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Do or die-Strategic decision-making following a shock event
Ingrid Bonn1, Sharyn Rundle-Thiele2
1School of Business, Bond University, Gold Coast, QLD 4229, Australia.
Tourism Management
|April 15, 2020
Summary
Senior managers and boards make faster, more intuitive decisions during shock events, unlike the slower, analytical approach in stable times. Board involvement also increases significantly during crises, highlighting the need for swift decision-making capabilities.
Area of Science:
- Management Science
- Organizational Behavior
- Strategic Management
Background:
- Limited research exists on strategic decision-making by senior managers and boards during shock events compared to stable environments.
- Understanding decision-making processes in crises is crucial for organizational resilience and effective crisis management.
Purpose of the Study:
- To investigate and compare strategic decision-making approaches of senior managers and boards during shock events versus stable environments.
- To analyze the transformation of the board's strategic role following a shock event.
Main Methods:
- Qualitative analysis comparing decision-making processes in shock events versus stable conditions.
- Examination of the strategic involvement of boards before and after shock events.
Main Results:
- Strategic decision-making during shock events is more intuitive, less analytical, and less consultative, characterized by speed and simplification.
- Decision-making in stable environments is more cooperative, formal, analytical, comprehensive, and slower.
- The board's strategic role shifts from limited involvement to strong engagement during shock events.
Conclusions:
- Organizations must develop capabilities for rapid decision-making during crises to avoid 'analysis paralysis'.
- Effective crisis management requires adapting strategic decision-making processes to the unique demands of shock events.
- The strategic role of the board is critical and dynamic during organizational shocks.
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