Chetan Walia Will Publish New Management Book: Strategic Brilliance
ABSTRACT OF THE RESEARCH
Family Dictates Thought Worlds in Strategic Decision Making in FOB
Within a single organisation, multiple thought worlds exist, all of which are required to innovate and strategise for growth. The four thought worlds prevalent within leadership teams may be technical thought world(specialist), the field thought world (client facing), the planning thought world (marketing), and the manufacturing thought world (implementers).
Strategic decision making (SDM) in firms is an outcome of a negotiated order between different thought worlds in top management teams (TMT). The influencing factors on the negotiated order are the pressures of external demands, for e.g., competitive forces.
Within family owned businesses (FOB), our research has observed a fifth thought world that is the family (owner) itself. The family within SDM has a stakeholder salience predominantly to the shareholder, which is the family. This is different from the rest of the TMT, which may have stakeholder salience to shareholders, employees, and customers.
Success of a firm has been linked to TMT decisions, and constructive conflicts between thought worlds is seen as necessary for effective SDM.
In our research, the TMT is observed to adjust to the demands of the family thought world, without negotiating its strategic concerns, and aligning to implement objectives that may even be contrary to the ones proposed by the TMT itself. This has serious consequences because genuine strategic issues were left unresolved in favour of short-term profit objectives. This could hurt the long-term sustainability of the business.