Strategic Decisions: Theoretical Foundations of Organizational Decision-Making

  • Ilaria Galavotti


This chapter provides an overview of strategic decision-making and examines those perspectives that have laid the foundations for the development of our understanding of organizational decision-making processes and the role of the human agent. The excursus along the evolutionary path of thinking on the topic of organizational decision-making converges in the examination of the conceptual evolution of the decision-making actor and of its rationality. Subsequently, the focus moves to the procedural dimension of strategic decision-making, where the strategic decision-making process is disentangled into its constituent phases and their relevant supporting routines. Finally, this chapter recalls the symbolic function of the information system and introduces the role of experience and learning processes as an intervening force that has challenged the existence of a clear and direct link between information and decisions.


Organizational Decision-making routinesRoutines intuitionIntuition Unprogrammed Decision Functionalist Social Theory 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Aldrich, Howard E., and Jeffrey Pfeffer. 1976. Environments of Organizations. Annual Review of Sociology 2: 79–105.CrossRefGoogle Scholar
  2. Anderson, Carl R., and Frank T. Paine. 1975. Managerial Perceptions and Strategic Behavior. Academy of Management Journal 18: 811–823.Google Scholar
  3. Andrews, Kenneth R. 1980. The Concept of Corporate Strategy. Richard D. Irwin.Google Scholar
  4. Bonazzi, Giuseppe. 2002. Storia del pensiero organizzativo – La questione organizzativa. Vol. 3. Milano: Franco Angeli.Google Scholar
  5. Bourgeois, Leonard Jay, III. 1980. Strategy and Environment: A Conceptual Integration. Academy of Management Review 5: 25–39.CrossRefGoogle Scholar
  6. ———. 1984. Strategic Management and Determinism. Academy of Management Review 9: 586–596.CrossRefGoogle Scholar
  7. Burgelman, Robert A. 1983. A Model of the Interaction of Strategic Behavior, Corporate Context, and the Concept of Strategy. Academy of Management Review 8: 61–70.CrossRefGoogle Scholar
  8. Chandler, Alfred. 1962. Strategy and Structure: Chapters in the History of the Industrial Enterprise. Cambridge: M.I.T. Press.Google Scholar
  9. Child, John. 1972. Organizational Structure, Environment and Performance: The Role of Strategic Choice. Sociology 6: 1–22.CrossRefGoogle Scholar
  10. Coase, Ronald H. 1937. The Nature of the Firm. Economica 4: 386–405.CrossRefGoogle Scholar
  11. Cohen, Michael D., James G. March, and Johan P. Olsen. 1972. A Garbage Can Model of Organizational Choice. Administrative Science Quarterly 17: 1–25.CrossRefGoogle Scholar
  12. Cyert, Richard M., and James G. March. 1963. A Behavioral Theory of the Firm. Englewood Cliffs, NJ: Prentice-Hall Inc.Google Scholar
  13. DiMaggio, Paul, and Walter W. Powell. 1983. The Iron Cage Revisited: Collective Rationality and Institutional Isomorphism in Organizational Fields. American Sociological Review 48: 147–160.CrossRefGoogle Scholar
  14. Downey, H. Kirk, and John W. Slocum. 1975. Uncertainty: Measures, Research, and Sources of Variation. Academy of Management Journal 18: 562–578.Google Scholar
  15. Duncan, Robert B. 1972. Characteristics of Organizational Environments and Perceived Environmental Uncertainty. Administrative Science Quarterly 17: 313–327.CrossRefGoogle Scholar
  16. Edwards, Ward. 1954. The Theory of Decision Making. Psychological Bulletin 51: 380–417.CrossRefGoogle Scholar
  17. Eisenhardt, Kathleen M., and Mark J. Zbaracki. 1992. Strategic Decision Making. Strategic Management Journal 13: 17–37.CrossRefGoogle Scholar
  18. Emery, Fred E., and Eric Trist. 1965. The Causal Texture of Organizational Environments. Human Relations 18: 21–32.CrossRefGoogle Scholar
  19. Farjoun, Moshe, and Linda Lai. 1997. Similarity Judgments in Strategy Formulation: Role, Process and Implications. Strategic Management Journal 18: 255–273.CrossRefGoogle Scholar
  20. Feldman, Martha S., and James G. March. 1981. Information in Organizations as Signal and Symbol. Administrative Science Quarterly 26: 171–186.CrossRefGoogle Scholar
