Strategic decision speed and firm performance

This 4-year study examines the effect of strategic decision speed upon subsequent firm performance and identifies environmental and organizational characteristics that related to decision speed. We draw upon strategic decision-making theory and organization theory to propose that strategic decision speed mediates the relation between environmental and organizational characteristics and performance. Measures of business environment, organization structure, strategic decision speed, and firm performance (growth and profitability) were collected from 318 CEOs from 1996 to 2000. Structural equation modeling confirmed that fast strategic decision-making predicts subsequent firm growth and profit and mediates the relation of dynamism, munificence, centralization, and formalism with firm performance. Copyright (C) 2003 John Wiley Sons, Ltd.