Inertia and creeping rationality in strategic decision processes

Article Abstract:

In two earlier studies, comprehensiveness, a characteristic of rational strategic decision-making processes, exhibited a positive relationship with organizational performance in a stable environment and a negative relationship with performance in an unstable environment. This research, a longitudinal extension of those studies, indicated that comprehensiveness exhibited considerable inertia, with only modest changes occurring since the original studies. Nevertheless, changes in organizational size and executive-team tenure, and the level of team continuity, were associated with changes in comprehensiveness; evolutionary increases in those variables were linked to a phenomenon we termed creeping rationality. In addition, the relationships that had been established between comprehensiveness and performance held for the years after the original studies. An exploratory analysis revealed significant across-industry differences in comprehensiveness. (Reprinted by permission of the publisher.)

Organizational behavior

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The aftermath of organizational decline: a longitudinal study of the strategic and managerial characteristics of declining firms

Article Abstract:

This study looks at the strategic and managerial consequences of organizational decline. Comparisons were made among 49 firms filing for bankruptcy and between those firms and a matched sample of nondeclining, surviving firms for the five years prior to the bankruptcy filing. Four findings emerged: The existence of different patterns of decline was confirmed. Those patterns were related to the timing of the consequences of decline. The consequences of decline included managerial imbalances, actions concerned with efficiency, centralization effects, and strategic paralysis, all reflecting threat-rigidity responses. Finally, despite the adverse effects of organizational decline, bankruptcy may be delayed or even avoided in an environment of growing demand. (Reprinted by permission of the publisher.)

Organizational change, Bankruptcy

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Does decision process matter? A study of strategic decision-making effectiveness

Article Abstract:

This study examined whether strategic decision-making processes are related to decision effectiveness, using a longitudinal field study design. We studied 52 decisions in 24 companies to determine if procedural rationality and political behavior influence decision success, controlling for the favorability of the environment and decision implementation. Our results indicate that decision-making processes are indeed related to decision success. Results are discussed in terms of the importance of strategic choice in organizations. (Reprinted by permission of the publisher.)

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