Levels of DSS models - Strategic, Tactical, Operational page 105

http://www.smallbusinesshq.com.au/factsheet/20305-Tips-on-Strategic-Tactical-and-Operational-Decision-Making.htm

Strategic Decisions - 'What?'

Strategic decisions deal with the big picture of your business. The focus of strategic decisions is typically external to the business and usually future oriented. Strategic decision-making creates the forward thrust in the business.

It includes decisions about:

• What business are you in?
• What is your vision for the business?
• What's your business' identity?
• What do you stand for?
• Which direction is the business headed?
• How will the business compete?

Corporations often capture their overall business strategy in a "Statement of Intent" and it's an excellent term for describing what strategic decision-making is. Too often people confuse strategic decisions with tactical decisions and fail to really examine the big picture. It can lead to stagnation in the business and an inability to move forward.

Top managers

Tactical Decisions - 'How?'

Tactical decisions involve the establishment of key initiatives to achieve the overall strategy. For example, if you have decided to be the Number 1 provider in your market (a strategic decision) then you will develop tactics (e.g. implement a marketing system, increase number of therapists) to achieve that outcome. In a small business you may have 4 or 5 key tactics that you are going to use to achieve your overall strategy.

Again this layer of decision-making can sometimes be overlooked yet it is the glue that creates a strong connection between your long-term vision and your day-to-day activities. Tactical decision-making is the domain of 'mission' statements.

Think in terms of the battlefields from which the term has emerged. The overall strategy, that is, what the army is there to do, is to win the war. Then you have a number of 'missions' you send troops on, preferably diplomatic ones, the cumulative effect of which is intended to win the war.

Operational Decisions - 'How will we deploy resources?'

Operational decisions determine how activities actually get done. They are the 'grass roots' decisions about who is going to do what and when. It includes:

• How will we spend our money this month?
• How will we service that client?
• What is our procedure for delivering an order?
• Who will be doing quality control?

If you are making decisions involving processes and procedures they are usually operational decisions. Operational decisions are often made in 'real time' and are the result of needing to make quick adjustments or change to achieve the desired outcome.

http://www.enotes.com/business-finance-encyclopedia/decision-making

STRATEGIC, TACTICAL, AND OPERATIONAL DECISIONS

People at different levels in a company have different types of decision-making responsibilities.

Strategic decisions, which affect the long-term direction of the entire company, are typically made by top managers. Examples of strategic decisions might be to focus efforts on a newproduct or to increase production output. These types of decisions are often complex and the outcomes uncertain, because available information is often limited. Managers at this level must often depend on past experiences and their instincts when making strategic decisions.

Tactical decisions, which focus on more intermediate-term issues, are typically made by middle managers. The purpose of decisions made at this level is to help move the company closer to reaching the strategic goal. Examples of tactical decisions might be to pick an advertising agency to promote a newproduct or to provide an incentive plan to employees to encourage increased production.

Operational decisions focus on day-to-day activities within the company and are typically made by lower-level managers. Decisions made at this level help to ensure that daily activities proceed smoothly and therefore help to move the company toward reaching the strategic goal. Examples of operational decisions include scheduling employees, handling employee conflicts, and purchasing rawmaterials needed for production.

It should be noted that in many "flatter" organizations, where the middle management level has been eliminated, both tactical and operational decisions are made by lower-level management and/or teams of employees.