Session 177

How to Make the Right Decisions During Uncertain Times?

Track C

Date: Tuesday, October 13, 2009

 

Time: 11:30 – 12:45

Paper

Room: Meeting Room 6


Session Chair:
Scott Rockart, University of North Carolina at Chapel Hill

Title: Coping with Uncertainty for Effective Strategic Decision Making: Capabilities for Petroleum Bidding in Emerging Economies

Authors

  • Sunil Sharma, Indian Institute of Management - Ahmedabad
  • Mukund Dixit, Indian Institute of Management-Ahmedabad
  • Amit Karna, Indian Institute of Management Ahmedabad

Abstract: This paper reports on an empirical study of strategic decision making under conditions of high uncertainty. The context of study is bidding decisions by petroleum exploration firms in an emerging economy setup characterized by an evolving regulatory regime, aggressive competition, and high incidence of outsourcing of knowledge activities. Extant literature on uncertainty identifies ‘response uncertainty’ as the major uncertainty faced by decision makers where immediate action is required by them. This paper contributes to the uncertainty literature by identifying eight types of ‘response uncertainty’ that influence organizational response. Corresponding to these eight uncertainties are three types of organizational capabilities that firms develop to address uncertainty. The fact that position capability seems to be most crucial to win bids has important implications for auction design.

Title: Patterns in Decision Making and Firm Performance

Authors

  • Scott Rockart, University of North Carolina at Chapel Hill
  • Shayne Gary, University of New South Wales
  • Elena Vidal, Baruch College

Abstract: A great deal of research has explored the origins of rules governing organizational decisions, but relatively little systematic evidence establishes a link from decision rules to firm performance. Developing and evaluating such evidence is a major opportunity for advancing the strategy field. We estimate key decision rules for a sample of several hundred German consumer magazines observed quarterly from 1972 to 2006. The large number of organizations in the data, and the long time span covered in the sample, allows us to identify subtle but significant differences in decision making patterns. We use a model of magazine operations to link our estimated decision rules, in conjunction with a variety of external factors, to magazine performance.

Title: Quasi-opportunism: A Process Model from UK CEOs in an Uncertain World

Authors

  • David Stiles, University of Canterbury
  • Denise Jarratt, Charles Sturt University

Abstract: Exactly fifty years ago, Charles Lindblom criticised rational-economic decision making for failing to address uncertain environments. Academics have long called for a new strategy paradigm in the light of fundamental structural transitions, but there is little empirical evidence of how practitioners have engaged in business activity as such events unfold. This paper summarizes our critical psychological discursive study of contemporary strategy process models articulated by 30 leading UK strategy practitioners across in 7 broad industry sectors. These are compared to classic rational-economic models and incremental alternatives developed since Lindblom. Our practitioners saw strategy involving hybrid forms in fuzzy, broad, flexible and adaptive processes constituting meaning, power and identity. Agility often meant moving quickly and discontinuously in search of major step-change opportunities involving innovation and creativity.

Title: Strategic Treasury Risk Management in Uncertain and Changing Environments

Authors

  • Mary-Anne Williams, University of Technology, Sydney
  • Steve Elliot, University of Sydney

Abstract: The current global financial crisis has exposed treasury risk management strategies utilised by firms and the inadequacy of the underlying motivations, understanding and governance of risk. Current models and measures of risk in the field of strategic management are not well equipped to explain and inform decision making under environmental uncertainty. In response, this paper seeks to support development of sounder organizational policies and richer models of risk. Understanding, managing and measuring risk are crucial aspects of strategic management since knowledge informing strategy is rarely accurate, certain, complete and current. In the domain of corporate treasury, this paper explores the current understanding of risk under dynamism, describes critical research gaps, and proposes a cognitive framework to assist strategic management of risk and to address gaps in current theory.

All Sessions in Track C...

Mon: 12:45 – 14:00
Session 173: Proactive Strategies to Manage an Uncertain World
Session 181: Sustaining Innovation
Mon: 15:45 – 17:00
Session 174: The Effect of Environmental Conditions on Organizational Reconfiguration
Session 183: Managing Collective Emotions under Strategic Uncertainty
Mon: 17:15 – 18:30
Session 175: The Influence of Uncertainty on Investment Behaviour of Firms
Session 185: New Forms and Governance Modes for Coping with Uncertainty
Tue: 10:00 – 11:15
Session 176: The Influence of External Uncertainty on Capability Development
Tue: 11:30 – 12:45
Session 177: How to Make the Right Decisions During Uncertain Times?
Tue: 14:30 – 15:45
Session 178: Does the Past Predict Future Exploratory or Exploitative Innovative Behaviour?
Wed: 10:00 – 11:15
Session 179: Environmental Dynamism and Firm Behavior
Session 182: Cognitive Processs under Uncertainty
Wed: 11:30 – 12:45
Session 180: The Dynamics of Top Management Team in Achieving Long Term Performance
Session 184: Value Creation Under Uncertainty


Strategic Management Society

Washington DC