FLEXIBILITY IN STRATEGIC DECISION-MAKING - INFORMATIONAL AND IDEOLOGICAL PERSPECTIVES

Adaptation is a crucial challenge for organizations, and an important theme in the strategy and organization theory literature. We still hav e much to learn, however, about the strategic processes by which adapt ation is achieved. In this paper we focus on a basic element in the ad aptation process, i.e. flexibility within the strategic decision-makin g process. We concentrate on strategic decisions because these choices are the most important adaptations the firm makes. We suggest that th e core of all organizational adaptation is a decision-making process. Unless the decision-making process itself is flexible, it is unlikely the organization can be flexible enough to adapt. We derive hypotheses concerning the factors that lead to flexibility (versus rigidity) fro m both information processing and ideological perspectives, and test t hem in a study involving 57 strategic decisions in 25 companies. Our r esults identify three contextual factors related to both perspectives - including competitive threat, slack and uncertainty - that are helpf ul in understanding flexibility in strategy decision making. While man agers appear to be more flexible when decisions are uncertain, we foun d that in the very conditions where managers need the most flexibility (high competitive threat and low slack), they are least likely to be flexible.