The Strategic Difference


Why do strategic decisions differ from other kinds of decisions?

Gary's Answer: 

I assume you are using the term “strategic” in the formal sense, as it is used among those who study, write, and teach strategy, not in the dictionary sense. The dictionary describes how a word is used by the general public. Words like “strategy” are used so broadly as to be meaningless. You can see the other answers posted to your question. 

So let us start with a more formal definition of strategy. Strategy is the optimal decision-making of independent and competing actors in a competitive environment. In game theory, it is a course of action a player will take given the set of circumstances that might arise within the game.

We can simplify this by saying that, as human beings, we make decisions in two environments: controlled environments and competitive environments. No environment is completely controlled or completely competitive but these are the two extremes.

Controlled environments are those where we a measure of control over the resources involved and what happens. A factory or a kitchen are good examples. In a controlled environment, we do not have to worry about the choices of other actors. This means that we can plan, in the sense of making up a to-do list before acting and executing it. For example, we can choose to bake a cake. Given the ingredients we have on hand, we can choose what kind of cake to make, how much to make, how to decorate it, and so on. We can then execute our plan.  Factories operate on the same principle, simply uniting more people toward a single goal.

Competitive environments are those where all outcomes depend on the actions of other actors , who all have their own goals.In competitive environments, plans collide, creating situations that no one planned. These environments are unbounded and unpredictable. Therefore, they require a different form of decision making rather than plans. As it has been said, "Plans do not survive the first contact with the enemy. Strategic decisions must that take into account the possible actions and reactions of others. They must continually adapt to changing conditions. 

In school, you were taught only planning for controlled environment. School iitself s a controlled environment, with all its competitive aspects intentionally minimized. The challenges you were given were controlled, planned, and predictable.. Any decision-making that you were taught was within the context of a working in a controlled environment. The school system itself was designed to produce factory workers and managers.

It was very unlikely that you were taught any useful knowledge about strategic-decision making. What strategic skills you learned, you learned by trial and error, in social competition, sports competition, classroom competition, and so on.

However, the systems used for better decision making in competitive environments are very sophisticated, revolving around understanding competitive positions and how they are advanced. For more, see the articles under