The greater the number of alternatives considered simultaneously, the greater the speed of the strategic decision process. But multiple alternatives are likely to slow the strategic decision process. So ‘multiple alternatives’ as comprehensiveness, which includes being “exhaustive or inclusive in the generation and evaluation of alternatives.” In addition a similar conclusion5 can be reached that multiple alternatives accelerate cognitive processing and hence, decision-making speed.
Other justifications for this positive correlation include perceiving multiple alternatives as a form of fallback position. If one alternative fails, executives can quickly shift to a new one Additionally, having simultaneous alternatives reduces the ‘escalation of commitment’ to any one option6. This implies that decision makers who pursue multiple options have a lower psychological stake in any one alternative and thus, can quickly shift between options if they receive negative information on any alternative.
Power and the role of counselors: The greater the use of experienced counselors, the greater the speed of the strategic decision process. The fact that political factors influence the pace of decisions has initially been pointed out that resistance by influential people was a leading cause of delay in making strategic decisions. Alternatively, when few executives are involved, a decision process can be rapid.
For example autocratic decision-making in situations in which speed is essential. According to this perspective, centralized power quickens decisionmaking. Eisenhardt states two reasons for an experienced counselor to speed decision-making. The first reason is that the counselor speeds up the development of alternatives, providing a quick sounding board for ideas. The second reason is that an experienced counselor supports a team in dealing with the ambiguity of high-stakes in decisionmaking.
Conflict and resolution: It indicates no pattern linking decision speed to either the general level of conflict within a team or conflict on the decision studied. This finding contradicts the argument that conflict influences the length of a decision process. For example conflict and disagreement creates interruptions in the process. Hence, from their perspective, increasing conflict slows the pace of strategic decisions. So the greater the use of active conflict resolution, the greater the speed of the strategic decision process. It is supported that the fact that an active, induced way of conflict resolution leads to faster decisions than a passive process of decision-making where decisions are forced due to external deadlines and events rather than taken deliberately.
Fragments and decision integration: The final distinction between slow and fast strategic decision-making lies in the web of relationships among decisions. The greater the integration among decisions, the greater the speed of the strategic decision process. Teams attempting to integrate strategic decisions with one another partly by tactical plans made faster strategic decisions. In contrast, the teams making slower decisions treated decisions as discrete and even disconnected events.
There are two reasons why the integration of decisions leads to faster decision-making. The first reason is that decision integration helps executives to analyze the viability of an alternative more quickly. The second reason is that it helps them to cope with the ambiguity of high-stakes decision-making by providing a better understanding of alternatives and in turn a feeling of competence and control. Eisenhardt’s findings on influencing factors regarding decision speed can be summarized by the following quotation.
“The evidence suggests that fast decision makers use more, not less information, than do slow decision makers. They also develop more, not fewer, alternatives. In contrast to current literature, this study found that centralized decision-making is not necessarily fast, but a layered advice process, emphasizing input from experienced counselors, is fast. The findings also indicate that conflict resolution is critical to decision speed, but conflict per se is not. Finally, integration among strategic decisions and between decisions and tactical plans speeds, not slows, decision-making. Such integration helps decision makers cope with the anxiety of high-stakes decision-making.”
Formalization: Wally/Baum’s concept of formalization refers to the extent to which firm policies, job descriptions, organization charts, plans and objective setting systems are articulated explicitly, usually on the basis of written communication. Formalization may slow the first two phases of the rational normative decision-making process, intelligence and design, by encouraging the collection of much data and extremely thorough analyses of alternatives Formalization may also slow the decision-making by encouraging organizational inertia, routine, rule-like behavior patterns that detract from adaptive responsiveness and thereby impede executives’ ability to choose flexibly.
Speed, timing, and number of alternatives: Faster decision making was associated with more alternatives. How these alternatives are sequenced is crucial to the pace of decision-making. Rapid decisions were characterized by simultaneous consideration of multiple alternatives, and the slower decisions were characterized by sequential consideration of fewer alternatives. Analys alternatives are difficult to assess in isolation e.g.: when one is first looking for a car, look at several cars. Secondly having simultaneous alternatives reduces the escalation of commitment to any one option. It is easier to shift between options. Finally simultaneous alternatives provide a fallback position.
Speed, power ; the role of the counselor No pattern linking decision speed to power concentration. Some autocrats were fast but others were slow. What was important was the prcoess whereby CEOs gathered advice. Fast teams had a two-tier advice process: first tier: the CEOs sought counsel from all members of the top management team, but in the second tier they focused on obtaining advice from one or two of the firm’s most experienced executives. These people were called counselors by Eisenhardt. Slow teams either had no counselor or had a less experienced executive in the counselor role.
Speed, fragments, and decision integration The final critical difference lies in what she calls the web of relationships among the decisions. Fast teams attempted to integrate strategic decisions with one another and with tactical plans. Slower teams did not try to connect or integrate these strategic decisions. Decision integration helps executives to analyze the viability of an alternative more quickly. It helps them cope with the ambiguity of high stakes decision making. The development of concrete ties with other major decisions and decision details may alleviate the anxiety that can plague executives as they face high-stakes decisions.
How does strategic decision speed link to performance? Faster decision making is associated with better performance. Eisenhardt hypothesizes that slow decision makers learn less. Executives learn by making decisions, but if they make few decisions, as slow decision makers do, they learn very little. The teams making fast decisions engage in behaviours to cope with this anxiety & build confidence. One tactic is to rely on the counsel of experienced executives. Another tactic is to tie together strategic decisions and concerete operating plans. Fourth, the findings link fast decision making with effective performance. These findings suggest a configuration of cognitiv e, political, and emotional processes that are associated with rapid closure on major decisions.