Issues in Strategic Decision Modelling

Models are invaluable tools for strategic planning. Models help key decision makers develop a shared conceptual understanding of complex decisions, identify sensitivity factors and test management scenarios. Different modelling approaches are specialist areas in themselves. Model development can be onerous, expensive, time consuming, and often bewildering. It is also an iterative process where the true magnitude of the effort, time and data required is often not fully understood until well into the process. This paper explores the traditional approaches to strategic planning modelling commonly used in organisations and considers the application of a real-options approach to match and benefit from the increasing uncertainty in today’s rapidly changing world.