MAKING FAST STRATEGIC DECISIONS IN HIGH-VELOCITY ENVIRONMENTS.

Abstract

How do executive teams make rapid decisions in the high-velocity microcomputer industry?This inductive study of eight microcomputer firms led lo propositions exploring that question.Fast decision makers use more, not less, information than do slow decision makers.The former also develop more, not fewer, alternatives, and use a two-tiered advice process.Conflict resolution and integration among strategic decisions and tactical plans are also critical to the pace of decision making.Finally, fast decisions hased on this pattem of hehaviors lead to superior performance.In October 1984, Gavilan Computer filed for bankruptcy protection under Chapter 11.Despite a $31 million stake from venture capitalists, Gavilan experienced delays and indecision that ultimately cost the firm its early technical and market advantages.The firm's leading-edge technology hecame a "me too" one and competitors flooded its empty market niche.As the firm died, one executive mourned: "We missed the window" (Hof, 1984).This story is not unusual in fast-paced settings like the microcomputer industry.The tumult of technical change places a premium on rapid decision making.Yet, although decision speed seems to affect firm performance in such environments (Bourgeois & Eisenhardt, 1988) and is a key characteristic differentiating strategic decisions [Hickson, Butler, Cray, Mallory, & Wilson, 1986), there has been little research on fast strategic decision making.This article explores the speed of strategic decision making.In an earlier study (Bourgeois & Eisenhardt, 1988), my colleague and I linked fast strategic decision making to effective firm performance.In a second study on politics (Eisenhardt & Bourgeois, 1988], we noted that politics seemed to I would like to give special thanks and acknowledgment to my friend and colleague.