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Strategic Planning, Thinking, and Decision-Making

Traditional strategic choice models and extended strategic thinking

The traditional strategic choice model has been in use in the business for a long time. However, the assumptions made while integrating this model makes it have so many limitations. According to Blundell, Newey, Persson, and Econometric Society (2006), there is an inconsistency between rationality and the game theory in economics. This means that the traditional strategic choice model assumes consumers’ preferences are primitive, and the utility functions as the full representations of consumer choices (Blundell, Newey, Persson & Econometric Society, 2006). The rationality here is not recognized and put into context.

Instead, the traditional model assumes that rationality is nonexistent. The game theory has proved the early critics on the issue of rationality and preferences. For example, people make decisions based on the choices and the preferences they have at their disposal. The predictability and control make the individual predict the exception of an unforeseen outcome and have a specific control as a measure. This assumption is hardly held in the traditional model. This is because the room for flexibility on the different choices to be made is allowed. Preferences are uncertain according to the conventional approach, and consumers are irrational in their decision-making process (Korowajczuk, 2004).

The traditional strategic choice model typically shows how the decision process leads to their formation. Still, it does not have a separation between the “superior strategic decision processes from mediocre ones” (Papadakis & Barwise, 1998). This is because in the traditional strategic process, choices play the most remarkable part, and decisions are quickly made. It also ensures that the decisions made are flexible for adaptability if the circumstances change in the process.

This is a limitation because the quality is not emphasized. If they lack quality, then it means that they cannot be effective in organizations. Papadakis and Barwise (1998) note traditional models depend on chance in the decision-making process. This emphasis is to show that cognitive proposes are not applied but instead in the cognitive process is applied. This is against the predictability assumptions where predictions have to be made; instead, the traditional approach allows the events, decisions to happen (Korowajczuk, 2004).

The traditional choice models have decision making that lack quality as compared to the extended strategic thinking models. According to Senge (2009), learning organizations are meant for people who merge to achieve what they need. On the other hand, the dynamics of the system for the basis of the learning organization. Now the difference between the traditional and extended strategic models is that the former applies what is written on management is complex systems.

This, according to Senge (2009), makes it impossible to see organizations as a part of the dynamic system. In the traditional strategic choice model, it is not easy to determine whether the strategy developed has a vision or its formulation was before the vision. This makes it unclear and ambiguous compared to the extended strategic models where there is an emphasis on quality through organizational learning (Sloan, 2006).

The traditional models of strategy are based on strategic planning, which is the modern time are no longer productive. This is because it does not allow systematic learning. On the other hand, strategic thinking is more integrated into the organization’s perspective (Sloan, 2006). It also allows the use of innovation and organizational learning and future predictions that are seen as useful in changing the strategies of an organization (Sloan, 2006).

The prediction of the future is not possible in the traditional strategic models. Sloan (2006) suggests that conventional strategic models, the formulation process, and the implementation are usually carried in a sequence and in a discrete way. Contrarily, strategic thinking allows these processes to be interactive. According to Senge (2009), the managers are incorporated in the system dynamics, know the roles, and how the system functions. It recognizes that the organization is part of the system.

“The fall and rise of strategic planning” by Mintzberg

The author of the article gives arguments on the fall and the rise and fall of strategic planning in the business world. The author differentiates strategic thinking and strategic planning, where the former is the synthesis, and the latter is an analysis. Strategic planning has indeed fallen over the years because of the confusion caused by strategic thinking. This has led to visions being drafted but not being implemented. The relevance is that it tries to give the difference between the two commonly confused strategic aspects. The article also gives an insight into strategic planning. This is because the traditional strategic approach models fall in strategic planning without emphasizing strategic planning.

Breaking down the differences between strategic planning and thinking gives managers in organizations and those involved in management the ability to make concise judgments. It also gives them insight on how to create visions and goals achievable. The author also gives the reasons why strategic planning fails. In his opinion, strategic planning failed because it deprived managers of the chance to get committed. In a more elaborative way, planning is more of a calculation than commitment. The author notes that over the years, strategic planning has not allowed its synthesis. Strategic planning is a long process and should incorporate the thinking process.

As a behavior that is learned most times, the thinking process is vital in decision making and strategic planning. The article has in-depth teaching on how organizations are supposed to work and how managers are or no incorporated in the functioning. It has also told us how human beings think, and, on some occasions, thinking is not applied in strategic incorporation.

Reference List

Blundell, R., Newey, W. K., Persson, T., & Econometric Society. (2006). Advances in economics and econometrics: Theory and applications, ninth World Congress. Cambridge: Cambridge University Press.

Korowajczuk, L. (2004). Designing cdma2000 systems. Chichester, UK: Wiley.

Mintzberg, H. (1994). The fall and rise of strategic planning. Harvard Business Review, 72(1), 107–114.

Papadakis, V., & Barwise, T. P. (1998). Strategic decisions. Dordrecht: Kluwer Academic Publishers.

Senge, P. (2009). Peter Senge and the learning organization. Web.

Sloan, J. (2006). Learning to think strategically. Amsterdam [u.a.: Elsevier/Butterworth-Heinemann.