QUESTION – What are the two most important current trends/issues discussed in the current scholarly literature regarding strategic decision-making? Why are these important to organizational leaders? How should organizational leaders respond to these trends/issues? Support your view.
What are the two most important current trends/issues discussed in the current scholarly literature regarding strategic decision-making?
STUDENT 1- One significant emerging trend is the increasing emphasis on data-driven decision-making (Korherr et al., 2022). With advancements in technology and data analytics, organizations can now access information that can inform strategic decisions (Korherr et al., 2022). Korherr et al. (2022) are scholars who argue that data-driven decision-making enables organizations to make more informed choices, reduce uncertainty, and increase their chances of success. Data-driven decision-making is crucial because it allows leaders to base their choices on evidence rather than intuition or personal biases (Korherr et al., 2022). Leaders can comprehensively understand market trends, customer preferences, and internal performance indicators (Korherr et al., 2022). Data-driven decision-making involves analyzing relevant data to identify patterns, trends, and insights that can inform and guide decision-making processes (Korherr et al., 2022). By relying on objective data rather than personal opinions or biases, leaders can make more informed and rational decisions based on evidence rather than intuition (Korherr et al., 2022). The analytical approach of data-driven decision-making minimizes the risk of making hasty or ill-informed decisions and enables leaders to identify opportunities for growth and innovation.
Another crucial issue discussed in contemporary scholarly literature is the role of cognitive biases in strategic decision-making (Berthet, 2022). Despite advancements in rationality models, it is widely recognized that individuals are prone to biases that can influence their judgment and decision-making processes (Berthet, 2022). Understanding these biases is essential, as they can lead to flawed strategies and missed opportunities (Berthet, 2022). However, even with access to accurate data, organizational leaders must also be aware of cognitive biases that can cloud their judgment (Berthet, 2022). Cognitive biases are inherent mental shortcuts that influence leadership’s decision-making processes. These biases can lead leaders to make irrational judgments or overlook critical information (Berthet, 2022). By understanding these biases and actively mitigating their impact, leaders can make more objective decisions aligned with the organization’s goals (Berthet, 2022).
Furthermore, recognizing the role of cognitive biases in strategic decision-making is essential for effective leadership as it promotes diversity of thought within the organization (Berthet, 2022). Encouraging different perspectives and challenging ingrained biases fosters a culture of innovation where new ideas can flourish (Berthet, 2022). This could involve promoting an open-minded culture where different perspectives are encouraged and actively seeking out alternative viewpoints when evaluating options (Berthet, 2022). Leaders should also consider involving diverse teams in the decision-making process, as this diversity can help counteract individual biases by bringing different experiences and perspectives into play (Berthet, 2022).
Organizational leaders must adopt a balanced approach to effectively respond to data-driven decision-making and cognitive biases. Leaders should prioritize gathering relevant data from reliable sources and utilizing analytical tools to interpret this information accurately. Prioritizing collecting relevant data from reliable sources and using analytical tools will enable leaders to make well-informed decisions based on objective evidence.
Berthet, V. (2022). The impact of cognitive biases on professionals’ decision-making: A review of four occupational areas. Frontiers in Psychology, 12. https://doi.org/10.3389/fpsyg.2021.802439
STUDENT 2. The law is one current issue that organizations must consider when making decisions concerning their organization. Following governmental laws sets standards and boundaries that establish the frameworks, the organization’s policies and procedures will align (Agyekum et al., 2021). This does not mean that organizations will follow the government’s standards unless the regulations are enforced. Organizational leaders who can navigate the rules set by government agencies are doing what is best for the organization and the consumers. When laws change, it can turn a whole industry upside down, such as when California passed the state-wide plastic bag law, where consumers now must pay ten cents for every plastic bag. The grocery industry was prepared by selling a thicker quality the very next day after the voters passed the proposition (the election was held during our primary in June of 2018, yet the law did not take effect until January 1st of 2019) yet when customers did not want to pay the ten cents, they got the previous bags they use to give away. Other laws passed that flip industries on their heads, like the legalization of marijuana, went from an illegal substance to something legal a recreational in certain states. The law affects other trends, such as technology.
Technology is constantly advancing and thus changing, so much so that politicians cannot keep up with technology and how to keep laws caught up at the same pace as technology. Technology that is constantly changing needs government oversight to ensure organizational transparency and processes are efficient and effective (Sofyani et al., 2020); that will allow regulatory systems to work and encourage good business practices. Technology is constantly changing and advancing, and laws need to move at the same pace.
Agyekum, E. B., Amjad, F., Mohsin, M., & Ansah, M. N. S. (2020). A bird’s eye view of Ghana’s renewable energy sector environment: A multi-criteria decision-making approach. Utilities Policy, 70, 1–17. https://doi.org/10.1016/j.jup.2021.101219
STUDENT THREE- The first important trend discussed regarding strategic decision-making is integrating technology into an organization’s operations. Specifically, into supermarkets that will eliminate human cashiers and the intelligent shopping cart. This technology will fundamentally change how businesses operate and allegedly deliver value. This issue impacts traditional business models and creates new opportunities to enhance efficiency, improve customer experiences, and introduce innovative products and services. Organizations that adapt to these technological changes can gain a competitive edge in the market. Leaders need to stay informed about emerging technologies and their potential impact on their industry (Zhang, et al., 2022). Strategic decisions should involve assessing the organization’s current capabilities and identifying areas where technology can drive improvements.
The second is the issue surrounding business activities’ environmental and social impacts. These issues include climate change, energy conversation, sustainability, and social equity are becoming hot topics of strategic decision-making discussions. Organizations are being forced to pick a side and establish some form of responsible and ethical behavior. All stakeholders are placing greater importance on environmental and social responsibility. Failing to address these concerns can lead to negative publicity to the organization’s reputation and even legal issues. Adopting some form of sustainable practices can initiate innovation and open up new business opportunities (Vedad & Sohrabi, 2022). Leaders should integrate environmental and social considerations into their decision-making processes. This might involve setting clear goals and ensuring ethical behavior throughout the organization.
Vedad, N., & Sohrabi, T. (2022). Identifying and prioritizing factors affecting sustainable social responsibility in a private mobile operator using multi-criteria decision-making techniques. Technical Journal / Tehnicki Glasnik, 16(1), 1–7. https://doi-org.lopes.idm.oclc.org/10.31803/tg-20200919221535