Microfoundations of strategic decision effectiveness

Paper in proceeding, 2017

How do organizations make effective strategic decisions? In this study we build on research on the microfoundations of strategy and strategic decision-making to study the underpinnings of strategic decision effectiveness. We argue that the process-effectiveness link can be more fully understood if decision makers’ cognitive characteristics are incorporated. Such cognitive characteristics are expected to drive behavior in the strategic decision-making process. These account for variation in how information is collectively handled and political interests are accommodated. A field study was conducted in which we gathered multi-respondent survey and interview data on strategic decisions from 81 organizations. Our results suggest that there are actually two dimensions of strategic decision effectiveness, financial and process, each affected differentially by the microfoundations through the strategic decision-making process.