Effects of environment, structure and past performance on strategic decision processes : an empirical investigation

This research examines the nature and impact of environmental and organisational variables on strategy processes and firm performance in Fortune 500 firms. For several decades, research on decision processes has developed conflicting findings about the superiority of the different types of decision process. This study maintains that environmental and organisational conditions of the firm ought to be examined by the strategist.;This thesis has three main objectives:;(i) to provide a detailed review of the synoptic and incremental schools,;(ii) to investigate how environmental and intraorganisational variables affect the decision processes,;(iii) to investigate the interaction effects of environmental and organisational factors with decision processes on firm performance.;To attain such objectives, multiple regression analysis is applied.;The first main finding is that environmental munificence should be taken into consideration in the strategic decision process. Secondly, organisational variables, centralisation, formalisation and size have considerable impact on the variations in the strategy process. This thesis maintains that as organisational structure becomes more centralised and formalised and firms grow in size, top executives tend to employ more rational and comprehensive decision processes. Another main finding is that organisations which use the synoptic process in less uncertain environments are likely to perform better than firms which implement incremental processes.;The findings imply that environmental and organisational factors are crucial in the synoptic-incremental dimension. In line with contingency theory, this thesis suggests that the strategic decision process is affected by the external environment and organisational variables.