Strategic decision-making process (SDMP) in times of crisis: Evidence from Greek banks

Abstract

This paper investigates the strategic decision-making process (SDMP) of Greek banks' top management in the context of profound organisational changes introduced in 2012 as a result of the 2008 global financial crisis. It focuses on the impact of three key dimensions of the SDMP, namely, rationality, intuition and political behaviour, relating to four changes introduced, namely, acquisitions, branch network rationalisation, integration of information technology (IT) and downsizing of operations and personnel. A questionnaire-based survey was conducted, targeting Greek banks' top management. Out of 140 questionnaires, 78 were returned, a 55.71% response rate. Data was analysed using structural equation modelling. Research findings identify rationality as a key dimension of SDMP for all organisational changes, as there was high focus on identifying and analysing all required information, use of external financial advisors, and reliance on multiple methods of information gathering. Decision-makers used their intuition in the form of past experience when making acquisition decisions, whilst their personal judgment and "inner voice" were neglected. Finally, political behaviour was not displayed during this process, as decision-makers were open with each other about their interests and preferences, and there was no bargaining, negotiation or use of power amongst them. One limitation was that of not considering all the factors that might help measure SDMP characteristics. Also, this study was conducted in a period of political and financial uncertainty for Greek banks, as well as for the Greek economy in general, so findings may not be generalizable to other industries and countries. Conducting interviews could have offered deeper insight as well. This study's value lies in the fact that the organisational changes were determined by Greece's leaders, and thus the Greek banks had to operate under a dynamic, inflexible and non-autonomous environment. Also, this study extends prior SDMP research by examining the impact of the three key SDMP dimensions on four types of organisational change.

Strategic Decision Process in SME’s Context: A New Perspective Using Indigenous, Institution, Firm, and Environment Characteristics

“…Second, this study used one decision-making dimension that makes it more specific than other studies that utilised various decision types to measure decision-making (Aravopoulou et al, 2018;Elbanna & Child, 2007;Shepherd et al, 2015). Ahmad (1990) as well as Hughes, Tippet & Thomas (2004) explained the way in which important project decisions were essential for a construction company's survival.…”

“…They constitute the condition or situation in which a decision is taken (Ashraf, Hassan, Ghafoor & Aslam, 2015;Dess & Beard, 1984;Elbanna, 2015;Elbanna & Child, 2007;Papadakis, 1998). Elbanna (2015) explained the important factor of the environment with respect to decision-making, while several studies have established the important factors of the same (Aravopoulou, 2018;Garvin, 2009;Gigerenzer & Marewski, 2015;Papadakis, 2006;Price & Newson, 2003). The previous studies argue that the condition of the environment prolongs a firm's capability to set the best price with regard to a project decision (Bageis & Fortune, 2009;Oo, Lo & Lim, 2012).…”

The use of information management towards strategic decision effectiveness in higher education institutions in the context of Bahrain

“…In Figure 1, the effects of contextual factors are mediated by decision process characteristics, including comprehensiveness/rationality, rule formalization, hierarchical decentralization, lateral communication, politicization and intuition (Elbanna, 2006;Papadakis and Lyriotaki, 2013). Rationality, intuition and political behaviour in SDMPs have been linked to organizational performance and decision-specific characteristics such as the magnitude of decision impact Child, 2007a, 2007b;Nooraie, 2014;Papadakis et al, 1998;Aravopoulou et al, 2018;Parnell et al, 2018;Stone et al, 2019). No studies have simultaneously used rationality and intuition or decentralization as decision-making process variables.…”

“…The conceptual model HEIs have struggled to respond appropriately to change and instability in their environment. The lack of SDMPs has led HEIs to make decisions either ad hoc or unscientifically, leading to ineffective strategies and execution (Papadakis et al, 1998;Aravopoulou et al, 2018;Parnell et al, 2018;Stone et al, 2019). Evidence of failure in implementation might dissuade HEIs from developing strategic plans (Birnbaum, 2001), and thus, the concepts of strategic planning and SDMPs in HEIs require further investigation Use of information management (Immordino et al, 2016) to understand what decision-making process mechanisms could be used by HEIs to negotiate these challenges.…”

“…The literature on how decision context, such as decision importance, influences decision process characteristics, taking into account organizational and environmental contexts, is sparse (Papadakis et al, 1998;Aravopoulou et al, 2018;Parnell et al, 2018;Stone et al, 2019). Thus, a study of decision importance as a factor influencing decision process characteristics (i.e.…”