The phases of the decision-making process

The results of the data analysis of the dimensions are presented in table 3. Based on the five dimensions and partly by the support of the secondary data, it is possible to draft the decision-making process and the participation of the different individuals and stakeholders in it. The decision-making process is presented in figure 2. The base of the decision-making process is the model of Mintzberg et al. (1976), which is presented in figure 1 as it is the most in-depth and detailed model of strategic decision-making in the business environment. However, the model presented in figure 2 is a developed and simplified version of the model of Mintzberg and his team, as that was the way the participants presented and preferred to discuss the decision-making process. To add, the original model by Mintzberg et al. (1976) has presented many optional paths for the decision processes, and according to the interviews, many of these optional steps or paths did not happen in the strategic decision-making processes of the case company.

As was discussed in chapter 4.3, the decision-making process is considered to consist of three major parts. The parts are the identification of the need, which can also be called a trigger for the decision, the information gathering and forming the decision or decision option, and then the last one is making the final decision. The process is informal, although often it includes the formality of asking for the acceptance or support for the decision from the higher levels of the organisation:

the more significant decisions, the higher is the level from where the approval is required.

The first phase of identification depends on the matter. There was consensus that anyone can raise an idea or a concern for a decision, especially for the market-related decision. The initiative is often wished to come from the field, such as sales personnel. However, for corporate-wide decisions, the trigger tends to come from the inside of the corporate level. The idea can be presented and even formed very precisely by the initiative-maker. The secondary data articles also identified that the decision-making process is different, depending on the category or the type of the decision.

50

Table 4: The summary of the key data results categorised as dimensions.

The second phase of information gathering can be passed, but it exists at least to some extent in most cases. According to the participants, the primary source for information is the initiative maker’s own knowledge. In their industry, the knowledge is gained often by working and experience. The second option for getting more information is to rely on documentation such as financial figures, case studies or other formerly produced material. The company has been working widely and long on the field and very globally; thus, they have very much internal and tacit knowledge of the market's needs and the environment. The third relevant and mainly used way to get information is to discuss with stakeholders, and colleagues close. It can happen formally by

Dimension Comments

Organisation • Very global

• Teams are geographically dispersed

• Legal entities and organisational entities are not identical

• Corporate, Business Area (BA), Business Unit (BU) and Business Lines (BL)

• Support functions such as sales and supply Decisions • Corporate decisions separated

• Tactic or strategic decision

• Sales, product, market, organisation, finance etc. decisions

• Different relevancy and impact for the whole corporation Process • First, the decision needs the trigger

• Second is the information gathering: discussion, market studies, reports, meeting

• As the last phase, the decision-makers choose the best solution from the options

Decision-makers • CEO and the board, together with the executive team, make the corporate-level decisions

• BA has the responsibility of the industry level decisions

• The BUs have the responsibility of the

Internationality • Geographical closeness helps to form an informal relationship

• People primarily rely on the contacts they know, who often tend to be close

• The international stakeholders may be formally heard but not necessarily involved in the decision-making

51

placing the need on the management meeting agenda or, more informally, by having a call with a colleague. Commonly, the matters are discussed with closer people, such as colleagues with whom they often operate. However, if the question or need is particular, for example, a country-related market question, the participants did not feel difficult to contact some more distant colleague if they considered them an expert. External, especially very structured information gathering such as research studies, was not very often used, mainly if those were very relevant for the topic. As the company is significant in their field, they can do their market or case studies internally, which are often used. To conclude, the use of different information gathering methods were used depending on the need and relevance and secondary what is the most efficient financially and timely to support the decision-making.

Figure 2: The strategic decision-making process and the sub-unit participation

The last phase of decision-making is the phase final decision. Simply in this phase, the responsibility for the decision makes it and executes it. The participants discussed two final decision-making points, formal and informal. As many MNEs, also the case company must follow corporate governance requirements, which often requires internal approval processes. In the case of strategic decision-making, the decisions sometimes require approval from the upper level or

52

levels of the organisation, depending on the scope of the decision. That is the formal side of the decision-making. Some of the participants pointed out that it is often just nominal, and the upper levels such as the business area or executive team usually approve the decisions as presented and trust that the actual and informal decision-makers have analysed the options well enough. The informal side of decision-making varies depending on if the decision is made jointly (i.e., in the management team) or by an individual. The individual tends to decide faster without any processes, but joint decisions are often discussed and decided in meetings. Making the final decision in both ways requires weighing the options, costs, and consequences. The participants emphasised that the base of choosing some decision is in the financial figures, potential and also in the strategic importance. Some participants brought up the non-rational aspects of making, such as culture and environment and the personal history and preferences of the decision-maker.