Executive Decision-Making: Action and Planning

Introduction

In every successful organization, decision-making requires proper control and attention from the management; executive action and planning are the essential parts of this process. Since executives generally consider serious issues, the consequences of their strategic decisions depend on the ability to find a comprehensive approach to the problem. The present paper focuses on the peculiarities of executive action and planning and aims to demonstrate them in contracting and acquisition decisions in particular.

Background

Specialists from the fields of business and management have always tried to identify what makes a good decision-maker and what strategy an executive should apply to ensure a company’s success. The article Behavioral Strategy and the Strategic Decision Architecture of the Firm by Sibony et al. (2017) focuses on the procedure of decision-making and the role of behavioral aspects. The researchers state that strategic decision-making is not limited to one person or activity, but the organization as a whole. Moreover, the process includes the evaluation of possible risks and biases that may become obstacles for an executive authority (Sibony et al., 2017). Therefore, the present research paper is based on the idea that decision-making requires integrated and comprehensive actions.

Literature Review

Action

Executive action is based on a variety of strategic processes. According to Sibony et al. (2017), they include long-range planning, short-range problem solving, and the consideration of board politics. Besides, executives often have to overcome external factors, such as political conflicts, cognitive biases, emotions, and social processes. Noticing opportunities is considered another essential element of strategic action. According to Shepherd et al. (2016), executive personnel needs to identify and use an appropriate opportunity in time. The researchers state that it is important to develop emerging ideas and use them for the benefit of the company. Another study by Parker and Corte (2017) emphasizes that strategic action is a product of collaboration. The researchers state that creative groups working in a strategic action field integrate emotional, cognitive, and material resources to support and develop their ideas (Parker & Corte, 2017). Indeed, even if only one executive worker is responsible for taking action, the process still requires the collaborative efforts of different specialists and the wise distribution of resources.

Planning

There are certain tools that an executive can use in strategic planning. Sibony et al. (2017) refer to them as levers of the decision-making process. The most important of them are connected with the evaluation of existing information, the collaboration of different parties, and ensuring proper communication between stakeholders (Sibony et al., 2017). Kachaner et al. (2016) confirm that it is important to evaluate strategy, motivate and engage participants, and make investments in execution and control over the process. Wu et al. (2017) emphasize that an executive should pay attention to risk assessment, which corresponds to the idea of Sibony et al. (2017) about assigning decision approvals to different people to eliminate risks. Finally, Bryson et al. (2017) mention that in strategic planning, it is important to clarify values and objectives, consider policies and regulations and rely on a theoretical basis. Therefore, planning depends on the ability of an executive to analyze the issue in a critical and comprehensive way.

Findings

The analysis of different studies on executive decision-making allows defining the major principles of this process. It would be appropriate to discuss them through the example of acquisition and contracting decisions. Sibony et al. (2017) state that in terms of the acquisition, the possible risks may be connected with the overconfidence and delusional optimism of an executive. In the market, it is essential to assess the existing competition objectively. Emotional biases may create obstacles for the critical evaluation of the issue. It is suggested to start the decision-making process with the questions if the acquisition is necessary and how to eliminate possible risks.

Since government contracting may include a variety of forms, different approaches should be considered in decision-making. According to Sibony et al. (2017), in terms of action, it is necessary to notice and use the valuable opportunity and consult with specially designed groups about the possible measures. In planning, the analysis of existing policies is also an important factor to consider. In both acquisition and contracting, sufficient attention should be paid to preliminary theoretical research of the issue, including the evaluation of existing resources and different external and internal obstacles.

Conclusion

Executive decision-making is a complicated process that requires attention to the company’s environment and the ability to react to emerging opportunities. Government contracting and acquisition are examples of actions that may significantly influence the company’s performance. Therefore, an executive needs to consider long-term and short-term consequences, communicate with creative groups or responsible specialists, and wisely distribute the company’s resources. If all risks are taken into account, proper planning and confident action are likely to contribute to the overall success of the organization.

References

Bryson, J.M., Edwards, L.H., & Van Slyke, D.M. (2017). Getting strategic about strategic planning research. Public Management Review, 20(3), 317-339.

Kachaner, N., King, K., & Stewart, S. (2016). Four best practices for strategic planning. Strategy & Leadership, 44(4), 26–31.

Parker, J.N., & Corte, U. (2017). Placing collaborative circles in strategic action fields: Explaining differences between highly creative groups. Sociological Theory, 35(4), 261–287.

Sibony, O., Lovallo, D., & Powell, T.C. (2017). Behavioral strategy and the strategic decision architecture of the firm. California Management Review, 59(3), 5–21.

Shepherd, D.A., Mcmullen, J.S., & Ocasio, W. (2016). Is that an opportunity? An attention model of top managers’ opportunity beliefs for strategic action. Strategic Management Journal, 38(3), 626–644.

Wu, T., Wu, Y., Tsai, H., & Li, Y. (2017). Top management teams’ characteristics and strategic decision-making: A mediation of risk perceptions and mental models. Sustainability, 9(12), 1-15.

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