The Complexity of Simple Rules in Strategic Decision Making: Toward an Understanding of Organizational Heuristics

Abstract

The way organizations cope with uncertainty in strategic decision making is prominently discussed. Concepts such as heuristics and simple rules are gaining increasing attention in strategic management research. However, despite their importance, little is known how heuristics and simple rules operate. Our qualitative study reveals that, first, strategic decisions consist of three basic elements: single rules, rule patterns, and emotional handling. Second, we find that firms develop generalizable rule patterns which follow a sequential order of inter-linked rules. Based on the findings we introduce the concept of organizational heuristics as inter-linked rule patterns drawing on organizational experience.

Citation

Kazakova, T.V. and Geiger, D. (2016), "The Complexity of Simple Rules in Strategic Decision Making: Toward an Understanding of Organizational Heuristics", Uncertainty and Strategic Decision Making (New Horizons in Managerial and Organizational Cognition), Emerald Group Publishing Limited, Leeds, pp. 127-146. https://doi.org/10.1108/S2397-52102016013