The effects of the economic crisis on the distribution of strategic decision-making authority

Understanding the dynamics of decision-making in the right way is an important problem for the management of organizations. In today?s business life, organizations are becoming larger and more complex, and the environments are becoming increasingly uncertain. Effective decision-making in this world of growing dynamic complexity requires an expansion in the boundaries of existing mental models and development of additional tools to better understand how organizations behave as complex systems.The aim of this study is to contribute to the understanding of the dynamics of managerial decision-making process in complex internal and external environments. By taking the organizational levels into consideration, the research includes one of the important dimensions of complex internal environment which is the organizational structure. Complex external environment is reflected within the study as economic crisis.With the use of an empirical study in the Turkish organization of a large global company, this study investigates decision-making process to understand how decision-making authority for different types of decisions, identified as strategic, tactical, and operational level decisions, are distributed throughout the organization levels, and, analyzes the effect of economic crisis on this distribution.The results of the empirical study confirm the following two common expectations: (1) Strategic decisions are mostly taken at upper hierarchical levels of the organizational structure; and, (2) during times of economic crisis strategic decision-making is centralized, and distribution of decision-making authority is concentrated at upper management levels.By providing a comprehensive and easy-to-apply research tool for the assessment of changes in the distribution of decision-making authority at differing environmental conditions, this study may have significant contributions to the effective management of business organizations and related academic research.