An Information Processing Model of Organizational Perception, Strategy and Choice

The strategic decision making process is conceptualized to occur in seven phases. A computer simulation model based on these steps has been developed which integrates the processes of organizational perception of key environmental factors, strategy formulation by the organization, and execution of routine operating decisions and standard operating procedures. Fifty computer runs of the model show the necessity of qualifying more narrowly three simplistic, but "intuitively obvious," hypotheses: 1 A firm will do better in a more munificent environment than a less munificent one. 2 A firm more sensitive to changes in its environment will do better than a less sensitive firm. 3 The more uncertainty there is in a firm's environment, the worse that firm will perform. The role of computer simulation models of organizational strategy-making in training top managers and strategic planners is sketched.

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