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Strategic Decision Processes in High Velocity Environments: Four Cases in the Microcomputer Industry

Author

Listed:
  • L. J. Bourgeois, III

    (Darden School, University of Virginia, Charlottesville, Virginia 22906-6550)

  • Kathleen M. Eisenhardt

    (Department of Industrial Engineering and Engineering Management, Stanford University, Stanford, California 94305)

Abstract

How do executives make strategic decisions in industries where the rate of technological and competitive change is so extreme that market information is often unavailable or obsolete, where strategic windows are opening and shutting quickly, and where the cost of error is involuntary exit? How do top management teams divide the decision making responsibility? And how is risk of strategic error mitigated? What we report here is a set of hypotheses induced from a field investigation of four microcomputer firms, where we studied how each of the top management teams went about making major decisions. Our goal was to extend prior work on strategic decision making to what we term high velocity environments. Our results consist of a set of paradoxes which the successful firms resolve and the unsuccessful firms do not. We found an imperative to make major decisions carefully, but to decide quickly; to have a powerful, decisive CEO and a simultaneously powerful top management team; to seek risk and innovation, but to execute a safe, incremental implementation. Despite the apparent paradox, effective firms do all of these simultaneously. These paradoxes are presented in the form of propositions and testable hypotheses.

Suggested Citation

  • L. J. Bourgeois, III & Kathleen M. Eisenhardt, 1988. "Strategic Decision Processes in High Velocity Environments: Four Cases in the Microcomputer Industry," Management Science, INFORMS, vol. 34(7), pages 816-835, July.
  • Handle: RePEc:inm:ormnsc:v:34:y:1988:i:7:p:816-835
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    File URL: http://dx.doi.org/10.1287/mnsc.34.7.816
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