The Early Bird Catches the Worm or Decide in Haste and Repent at Leisure?

Abstract

Rapid technological innovation, shortening product life cycles, and increasingly fierce competition place great pressure on top managers to execute rapid strategic change. A key question in strategic management though, is whether decision speed helps or harms the quality of top management team strategic decision-making? There is a shortage of theory and evidence concerning the consequences of decision speed across different environmental contexts, owing to prior research focusing solely on the effects of speed in dynamic environments. We propose and test a model that shows the effects of decision speed under conditions of environmental hostility, munificence, and dynamism, as well as the joint conditions of hostility-munificence and dynamism. We do so because environments are multidimensional, and an environment which is dynamic and hostile is very different to one which is dynamic and munificent. Analyzing dyadic data from multiple top managers on 117 strategic decisions, we demonstrate that decision speed has both positive and negative effects on decision quality according to different combinations of environmental hostility, munificence, and dynamism. Our findings help overcome a major obstacle hindering theory development by providing new theoretical insights into the implications of decision speed across multiple different environmental contexts.