagementandContextAuthor(s):VassilisM.Papadakis,SpyrosLioukas,DavidChambersSource:StrategicManagementJournal,Vol.19,No.2(Feb.,1998),pp.115-147Publishedby:JohnWiley&SonsStableURL::01/09/201021:40YouruseoftheJSTORarchiveindicatesyouracceptanceofJSTOR'sTermsandConditionsofUse,availableat://=jwiley.EachcopyofanypartofaJSTORtransmissionmustcontainthesamecopyrightnoticethatappearsonthescreenorprintedpageofsuchtransmission.JSTORisanot-for-profitservicethathelpsscholars,researchers,andstudentsdiscover,use,andbuilduponawiderangeofcontentinatrusteddigitalarchive.Weuseinformationtechnologyandtoolstoincreaseproductivityandfacilitatenewformsofscholarship.FormoreinformationaboutJSTOR,[e-mail]&SonsiscollaboratingwithJSTORtodigitize,preserveandextendaccesstoStrategicManagementJournal.(1998)STRATEGICDECISION-MAKINGPROCESSES:THEROLEOFMANAGEMENTANDCONTEXTVASSILISM.PAPADAKIS1*,SPYROSLIOUKAS2andDAVIDCHAMBERS1'LondonBusinessSchool,London,U.K.2AthensUniversityofEconomicsandBusiness,Athens,GreeceThispaperinvestigatestherelationshipbetweentheprocessofstrategicdecision-makingandmanagementandcontextualfactors.First,drawingonasampleofstrategicdecisions,itanalyzestheprocessthroughwhichtheyaretaken,intosevendimensions:comprehensiveness/rationality,financialreporting,ruleformalization,hierarchicaldecentrali-zation,lateralcommunication,politicization,problem-solvingdissension.Second,theseprocessdimensionsarerelatedto(I)decision-specificcharacteristics,bothperceivedcharacteristicsandobjectivetypologiesofstrategicdecisions,(2)topmanagementcharacteristics,and(3)contextualfactorsreferringtoexternalcorporateenvironmentandinternalfirmcharacteristics.Overall,theresultssupporttheviewthatstrategicdecisionprocessesareshapedbyamultiplicityoffactors,inallthesecategories.Butthemoststrikingfindingisthatdecision-specificcharacteristicsappeartohavethemostimportantinfluenceonthestrategicdecision-makingprocess,asdecisionswithdifferentdecision-specificcharacteristicsarehandledthroughdifferentprocesses.Theevidentdominanceofdecision-specificcharacteristicsovermanagementandcontextualfactorsenrichesthetraditional'externalcontrol'vs.'strategicchoice'debateintheareaofstrategicmanagement.Aninterpretationofresultsisattemptedandpolicyimplicationsarederived.?1998JohnWiley&Sons,Ltd.Strat.Mgmt.J.,Vol.19,115-147(1998)INTRODUCTIONStrategicdecision-makinghasemergedasoneofthemostactiveareasofcurrentmanagementresearch.Theareahasgreatlybenefitedfromsuchresearchtraditionsasbehavioraldecisiontheoryandtransactioncosteconomicsandhasrecentlygaineditsownmomentum(Schwenk,1995).However,despiteasubstantialbodyofliterature,itisstillwidelyrecognizedthatourknowledgeofstrategicdecision-makingprocessesislimitedandismostlybasedonnormativeordescriptivestudiesandonassumptionsmostofwhichremainuntested(e.g.,BatemanandZeit-Keywords:strategicdecision-making;rationality;politics;strategicdecisions;topmanagement*Correspondenceto:VassilisM.Papadakis,LondonBusinessSchool,SussexPlace,Regent'sPark,LondonNW14SA,U.K.CCC0143-2095/98/020115-33$17.50?1998JohnWiley&Sons,Ltd.haml,1989;Langley,1990;Pettigrew,1990;Rajagopalan,Rasheed,andDatta,1993;Rajago-palanetal.,1997;SchneiderandDeMeyer,1991).AsEisenhardtandZbarackiputit,despitethecrucialroleofstrategicdecisions,thestrategyprocessresearchhasnotdepartedsignificantlyfromastageofbeingbasedon'matureparadigmsandincompleteassumptions'(EisenhardtandZbaracki,1992:17).Inparticular,theneedhasbeenrecognizedforintegrativeresearchwhichexplicitlyconsiderstheimpactofcontextonstrategicprocesses(BatemanandZeithaml,1989;BrysonandBromiley,1993;Rajagopalanetal.,1993,1997;SchneiderandDeMeyer,1991;Schwenk,1995).Forinstance,Pettigrew(1990)askedwhetherthenatureofthedecisionproblemshapestheprocessmorethandoestheorganizationalcontextthroughwhichtheprocessproceeds.Inthesamevein,RajagopalanReceived1December1994Revised25July1995,24December1996Finalrevisionreceived5March1997K116V.M.Papadakis,S.LioukasandD.Chambersetal.(1997)suggestasoneoftheprioritiesoffutureresearchinstrategicdecision-makingtheexaminationoftheextenttowhichvariationsinstrategicdecision-makingprocesses(DMPs)areexplainedbyvariationsinorganizational,environ-mental,decision-specific,andmanagerialfactors.Thewiderliteratureonenvironmentaldeter-minismandtheroleofmanagementchoiceisrelevanthere.Strategicdecisions(SDs)areamongthemainmeansthroughwhichman-agementchoiceisactuallyeffected.Butempiricalresearchhasnotbeenextendedto