Strategic Decision Making Process Research : Are Entrepreneur and Owner Managed Firms Different ? Strategic Decision Making

The research into SME’s is often presented as quite distinct from strategy or general management research. This paper examines the literature on Strategic Decision Making (SDM) process, drawing in some findings from the SME sector which show some key similarities. The paper makes proposals for research into SDM processes in SME’s, which would clarify both the general management theory and theory relating to SME’s. DEFINITIONS OF STRATEGIC DECISIONS Mintzberg, Raisinghani and Theoret (1976) define a strategic decision as one which is “important, in terms of the actions taken, the resources committed, or the precedents set”(p.246). Quinn (1980) suggests that these decisions determine the overall direction of the firm. In line with this, Eisenhardt (1989) defines strategic decisions as those which “(1) involve strategic positioning, (2) have high stakes, (3) involve many of the firm’s functions, and (4) [can] be considered representative of the process by which major decisions are made at the firm”(p.546). Eisenhardt & Zbaracki (1992) add that strategic decisions are “those infrequent decisions made by the top leaders of an organization that critically affect organizational health and survival” (p.17). Other authors note in addition that decisions which are strategic in one industry may not be so in another (Hickson, Butler, Cray, Mallory & Wilson 1986). However, Dean and Sharfman (1996) note that in their research, managers had no trouble in identifying strategic decisions. By implication, strategic decisions are complex, and involve a high degree of uncertainty. They may be focused in innovation or entrepreneurship, or