Conditions affecting managerial decisions

• Conditions affecting managerial decisions about resources, capabilities, and core competencies

  • uncertainty
  • complexity
  • intra organizational conflicts
• exists about the characteristics of the firm's general and industry environments and customer needs

  uncertainty
• results form the interrelationships among conditions shaping a firm

  complexity
• may exist among managers making decisions as well as among those affected by the decisions

  intraorganizational conflicts
• When studying the internal organization, managers face uncertainty because of a number of issues, including those of new proprietary technologies, rapidly changing economic and political trends, transformations in societal values, and shifts in customers’ demands.
• Environmental uncertainty increases the complexity and range of issues to examine when studying the internal environment.
• Biases regarding how to cope with uncertainty, affect decisions made about how to manage the firm’s resources and capabilities to form core competencies.
• intraorganizational conflict may surface when decisions are made about the core competencies a firm should develop and nurture
• In making decisions affected by these three conditions, judgment is required.
• the capability of making successful decisions when no obviously correct model or rule is available or when relevant data are unreliable or incomplete

  judgment
• In making judgment tho, decision makers must be aware of possible cognitive biases, such as overconfidence.
• When exercising judgment, decision makers often take intelligent risks.
• In the current competitive landscape, executive judgment can become a valuable capability.
• the quality of leaders’ decisions regarding resources and their management affect a firm’s ability to achieve strategic competitiveness
• Individuals holding these key decision-making positions are called

  strategic leaders