  21. Fredrickson, James W. 1985. Effects of Decision Motive and Organizational Performance Level on Strategic Decision Processes. Academy of Management Journal 28: 821–843.Google Scholar
  22. Fredrickson, James W., and Anthony L. Iaquinto. 1989. Inertia and Creeping Rationality in Strategic Decision Processes. Academy of Management Journal 32: 516–542.Google Scholar
  23. Gergen, Kenneth J. 1985. The Social Constructionist Movement in Modern Psychology. American Psychologist 40: 266–275.CrossRefGoogle Scholar
  24. Greve, Henrich R. 2003. Organizational Learning from Performance Feedback: A Behavioral Perspective on Innovation and Change. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  25. Hannan, Michael T., and John Freeman. 1977. The Population Ecology of Organizations. American Journal of Sociology 82: 929–964.CrossRefGoogle Scholar
  26. Harung, Harald S. 1993. More Effective Decisions through Synergy of Objective and Subjective Approaches. Management Decision 31: 38–45.CrossRefGoogle Scholar
  27. Hofer, Charles W. 1975. Toward a Contingency Theory of Business Strategy. Academy of Management Journal 18: 784–810.CrossRefGoogle Scholar
  28. Jones, Gareth R., and Charles W.L. Hill. 1988. Transaction Cost Analysis of Strategy-Structure Choice. Strategic Management Journal 9: 159–172.CrossRefGoogle Scholar
  29. Khandwalla, Pradip N. 1972. Environment and Its Impact on the Organization. International Studies of Management and Organizations 2: 297–313.CrossRefGoogle Scholar
  30. Khatri, Naresh, and H. Alvin Ng. 2000. The Role of Intuition in Strategic Decision Making. Human Relations 53: 57–86.CrossRefGoogle Scholar
  31. Lant, Theresa K. 1992. Aspiration Level Adaptation: An Empirical Exploration. Management Science 38: 623–644.CrossRefGoogle Scholar
  32. Laumann, Edward O., Joseph Galaskiewicz, and Peter V. Marsden. 1978. Community Structure as Interorganizational Linkages. Annual Review of Sociology 4: 455–484.CrossRefGoogle Scholar
  33. Lawrence, Paul R., and Jay W. Lorsch. 1967. Organizations and Environment. Boston: Harvard Business School.Google Scholar
  34. Lyles, Marjorie A. 1981. Formulating Strategic Problems: Empirical Analysis and Model Development. Strategic Management Journal 2: 61–75.CrossRefGoogle Scholar
  35. Lyles, Marjorie A., and Ian I. Mitroff. 1980. Organizational Problem Formulation: An Empirical Study. Administrative Science Quarterly 25: 102–119.CrossRefGoogle Scholar
  36. Maitland, Elizabeth, and André Sammartino. 2015. Decision Making and Uncertainty: The Role of Heuristics and Experience in Assessing a Politically Hazardous Environment. Strategic Management Journal 36: 1554–1578.CrossRefGoogle Scholar
  37. March, James G. 1962. The Business Firm as a Political Coalition. The Journal of Politics 24: 662–678.CrossRefGoogle Scholar
  38. ———. 1978. Bounded Rationality, Ambiguity, and the Engineering of Choice. The Bell Journal of Economics 9: 587–608.CrossRefGoogle Scholar
  39. Meyer, John W., and Brian Rowan. 1977. Institutionalized Organizations: Formal Structure as Myth and Ceremony. American Journal of Sociology 83: 340–363.CrossRefGoogle Scholar
  40. Mindlin, Sergio E., and Howard Aldrich. 1975. Interorganizational Dependence: A Review of the Concept and a Reexamination of the Findings of the Aston Group. Administrative Science Quarterly 20: 382–392.CrossRefGoogle Scholar
  41. Mintzberg, Henry, Duru Raisinghani, and Andre Theoret. 1976. The Structure of ‘Unstructured’ Decision Processes. Administrative Science Quarterly 21: 246–275.CrossRefGoogle Scholar
  42. Moschera, Luigi. 2000. Analisi Di Teorie Dell’organizzazione. Logiche E Modelli Per Un Confronto. Vol. 55. Francoangeli.Google Scholar
  43. Nelson, Richard, and Sidney Winter. 1982. An Evolutionary Theory of the Firm. Cambridge, MA: Belknap, Harvard.Google Scholar
  44. Newell, Allen, and Herbert A. Simon. 1972. Human Problem Solving. Englewood Cliffs, NJ: Prentice-Hall.Google Scholar
  45. Olsen, Johan P. 1976. Choice in an Organized Anarchy. In Ambiguity and Choice in Organizations, ed. James G. March and Johan P. Olsen, 82–139. Bergen: Universitetsforlaget.Google Scholar
  46. Papadakis, Vassilis M., Spyros Lioukas, and David Chambers. 1998. Strategic Decision-Making Processes: The Role of Management and Context. Strategic Management Journal 19: 115–147.CrossRefGoogle Scholar
