Does strategic decision-making differ to small companies from large companies? Why?

As small companies are different from large ones by name, it is automatic that different exist by their circumstances. This implies that strategic decision; decisions for competitive advantage and sustainability will obviously be different. This is because small companies should adopt niching for competitiveness and sustainability whilst larger ones should adopt market leadership or differentiation as a source of competitive advantage and sustainability.

Business success is all about matching once competence to prevailing opportunities which is the entirity of strategic decision making.

Large companies like BP have strong strategic sense and decision making plays an important role in the company business and its reputation.  Language plays an ultimate role in success.

The insights of strategic management suggest that the process of strategy – the means by which strategy is developed – is as important as strategy itself. Good processes are harder to copy than good strategies; hence good processes may be the source of advantage. Good processes are also an opportunity to avoid risks of failure. The key processes in any large organisation are: co-ordinating, planning and decision making. These should be seen as ‘co-evolutionary’, that is, as dynamic interactions between top-management, middle-management, and the environment.

Performance measurements are linked to pay and reward, thus providing incentives for maintaining results.

BP closely links performance measurement to resource allocation processes and planning.

How resources are allocated is based on both formal prospective systems (plans and proposals) and retrospective systems of assessment

of past performance. Planning, proposing, and assessment occur within the system in a complex and sophisticated manner, linking performance measurement to strategising and strategy debates.

Many professional planners assume that organisations debate intensely about what to do next, but BP seems to be equally concerned with how to do the next things well. It also believes that this will provide a secure way of thinking about the future.

The concepts of organization and structure in small business refer to the systematic way in which company operations are set up. Organizational structure creates a foundation upon which a business operates and grows, formally delineating the lines of managerial authority, the decision-making structure and the grouping of employees. Organizational structures can look very different between small and large businesses, with small business structures generally including fewer layers of management and less employees in the organizational chart.

A small company strategic decisions depends on their survival for the future.  It is kept simple and within the budgets.

Layers of Management

Smaller businesses generally have fewer layers of management, and fewer managers in general, than larger businesses. Small business organizational charts are often flat; they look like two or three stacked rows of bricks with one or two bricks on top. Tall organizational structures, by contrast, look like pyramids, with several management layers that reflect a more complex reporting structure. Small business structures are necessarily flat, due to the relatively smaller size of their workforces. Because of this, employees on the front line are generally responsible for a wider range of work tasks than employees with similar job titles in larger businesses. Many of the tasks normally assigned to managers in corporate businesses are often given to regular employees in a small business.

Strategic decision-making is generally more centralized in smaller organizations than in larger companies, again due to the relatively fewer number of managers found in small companies. In the first one to five years of a business, it is not uncommon for company owners to make virtually all the business decisions. When a company reaches a certain size, however, it becomes impossible for a single person or team of owners to make every decision, so decision-making authority begins to spread out among the various layers of management.

Larger businesses often have wide and well-defined structures wherein each employee has a specific operational role. In smaller companies, each employee is more likely to take on a wider range of tasks than would someone with the same job title in a large company. An accountant in a small company, for example, might be responsible for opening the mail, answering phone calls when the receptionist is out, attending meetings with clients and responding to customer emails. This can create confusion in organization charts, as seeming gaps in work tasks are actually filled by people with unrelated job titles.

The number of office locations, retail outlets, service centers and other premises of a large business is generally greater than small businesses in the same industry. Organizational structure for large businesses must take geographic considerations into account, creating redundant positions in different outlets and coordinating work among physically-distant employees. Small businesses are more likely to work out of a single location with very few human resource redundancies.

Formal lines of communication, or flows of operational information, are a part of an organization's structure. In small businesses, communication between employees is handled in-person much of the time, especially when the business only operates in a single location. Small businesses often provide opportunities for front-line employees to speak and interact directly with executives, whose offices might be only a few steps away; this situation becomes more rare as companies grow. In larger businesses, a greater proportion of the communication takes place over large distances via phone or email, with co-workers in far-flung locations rarely or never meeting each other in person.

Thanks for invitation,

Of course, strategic decision-making differ to small companies from large companies due to the scale of strengths, weakness,opportunities and threats which are dealing with.

Thanks

In my opinion, No, it does not , it is the same in each cases, the most important here, who will work on this decision and what the results we will get from this decision.

Hi, the difference between them is that the strategy of large institutions is always in achieving the preservation of assets along with the acquisition of other assets either by creation, merger or acquisition. The strategy of small enterprises is based on survival and acquisition of the meanings of the three previous and we find a difference in terms of funding and supply, self-autonomy and impact and impact on the environment .....