Question

The common view is that strategy analysis and choice largely involve making subjective
decisions based upon objective information, but this is not the case. Good strategic work
is methodical and highly objective; it uses a number of strategy formulation tools and
quantitative-based models like the External Factor Evalution Matrix, the Competitive
Profile Matrix, the Internal Factor Evaluation Matrix, the SWOT Matrix, the SPACE Matrix,
the BCG Matrix, the IE Matrix, and the QSPM or Quantitative Strategic Planning Matrix. If
the strategy formulation process is done correctly, and the numbers input into the tools
are sound, then the outcome should be scientific, and therefore objective.

true or false

Answer 1

To answer this query consider - Is subjectivity in strategy formulation necessarily bad? Is information from research data enough to guide and carry through strategies? Are strategic tools without any limitations?

Research brings in the numbers. Analysing these numbers through the use of strategic tools generates insights. But do these insights necessarily point to problems and their solutions? Or even, are these findings/insights absolute? The answer is NO. Remember, you can pursue information endlessly and yet reach no conclusion! Insights are irrelevant if not contextualized.

Every research starts with a research plan. You pre-determine the scope, the strategy, the audience, research area etc. starting from an idea (which is subjective). The results are then further scrutinized through the choice (again, subjective) of an appropriate strategic tool, based on the context. But don't forget, every tool has its limitations. For instance, the BCG matrix doesn't define the market properly and overlooks all indicators of profitability except growth rate and relative market share. The SWOT matrix is criticised for being too generic and unrealistic. QSPM is entirely dependent on its inputs and in fact, does require intuitive judgements (subjective) and assumptions to work!!

Simply put- we must appreciate that research findings and tool based insights need to be converted into clear and easily understandable ideas. Even so, it is out of the box thinking that leads us to success. In other words, you need to be creative and bold to make a difference. Any decision making requires both Logic and Intuition (triggered by past experiences, associations, thoughts and values etc.)... and Strategic decision making is no different in this regard. Remember, strategy formulation tools deliver only actionable insight, not action!!

However, the importance of research as well as strategic tools shouldn't be underestimated. Objectivity and subjectivity are both essential to good decision making and our endeavour should be to strike the right balance between the two. Guided decisions are almost always successful!