Strategic Decisions - Definition and Characteristics

Strategic decisions are the decisions that are concerned with whole environment in which the firm operates, the entire resources and the people who form the company and the interface between the two.

Characteristics/Features of Strategic Decisions

  1. Strategic decisions have major resource propositions for an organization. These decisions may be concerned with possessing new resources, organizing others or reallocating others.

  2. Strategic decisions deal with harmonizing organizational resource capabilities with the threats and opportunities.

  3. Strategic decisions deal with the range of organizational activities. It is all about what they want the organization to be like and to be about.

  4. Strategic decisions involve a change of major kind since an organization operates in ever-changing environment.

  5. Strategic decisions are complex in nature.

  6. Strategic decisions are at the top most level, are uncertain as they deal with the future, and involve a lot of risk.

  7. Strategic decisions are different from administrative and operational decisions.

    Administrative decisions are routine decisions which help or rather facilitate strategic decisions or operational decisions.

    Operational decisions are technical decisions which help execution of strategic decisions.

    To reduce cost is a strategic decision which is achieved through operational decision of reducing the number of employees and how we carry out these reductions will be administrative decision.

The differences between Strategic, Administrative and Operational decisions can be summarized as follows-

Strategic Decisions Administrative Decisions Operational Decisions
Strategic decisions are long-term decisions. Administrative decisions are taken daily. Operational decisions are not frequently taken.
These are considered where The future planning is concerned. These are short-term based Decisions. These are medium-period based decisions.
Strategic decisions are taken in Accordance with organizational mission and vision. These are taken according to strategic and operational Decisions. These are taken in accordance with strategic and administrative decision.
These are related to overall Counter planning of all Organization. These are related to working of employees in an Organization. These are related to production.
These deal with organizational Growth. These are in welfare of employees working in an organization. These are related to production and factory growth.

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Strategic Management