  47. Pettigrew, Andrew M. 1973. Politics of Organizational Decision-Making. London: Tavistock.Google Scholar
  48. Pfeffer, Jeffrey. 1981. Power in Organizations. Marshfield, MA: Pitman Publishing.Google Scholar
  49. Pfeffer, Jeffrey, and Gerald R. Salancik. 1978. The External Control of Organizations: A Resource Dependence Perspective. Stanford: Stanford University Press.Google Scholar
  50. Pounds, William F. 1969. The Process of Problem Finding. Industrial Management Review (Pre-1986) 11: 1.Google Scholar
  51. Pugh, Derek S., David J. Hickson, Christopher R. Hinings, and Christopher Turner. 1968. Dimensions of Organization Structure. Administrative Science Quarterly 13: 65–105.CrossRefGoogle Scholar
  52. Quinn, James Brian. 1980. Strategies for Change: Logical Incrementalism. Homewood, IL: Irwin Professional Publishing.Google Scholar
  53. Schumpeter, Joseph A. 1934. The Theory of Economic Growth. Warsaw: PWN.Google Scholar
  54. Scott, Richard W., ed. 2014. Institutions and Organizations: Ideas, Interests, and Identities. SAGE Publications Inc.Google Scholar
  55. Shrivastava, Paul, and John H. Grant. 1985. Empirically Derived Models of Strategic Decision-Making Processes. Strategic Management Journal 6: 97–113.CrossRefGoogle Scholar
  56. Silverman, David. 1970. The Theory of Organizations. London: Heinemann.Google Scholar
  57. Simon, Herbert A. 1947. Administrative Behavior. New York: Macmillan.Google Scholar
  58. ———. 1978. On How to Decide What to Do. Bell Journal of Economics 9: 494–507.CrossRefGoogle Scholar
  59. ———. 1987. Making Management Decisions: The Role of Intuition and Emotion. The Academy of Management Executive (1987–1989) 1: 57–64.Google Scholar
  60. Sitkin, Sim B., and Amy L. Pablo. 1992. Reconceptualizing the Determinants of Risk Behavior. Academy of Management Review 17: 9–38.CrossRefGoogle Scholar
  61. Soelberg, Peer Olav. 1967. A Study of Decision-Making: Job Choice. PhD diss., Alfred P. Sloan School of Management, MIT.Google Scholar
  62. Stata, Ray. 1989. Organizational Learning: The Key to Management Innovation. Sloan Management Review 30: 63–74.Google Scholar
  63. Suchman, Mark C. 1995. Managing Legitimacy: Strategic and Institutional Approaches. Academy of Management Review 20: 571–610.CrossRefGoogle Scholar
  64. Thompson, James D. 1967. Organizations in Action: Social Science Bases of Administrative Theory. New Brunswick, NJ: Transaction Publishers.Google Scholar
  65. Tolbert, Pamela S., and Lynn G. Zucker. 1996. The Institutionalization of Institutional Theory. In Handbook of Organizational Studies, ed. Stewart Clegg, Cynthia Hardy, and Walter R. Nord, 175–190. London: SAGE.Google Scholar
  66. Trist, Eric L., and Ken W. Bamforth. 1951. Some Social and Psychological Consequences of the Longwall Method of Coal-Getting: An Examination of the Psychological Situation and Defences of a Work Group in Relation to the Social Structure and Technological Content of the Work System. Human Relations 4: 3–38.CrossRefGoogle Scholar
  67. Walker, Warren E., Peter Harremoës, Jan Rotmans, Jeroen P. Van Der Sluijs, Marjolein B.A. Van Asselt, P. Janssen, and Martin P. Krayer Von Krauss. 2003. Defining Uncertainty: A Conceptual Basis for Uncertainty Management in Model-Based Decision Support. Integrated Assessment 4: 5–17.CrossRefGoogle Scholar
  68. Weick, Karl. 1969. The Social Psychology of Organizing. Reading: Addison-Wesley.Google Scholar
  69. Williamson, Oliver E. 1979. Transaction-Cost Economics: The Governance of Contractual Relations. The Journal of Law and Economics 22: 233–261.CrossRefGoogle Scholar
  70. Woodward, Joan. 1965. Industrial Organization: Theory and Practice. London: Oxford University Press.Google Scholar
  71. Wright, Peter. 1974. The Harassed Decision Maker: Time Pressures, Distractions, and the Use of Evidence. Journal of Applied Psychology 59: 555–561.CrossRefGoogle Scholar
  72. Zollo, Maurizio, Mario Minoja, and Vittorio Coda. 2018. Toward an Integrated Theory of Strategy. Strategic Management Journal 39: 1753–1778.CrossRefGoogle Scholar
  73. Zucker, Lynne G. 1977. The Role of Institutionalization in Cultural Persistence. American Sociological Review 42: 726–743.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Ilaria Galavotti
    • 1
  1. 1.Università Cattolica del Sacro CuorePiacenzaItaly

Personalised recommendations