The Nature of Strategic Decision Making – Exploiting the Role of Managers' Incremental and Radical Learning

The purpose of this paper is to examine the role of two basic types of learning in contemporary organizations – incremental (knowledge exploitation) and radical learning (knowledge exploration) – in making organization’s strategic decisions. In achieving this goal a conceptual model of influence of learning types on the nature of strategic decision making and their outcomes was formed, on the basis of which the empirical research was conducted, encompassing 54 top managers in large Croatian companies. The paper discusses the nature of organizational learning and decision making at strategic management level. The results obtained are suggesting that there is a relationship between managers' learning type and decision making approaches at strategic management level, as well as there is the interdependence between these two processes with strategic decision making outcomes. Within these results there are interesting insights, such as that the effect of radical learning on analytical decision making approach is significantly weaker and narrower when compared to the effect of incremental learning on the same approach, and that analytical decision making approach does not affect strategic decision making outcomes.