An Empirical Test of Thompson's Model of Strategic Choice

I. INTRODUCTION Research finds that decision-making involves intelligence gathering, direction setting, option identification, strategic choice, and implementation (e.g., Mintzberg et al., 1976; Nutt, 1984; Hickson et al., 1986; Harrison and Phillips, 1991; Eisenhardt and Zbaracki, 1992). This research effort considers the "strategic choice " step in which decision makers evaluate their options to select a course of action. The selection of an evaluation approach has been controversial. Some call for judgment, others bargaining, and still others analysis (e.g., Cyert and March, 1963; Soleberg, 1967; Bower, 1970; Witte, 1972; Dean and Sharfman, 1996, Papadakis and Barwise, 1998). Those advocating analysis require facts to be gathered that order options according to their acceptance, originality, benefits, etc. (e.g., March and Simon, 1958; Churchman, 1971). Hoos (1972), Mintzberg et al. (1976), and Langley et al. (1995) question the usefulness of analysis to do this ordering. Instead, they advocate judgment in which decision makers draw on their skill and experience to make a choice or bargaining, should interest groups have reservations. Still others (e.g., Pfeffer, 1992) call for bargaining, no matter what the situation. They argue that a decision maker faced with a strategic choice is confronted with a number of value-laden considerations, such as emotional attachments, stakes, and animosities, which influence the choice. Factoring in subjective considerations resists judgment and analysis and requires bargaining to find a consensus (Snyder and Page, 1958; Allison, 1971; McKie, 1973; Cohen et al, 1972; Hickson et al, 1986; Langley, 1989; Eisenhardt, 1998). It should be noted that these studies seldom consider outcomes. Instead, a limited number of exemplars or logic is marshaled to support their claims (Fredrickson, 1985). Formulating Thompson's strategic choice ideas as prescriptions, identifying when to use analysis, judgment, and bargaining, provides a way to reconcile these contradictory views (Thompson and Tuden, 1959; Thompson, 1967). This seems reasonable because Lindblom (1965), Perrow (1967), Vroomand Yetton (1973), Daft and Weick (1984), Nutt (1989), Pfeffer (1992), Daft, (1995), Butler (1998), and still others derive their decision making frameworks from prescriptive interpretations of Thompson's core ideas. A testament of the enduring value of these ideas can be found in a recent reissue of Thompson's seminal work (Thompson, 2003). This prompted a new round of reviews by notable scholars (e.g., Weick, 2003), with all praising the insights offered. Despite the widespread recognition, adaptation, and emulation of Thompson's ideas no empirical field-based research has been done to test the value of the prescriptions. This is unfortunate because, as Davis (2003) notes, Thompson's ideas offer an intriguing set of hypotheses for empirical study. This research offers such a test by determining the extent to which success is realized when decision makers follow, and fail to follow, the strategic choice prescriptions. In the test, organizational decisions are used, which allows success to be determined by the decision's effectiveness (measured by decision adoption and value) and efficiency (measured by implementation time). This avoids proxies for success indicators and uses real outcomes created by the decisions to test the merits of action taken. II. DECISION APPROACHES Scholars have interpreted Thompson's ideas as prescriptions and descriptions, applying their interpretations to a variety of topics that range from organizational design to decision making. In this research, some the prescriptions implied by the propositions are made explicit and applied to decision making. Thompson's (1967; 2003) framework, found on page 134, suggests a way to select among decision approaches using situational indicators. Using such measures in a contingency framework to select among actions has considerable support. …