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Week 1 Discussion: Strategy Development, Decisions, and Decision Models
Jordyn Matthews
Introduction
When we take this week’s readings as a whole, the concept of strategy is a multifaceted process that involves analytical rigor, disciplined decision-making, and a comprehensive, adopted moral vision (Gamble et al., 2024; Keller, 2012). As we embark on what it means to develop smart, sustainable business strategies, we can reflect on our own professional experiences and provide examples of when certain decisions and the processes for arriving at them made sense, and when there was a lack of consistency and personal pitfalls. The readings this week provide a roadmap and research-driven models and techniques that support more thoughtful discussion and analysis of how business strategy is developed, when necessary key decisions are made, and how decision models are utilized, with a comprehensive understanding grounded in God’s will.
Process: Business Strategy Development
When viewed through the foundation strategy’s definition, strategy formation starts with a “deliberate, integrated set of actions” aimed at diagnosing and understanding the organization’s capabilities to establish a focus and direction that secures a sustainable competitive advantage (Gamble et al., 2024). This part of the process couples effective resource allocation with a clear set of objectives, recognizing that strategic trade-offs are inevitable to reinforce the sought-after competitive advantage and unique positioning. As the process progresses, Krogerus & Tschäppeler (2017) build on the principles outlined in Gamble et al.’s Chapter 2 discussion of mission and vision. They incorporate decision models that function as a “toolkit,” offering visual and conceptual frameworks that reinforce the necessity of strategic positioning, decision-making under uncertainty, and the imperative that leadership’s judgment and decision-making must work in conjunction with these models to formulate a responsible, sustainable, and effective strategy.
Furthermore, as these models are used, they reinforce the idea that the process for developing a strategy must use the right logic at the right moment, not necessarily more tools, but rather applied discipline and judgment to develop points of differentiation, focus, and coherent positioning with consistency (Rumelt, 2011). This part of the process aligns with action and business ethics, which can be further explored through the biblical integration discussed later in this post. Therefore, ultimately, leaders must integrate analysis, judgment, and purpose, as well as utilize the techniques that safeguard them from the pitfalls of utilizing certain strategies, such as superficial branding and improper allocation of resources, and eliminate the risk of becoming “efficient but unethical, or principled but ineffective” (Gavetti et al., 2005; Rumelt, 2011).
Strategic Thinking: Key Decisions
Even though each reading and article approaches the key decisions from a different angle, a few common themes are woven throughout, addressing which decisions are made in strategy formulation and why those decisions are important. More specifically, Rumelt (2011) is the most vocal that strategy only exists when leaders make “hard, consequential choices, organized around three specific themes, known as the ‘kernel’. Decisions must include a diagnosis of the organization’s most critical challenge, an overall guiding policy for addressing it, and coherent actions to follow. Furthermore, Krogerus & Tschäppeler (2017) supplement Rumelt’s focus by examining how leaders prioritize these imperative decisions. They focus on decision logic, which asks leaders to answer questions about importance versus urgency and to use models to fit specific situations and elicit model-driven questions to drive more intentional, less reactive decisions.
In addition to Rumelt (2011), Gamble et al. (2024) provide more straightforward questions that center around direction and alignment. These question topics focus on competition and are given high importance, as competitive advantage affects the multilevel organization mix of strategy, resources, culture, and execution. These topics are intertwined with the concepts and questions investigated in Eisenhardt & Zbaracki’s (1992) article by shifting attention from what a strategy should be to how strategic decisions are made. They reiterate fellow authors’ decision-making concepts: decisions depend on discipline, clarity about what strategy means, and the ability to make correct decisions amid uncertainty and underlying organizational politics, missions, and values. Together, the authors provide several views on how to ask questions, how they should be answered, and the importance of questions in strategic thinking and formulation.
Decision Model
As a small business owner in an extremely tight, competitive market, I am often extremely hard on myself, my decisions, and the expectations I set. Therefore, when I look at Krogerus & Tschäppeler’s (2017) models, I tend to use the ones noted in the “how to improve and understand myself” to note motivators and drivers in the decisions I make. Therefore, the most commonly used is the Energy Model (pg. 62), in which I spend most of my time as “dream-driven” and focused on the future. As stated, this approach often hinders strategy development by failing to understand what is happening in the present or by slowing down to do so. This line of thinking creates more urgency and anxiety that is not necessarily aligned with Rumelt’s (2011) rationale, emphasizing disciplined reasoning and intellectual honesty anchored in the present moment. This future thought process often conjures the less effective way to utilize the “gap-in-the-market model” (pg 32). While I am looking for a niche that has been overlooked and not yet identified, I tend to do so from past or future fear, or from overly advanced planning and estimating. These models and their interpretations have shown me that slowing down and examining the present situation before analyzing the competition can give me a clearer picture and a stronger foundation for planning my next steps and developing an informed strategy.
Biblical Integration
While strategy relates to the utility, technical, and economic aspects of a business, it is understood that strategy should be considered as a form of stewardship and wisdom. When viewed through the lens of Keller (2012), strategic planning is a God-given, disciplined way for leaders and organizations to steward resources, people, and opportunities, and to work toward the responsible creation of business systems that allow mankind to thrive. Taken a step further, Keller emphasizes that decision-making, and ultimately strategy formulation, should account for the Gospels’ word that leaders should be free from fear-based decision-making and identity-driven ambition. This allows leaders to make decisions without needing to appear impressive or to seek motivation outside of what will allow their businesses to contribute to God’s plan. As seen in Proverbs 16:3 (NIV): Commit your work to the Lord, and your plans will be established. This affirms that planning and strategy grounded in God’s purpose does not promise automatic success born out of urgency, but rather affirm that decision-making and strategy can be an expression of the Christian faith and align ways of thinking with moral responsibility and trust in God’s work.
