ARTICLE: 7 Types of Decision Making in Organisation

Every manager has to make decisions while working in an organisation. But there is difference in their importance and nature. The decisions are made for resolving some repetitive problems while others are made for the solution of non-repetitive problems. Sometimes, the decisions are made at the individual level to exercise the authority of the managers. There are some decisions that are made on the base of the groups. There are different features of decision making and you must read 10 features of decision-making in organisation by clicking on the link mentioned.

In this article, we will discuss the different types of decision-making:

  • Tactical and strategic decisions

These are the decisions which have to be made by the managers again and again in accordance with some policies formulated and the rules and regulations of the organisation. These types of decisions have the repetitive nature, and these are related to the general functions of the company. The managers delegate the authority of taking tactical decisions to the management at a lower level.

Strategic decisions are quite difficult than the tactical decisions. These decisions have an impact on the future of the organisation, and the whole organisation is involved in these types of decisions. These also include the decisions like targets of the business, expenditure on capital, the layout of the plant and the activities related to production etc.

  • Programmed and non-programmed decisions

These are the decisions that are based on the routine activities and repeat on a regular basis. Programmed decisions are based on the routines, and there is a systematic process that for taking these types of decisions so that if there is a problem, it would not be considered as something very serious or new.

Then, there are non-programmed decisions that are complicated, and they have to be treated as specific. There are some problems that do not require the set of rules and regulations to form, but there is the requirement of studying the causes of the problems so that there can be a proper solution. The manager has to study the facts and analyse all the factors that are influencing the situation to look for the possible solutions and then to choose the best one.

  • Routine decisions and basic decisions

The decisions are also classified as routine and basic by prof. Katona. Basic decisions are very important for the organisation, and they need a great deal of deliberation. There is the need to form new norms by having a thought process after the brainstorming session. For instance, we can talk about the location of the plant, modification of the plant and to select the distribution channels.

On the other hand, routine decisions have the repetitive nature, and hence, it also needs the consideration of the relative facts. Basic types of decisions are related to the aspects of strategy, and routine decisions relate to the aspects that are tactical in an organisation.

  • Personal and organisational decisions

The organisational decisions include the tasks of the executives that are under the control of the manager. These are the authorities of the managers, and some of them can be delegated to others. And if we talk about personal decisions, which are under the control of the manager but those decisions are not related to the organisation. They are about the personal interest of the managers.

  • Planned decisions and unplanned decisions

Planned decisions are the one that has some objective related to the organisation. These are the decisions that have some facts in it, and it also requires the planning with the help of the tactics. There is some process involved in the solving the problems of the company.

The unplanned decisions are those that are taken suddenly at the moment. These are for the organisation and can also be taken easily. It does not need any analysis or study of the facts.

  • Policy and operating decisions

Policy decisions are those that are taken by the top level management, and they have basic features that affect the working and operations of the decisions of the entire organisations. The operating decisions are those that are taken by the lower management on the basis of the policies of the company. These are decisions that are related to the own work of the one who is making decisions while there is the influence of behaviour of the pattern or the policy for the subordinates.

Policy decisions, administrative decisions and executive decisions

Policy decisions are those taken by the top level management of the company. These are related to the major issues of the company and the policies. For instance, we can talk about the structure of the finances, policies related to the marketing techniques, the structure of the organisation.

  • Administrative decisions

The administrative decisions are based on the middle-level management. These are not that important for the company, and it involves the measurement of the size that includes the advertising media.

  • Executive decisions

These are those decisions that are made when the manager carry on a particular work. The major difference between these three decisions according to the author Mr Dales is that the policy decisions are helpful in setting goals for the future and the complete course of action. On the other hand, administrative decisions are based on the means going to be used in the organisation, and executive decisions are based on the daily basis as per the situation.

Therefore, these are the decisions that might be the daily work or might not be. But these require proper study of the facts before taking a step ahead towards them.