Strategic Decision-Making in Born Global Organizations - Research Proposal Example

Research Methods

Introduction

Strategic decision-making is essential in every organization. In particular, strategic decision-making is very important to the born global organizations. Decision-making is a challenge to the born global organizations in ensuring that they achieve international growth rapidly. The challenge is due to the great extent of unpredictability that confronts the managers and businesspersons in these organizations and the pressure of making the right strategic decisions within a short time. Very few studies have been done on decision-making in born global organizations. The focus of most studies is usually the outcomes of decisions made in their internationalization strategy than the decision-making itself and hence there exist a gap in these studies (Nummela et al., 2014, p.528). The topic of decision making in born global organizations is selected so as to address the gap that exists in studies on decisions-making. This research paper will look at strategic decision-making in born global organizations.

Research questions

i. How does the process of making decisions evolve in born global organizations?

ii. Who is involved in decision making in born global organizations?

iii. What logic is applied in the decision making?

iv. What causes a change in the process of decision making?

Research objective

i. To determine the process that is applied in born global organizations in their decision making.

ii. To find out the people or shareholders who are involved in the decision making in an organization.

iii. To investigate on the different kinds of logics that global organization applies in their decision making.

iv. To find out what usually triggers a change to be done by organizations in the process in which their make decisions.

Literature review

Strategic decision-making is a continuous process applied by organizations and which encompasses the creation of strategies which assist the organization in the achievement of goals and objectives as well as in altering set strategies on the basis of some observed outcomes (Hamel, 2016, p.1). Unlike other types of decisions such as tactical and operational decisions, strategic decisions are complex and their making is done by the senior management of an organization (BBC, 2014, P.1).

A born global organization is a business organization in which, from its establishment, it aims is to achieve high competitive power from their utilization of resources and production of resources among several countries (Frynas & Mellahi, 2015, p.153). From their establishment, born global organizations know that their competition and customers are international (Gillespie, 2010, p.224). Born global organizations are characterized by small to medium sized business, hi-tech and highly skilled decision makers. The decision makers in born global organizations are expected to have international experience, high tolerance to risk among other characteristics (Frynas & Mellahi, 2015, p.163).

The decision making in born global organizations is in most times done on the basis of intuition and inadequate information. This is as a result of the rapid evolution of the competitive landscape of the born global organizations. Born global organizations rarely apply the strategy of making a decision and then waiting to see the outcome of it. Decision making in the born global organization is complex due to the uncertainties and goal ambiguity that a decision made may have (Nummela et al., 2014, p.531).

Methodologies

The approach used in the research is a multiple-case study. The multiple-study assists in responding to calls on studies to be done on internalization across several countries (Terjesen, Hessels & Li, 2014, p.1).The data is collected from several countries, that is, Ireland, Finland, and Israel. The data is collected from three software firms, each from the three countries. The three companies are Blancco, BriefCam, and TextHelp. The three software companies are born global organizations. The selection of the three cases was done through theoretical sampling. Data is collected in real time. The collection of data is done through the conduction of face-to-face interviews in which their transcription is done later. The people who are interviewed include those who make decisions in their respective companies. To supplement the data collected from the interviews, data is also collected from each of the company’s internal and external environments, for instance, from the companies’ website, business plan, public database, press release among other sources (Nummela et al., 2014, p. 537).

Discussion of finding

The findings from the three born global organizations indicated various similarities in their decision making. However, there exists some considerable amount of differences between them. The following are the discussion of the findings from each of the born global organizations;

Blancco

The decision for the production of the current product produced by Blancco Ltd was triggered by a discussion in one of the newspaper in the company’s home country, Finland. The founders of the company become conscious that their product had a potential to expand globally. From the data obtained, it was found that most of the decisions in the company were made by the founders and the company’s board. The board comprised members of the company and external members who have a vast experience in business. Initially, the company used the effectuation logic in making decisions. However, later, they started using the causation logic after they launched their first product. The causation logic required the company to collect information of the market and to make estimates of the expected results before making a decision (Nummela et al., 2014, p.539).The inclusion of a new member changed the making of decisions in the company. This was important to the company since the incorporation a new member, who is not a residence of the company’s home country, in the decision-making board helped in settling at a decision using several perceptive (Nummela et al., 2014, p.540).

BriefCam

BriefCam is a born global organization founded in 2007 by three people. The logic used in decision making in the company can be evaluated in two perceptive. First, the causation logic is used in making decisions that are related to the technology and the product. The logic is used due to the existence of predictability and knowledge. Secondly, the effectuation logic is used in decision making relating to the business and the market. This means that the logic applied by the company depended on the kind of decision that needed to be made. Initially, the decisions were made by the founders together with the company’s board. However, the company recruited a CEO in the organization who provided the company with more professionalism in the decision making. The CEO made the company focus more on causation-based logic in decision-making (Nummela et al., 2014, p.542).

TextHelp

TextHelp is a company founded in the year 1996 and which focuses on software solutions. The initial logic applied by the company in decision-making is the effectuation-based. However, the company turned to the causation-based logic later. The company has a record in which one of the decision-makers had to leave the company as a result of not being satisfied by a decision made by the company. The member who left the company was one of the founding members. He was replaced by a new CEO, who boosted the causation logic in decision making. Three divisions were formed in the company, that is, speech, education and corporate. Each individual in the three divisions assisted in making decisions that are related to their respective divisions. Even with the new CEO’s enforcement of the causation logic, some features of effectuation logic remained (Nummela et al., 2014, p.543).

Conclusion

Clearly, in the case studies, the logic of decision making is seen to change to causation-based from the effectuation-based which is the initial logic applied by the born global companies. The CEO is the main decision maker in the companies. However, there are several other people involved in the decision-making process. A background in management contributes to the adoption of the logic that an organization will apply. People who have a vast experience in business tend to prefer the causation logic more than those who have little experience in the business. However, it is evident from the three companies that the two logics can co-exist. For example, in the BriefCam, the two logics are used simultaneously depending on the kind of decision that needs to be undertaken (Nummela et al., 2014, p.547).

A change in the decision-making logic can be triggered by a number of factors. First, a company is bound to change its decision-making logic when a key person who is involved in the decision-making leaves. This is evident in the TextHelp case study whereby the logic is changed as soon as one of the key decision-makers steps down. Secondly, a company can change the logic in case the company is searching for external funding. This two actions can lead to different outcomes been obtained when they are made (Nummela et al., 2014, p.547). Therefore, it is clear that the decision making is flexible (Anderson, 2011, p.627). However, it is unclear whether the companies choose the logic or the change of the logic is driven by the current situation of the organization. The management at the born global organizations is under a substantial time pressure when they are making decisions due to the limited amount of opportunities and the unpredictability nature of the market (Gabrielsson & Gabrielsson, 2013, p. 1357).

A company is bound to be successful if a balance exists between inherently two types of decision-making logic, that is, the causation and effectuation. The company’s internal stakeholders including the decision makers are responsible for maintaining a balance between the two logics for the achievement of success. However, it is essential for the incorporation of external stakeholders to be involved in the decision-making process. Effective decision making is particularly very important especially within beginning phases of internationalization of the born universal organizations due to the much flexibility that characterizes the born global organizations at that stage. Before any decision is made, it is essential to collect an adequate amount of information about the market. This will increase the accuracy of the decisions that are made. A company should consider the impact that a change in the top management personnel would have on the company’s decision-making logic and process (Nummela et al., 548). Cleary, decision making is very important to an organization. It is recommendable for all the organization to incorporate people with a vast experience in the decision-making team since they make a huge contribution to the application of the right rationale for decision-making within any organization.