Conclusion
Across these works and authors’ reflections of what is and is not strategy, there is an understanding and agreement that strategy should be viewed as a commitment. Without committing to resources, people, time, more ethics, and God’s plan and strategy, strategy is merely activity without the ability to positively affect the direction of the organization and the communities it serves. Therefore, when strategy is understood as more than tools or ambitions and more as a pattern of intentional and methodological choices guided by sound decision models and appropriate questions, strategic thinking and strategy formulation become a faithful expression of stewardship, integrating purpose and accountability for the flourishing of others and the common good (Keller, 2012).
Annotated Bibliography
Gavetti, G., Levinthal, D., & Rivkin, J. W. (2005), Strategy Making in Novel and Complex Worlds: The Power of Analogy Strategic Management Journal, 26(8), 691–712, to an external site.
Summary of Key Points
Gavetti et al. conclude that strategy formulation is more effective when analogical reasoning is utilized to draw informed comparisons between the current challenge and prior situations with a multifaceted view of different industries, markets, and competitors. They argue that analogy is important for supporting an outlook beyond local and incremental improvement, even when the similarities and connections are somewhat weak, and they further explore the distinction between surface-level and structural analogy, focusing on obvious functions prone to error and on applying deeper causal relationships. In conjunction with these theories, Gavetti et al. introduce the tension between thinking and accuracy and ultimately reinforce that strategy is a foundational cognitive discipline.
Evaluation of the Quality of the Publication
The article is presented through academic institutions’ research portals based on its extensive research and scholarly implications for future research, publications, and developments. Therefore, the article is of high quality for use in graduate-level discussions to expand on ideas, identify potential areas and gaps, and contribute to further research and additional literary works.
Evaluation of the Quality of the Author(s)
All three authors are known for their contributions to strategic management research and are considered, within their respective fields of academia, to be of a high-tier of scholarship in business management. Gavetti is widely regarded for his approach to cognition and its relationship to strategy, while Levinthal and Rivkin are known for their work on organizational learning and competitive positioning. Together, they combine their impressive backgrounds to enhance learning on cognitive insight, formal theory, and practical use and relevance.
Where this fits into the discussion
This article is representative of how leaders actually make strategic decisions and mirrors concepts presented in Rumelt’s (2011) diagnosis, guiding policy, and coherent action framework. As these authors rely on analogical reasoning, they support concept theories, such as emphasis on insight over formula, use of mental models for cognitive guidance, and views that support iterative and adaptive techniques. Overall, their findings support the other authors’ conclusions regarding key decisions and processes in place for developing sustainable strategies.
Eisenhardt, K. M., & Zbaracki, M. J. (1992). Strategic decision making. Strategic Management Journal, 13(S2), 17–37. to an external site.
Summary of Key Points
The purpose of Eisenhardt & Zbaracki’s (1992) article is to dismantle the false dichotomy between rational decision models and experiential decision-making. In doing so, they combine decades of research to further the discussion on how effective strategic decisions are made and how the research presented blends previous academic conclusions with the current global business environment. They uncover that decisions are made within three lenses: rational, based on frameworks and models; behaviorial grounded in heuristics; and political, rooted in incentives and power. Ultimately, they show that good strategic decision-making depends less on the framework and more on consistent and disciplined processes.
Evaluation of the Quality of the Publication
The quality of this publication and its findings are supported by adequately presented research and case study details, along with conclusions and calls for additional research. Well-organized thought and fact presentation enable the data and materials to be used at the graduate and postgraduate levels. Therefore, the quality is of a high caliber for present and future academic conversations.
Evaluation of the Quality of the Author(s)
Based on the authors’ backgrounds and previous publications, the collaboration between these two authors is exceptionally high-quality, producing field-defining work. Eisenhardt’s research has shaped how scholars understand strategic decision-making by building and updating her qualitative research, and her work is highly cited through various accredited academic publications. In addition, Zbaracki contributes to the work by strengthening the article’s credibility by paying particular attention to how the behavioral and decision-process theories presented interact within real organizations. This collaboration represents top academic leadership and provides the foundation for future work and research.
Where this fits into the discussion
This article reinforces Gamble et al.’s (2024) balanced strategic view of planning and execution and combines the additional context that supports Rumelt’s (2011) critique that organizational constraints and politics cannot be ignored in the process of strategy development. Furthermore, their insights give more visibility to the underlying biblical themes, and Keller’s (2012) call for integrity and humility in work.
References
Gamble, J., Peteraf, M., & Thompson, A. (2024). Essentials of strategic management (8th ed.). McGraw-Hill Course Content Delivery. ISBN: 9781266496028
Gavetti, G., Levinthal, D., & Rivkin, J. W. (2005), Strategy Making in Novel and Complex Worlds: The Power of Analogy. Strategic Management Journal, 26(8), 691–712, to an external site.
Eisenhardt, K. M., & Zbaracki, M. J. (1992). Strategic decision making. Strategic Management Journal, 13(S2), 17–37. to an external site.
Keller, T. (2012). Every good endeavor: Connecting your work to God’s work. Riverhead Books. ISBN: 9781594632822.
Krogerus, M., & Tschäppeler, R. (2017). The decision book: 50 models for strategic thinking(Rev. ed.). W.W. Norton & Co. ISBN: 9780393652376.
Rumelt, R. (2011). Good strategy/bad strategy: The difference and why it matters. Crown Business. ISBN: 9780307886231.
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