the characteristics of strategic decisions

1. Leading global excellence in procurement and supply
The characteristics of strategic decisions
Presenter: We are going to take a look at the key characteristics of strategic
decisions.
Strategic decisions link to the long-term objectives of an organisation.
They are therefore linked to an organisation's vision and mission
statements and determine how the organisation intends to deliver on
those statements. Strategic decisions usually relate to organisational
survival, growth and development and play a key role in determining the
focus of an organisation, which, in turn influences the future success or
failure of an organisation.
For example, whether the organisation decides to concentrate on an
existing area of activity in order to become market leader, or decides to
launch new products, or enter new markets, or both. Strategic decisions
respond to or anticipate the external factors that could change, and in
turn affect the organisation.
For example, analysts can look at current and predicted trends to
forecast how the organisation need to adapt in order to remain current
within the marketplace in the long-term. Strategic decisions can often
result in significant change within an organisation.
For example, if an organisation is failing, strategic decisions such as,
selling part of the business, restructuring, making redundancies, or
centralising a procurement function can be made in order to reduce
costs.
Strategic decisions can change the whole direction or focus of an
organisation and therefore have significant implications for expenditure.
As a result, there can be a high element of risk associated with them
which is why the decisions are usually made by high level management.
For example, when a category head of a large manufacturer identified a
shift in the market they undertook the detailed analysis and decided to
move to a long-term single source, collaborative arrangement with a
major supplier which provided them with better pricing and assurance of
supply.