Theories and Models in Strategic Decisions

Running head: THEORIES-MODELS IN STRATEGIC DECISIONS
Strategy Decision-Making
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THEORIES-MODELS, SUSTAINABILITY IN MAKING DECISIONS 2
Rhineland Model vs. Anglo‐Saxon model
The Rhineland Model stipulates the sharing of information as well as building consensus
among all the people connected with the organization in order to permit long-term coordinated
economic and social objectives. The models set the high-income taxes but business is not taxed
heavily and has no protection-the end result is high paying employments which can now get
taxed so as to get the welfare of the state running. Additionally, besides shares and bonds, banks
get used as a main source of funds. The decision made are far-reaching, envisaged big
businesses, huge labor, and the government plans are big so that all are for the best good and in a
planned manner (Kantabutra, 2017).
The Anglo‐Saxon model, on the other hand, characterizes the undertaking of individual
or organization’s interests with no or very minimal intervention from the government. The model
exists in free market economies and most advanced nations. The system places the interests of
the stakeholders and labor below that of the shareholders and the top management. The
information that is uneven becomes the origin of estimation as well as profits, and the strategy is
concentrated on the running of short-run trade cycle. The basis of the model is strong property
rights as well as the enforcement of contract with low hindrances to free trade. It is established
that undertaking business in nations employing this model is easier because of few regulations
concerning labor markets. The weakness associated with the Anglo‐Saxon model is the failure of
the market emanates due to imperfect facts and instability when there is no national agenda in the
long-term run (Schiffels, Haak, Paajanen, Llamas, Popescu, Loe & Tyler-Smith, 2016).
Shareholder Theory vs. Stakeholder Theory
The shareholder theory posits that the managers of an establishment have the duty of
minimizing the returns of the shareholder. In relation to the theory, companies have the sole

THEORIES-MODELS, SUSTAINABILITY IN MAKING DECISIONS 3
responsibility of the stakeholders because of the evolving nature of the business’s pyramid. The
stakeholders set the remunerations of the managers and the managers have the role of making the
spending plans of the organization and this have to be in tandem with the objectives of the
shareholders (Visser, 2019).
The stakeholder theory states that the managers of an organization have an ethical role to
the stakeholders as well as all the entities linked to the organization. These comprise entities and
individual who benefit from the organization or those that the organization benefits from them.
Therefore in making decisions, an establishment needs to put the interests of all the stakeholders
(Cooper, 2017).
There is a misconception of the theories. In the stakeholder theory, it is misunderstood
that managers must employ any mean to ensure profits for the organization including unethical
practices as well as prohibiting CSR initiatives. This is not the case since the structure of the
organization gets based on ethical principles as well as CSR task to the society. The stakeholder
theory is misconceived and presumed that profits should be disregarded; however, profit is the
main aspect that needs consideration in determining the company’s impact on the stakeholders
(Visser, 2019).
The Concept of sustainability
Sustainability is a concept employed in business enterprises to ensure that there is an
application of good practices for the common good of humanity and the planet. It posits that an
establishment has the mandate of using the endowed resources in a maximum manner without
wastage and conserving for the benefit of the future generation (Bhamra & Lofthouse, 2016).
The concept of sustainability encourages establishment to come up with long-term goals that put
into consideration carbon footprint reduction in all the operations of doing business while