Inertia And Creeping Rationality In Strategic Decision Processes

Abstract

In two earlier studies, comprehensiveness, a characteristic of rational strategic decision-making processes, exhibited a positive relationship with organizational performance in a stable environment and a negative relationship with performance in an unstable environment. This research, a longitudinal extension of those studies, indicated that comprehensiveness exhibited considerable inertia, with only modest changes occurring since the original studies. Nevertheless, changes in organizational size and executive-team tenure, and the level of team continuity, were associated with changes in comprehensiveness; evolutionary increases in those variables were linked to a phenomenon we termed creeping rationality. In addition, the relationships that had been established between comprehensiveness and performance held for the years after the original studies. And exploratory analysis revealed significant across-industry differences in comprehensiveness.