Abstract:
This research report sets out to understand how senior managers in mining companies actually make strategic decisions when situations are classified as a dilemma.
This is of relevance because even though all organisations and all levels within an organisation are faced with decision making, the individual approach to reaching the decision varies. This is compounded by the nature of strategic decisions, technological advancements and the problem of bounded rationality. The concept of individual differences includes how much of human behaviour and the decisions people make is influenced by the person as opposed to the situation. The importance of individual differences in decision making and the approach followed escalates when the decision is of a strategic level as strategic decisions have cross-functional implications within the organisation, requires capital investment and has significant long term implications for the organisation. These implications become more critical when one considers the challenges facing the mining industry, which is characterised by volatility and falling demand and prices.
The research explored the types of dilemmas experienced by senior managers in the selected mining company and the approach followed to resolve the dilemma, views on the utility attached as well as factors that support good decision making culminating in the decision taken. To this end, a qualitative study with an explorative design was conducted with thirteen senior managers. The insights from these individual depth interviews formed the basis of the data that was analysed to produce the research findings
The research revealed that a dual approach is favoured with rational and quantitative styles dominating. The approach was linked to the impact of contextual variables such as the top management team and firm characteristics. This was found to also create implications relating to conflicts within the individual between the personal approach and the company required approach.
The research found that dilemmas relating to licence to mine and supporting or enabling the company strategy were dominant in the mining industry and resulted in key trade-offs of whether to manage for today versus manage for tomorrow and whether to maximise profit against creating value for a broader range of stakeholders.
