An Integrated Model for Decision-making under Uncertainty and Risk to Select Appropriate Strategy for a Company

Authors

1 Department of Industrial Engineering, Najafabad Branch, Islamic Azad University, Isfahan, Iran

2 Department of Industrial Engineering, Najafabad Branch, Islamic Azad University, Iran

Abstract

Recognition and select appropriate strategies to improve the condition of organizations in the eve of the crisis is important. Due to proper planning horizons in strategy-focused organizations, risk and decision making under uncertainty is greatly reduced. Therefore, it's necessary to specification and characterization the relationship between strategic management and risk management and select the best strategy of it. Accordingly, in this paper to demonstrate a direct correlation between the results of managerial strategic decision making and environmental analysis of organizations to find its strategic condition is used compilation model that both of them in order to inappropriate condition of organization are for selection the best option. The strategic areas identified by analyzing the internal and external environment of the organization, which includes the recognition of strengths, weaknesses, opportunities and threats with the help of SWOT Matrix. Finally, based on the criteria and methods of Wald classical approaches, Hurwicz, Maximax, Savage, Laplace, mean-variance decisions are based on expectations, the most likely conditions, Expected Opportunity Loss (EOL), the cost of uncertainty, the coefficient of variation and limits of responsibility, two strategies are determined by the choice of strategies. Also research has been conducted in Epic Arya Carton and the results are presented.

Keywords


Steiss, A. W. (Ed.). (2003). Strategic management for public and nonprofit organizations. Florida: Chemical Rubber Company Press.

Cox, M. Z., Daspit, J., McLaughlin, E., & Jones III, R. J. (2012). “Strategic Management: Is It an Academic Discipline?”, Journal of Business Strategies, Vol. 29, No. 1.

Blatstein, I. M. (2012). “Strategic Planning: Predicting or Shaping the Future?”, Organization Development Journal, Vol. 30, No. 2.

Nag, R., Hambrick, D. C., & Chen, M. J. (2007). “What is strategic management, really? Inductive derivation of a consensus definition of the field”, Strategic management journal, Vol. 28, No. 9, pp. 935-955.

Misankova. M, Kocisova. K. (2014). “Strategic implementation as a part of strategic management”, Procedia - Social and Behavioral Sciences, Vol. 110, No. 1, pp. 861–870.

Kopaneli, A. (2014). “Finance, Marketing, Management and Strategy Planning. A Qualitative Research Method Analysis of Case Studies in Business Hotels in Patras and in Athens”, Procedia Economics and Finance, Vol. 9, No. 1, pp. 472-487.

David, F.R. (2009). Strategic Management. Concepts and Cases. 12th ed. FT Prentice Hall, Vol. 40, No. 48, pp. 36-37.

Humphrey, A. (2005). “SWOT analysis for management consulting”, SRI Alumni Newsletter (SRI International).

Chichilnisky, G. (2000). “An axiomatic approach to choice under uncertainty with catastrophic risks”, Resource and Energy Economics, Vol. 22, No. 3, pp. 221-231.

Robert C. Shirley (1980). “Strategic Planning in the Higher-Education Setting”, National Center for Higher Education Management Systems, Boulder, CO.

Pearce, J. A., & Robinson, R. B. (2000). “Strategic management: Formulation, implementation, and control”, Irwin: McGraw-Hill, pp11-12.

Adizes, I. (1979). “Organizational passages—diagnosing and treating lifecycle problems of organizations”, Organizational dynamics, Vol. 8, No. 1, pp. 3-25.

Damghani, K. K., Taghavifard, M. T., & Moghaddam, R. T. (2009). “Decision Making Under Uncertain and Risky Situations”, In Enterprise Risk Management Symposium Monograph Society of Actuaries-Schaumburg, Illinois: Vol. 15.