Department Of Business Administration
Dr. Rakesh Ranjan
BBA Sem -5
Decision and type of decisions
Decision making is involved in every walk of life; it is relevant in
organizational as well as non-organisational context. In
organizational context. decisions may vary from major ones like
determination of organizational objectives or deciding about
major projects to specific decisions about day-to-day operations.
Therefore, there are different decisions which are made by
managers in the organizations.
There are different ways in which decisions may be classified.
One way of classifying these decisions is to group them into
routine and non-routine. In another way, these decisions are
classified as programmed and non-programmed. These are
further classified as strategic and tactical or operational decisions.
Strategic decisions are non-programmed and non routine while
tactical (also known as operational) decisions are mostly routine
and programmed.
TYPES OF DECISIONS
Programmed Decision
A programmed decision. also known as structured decision. is
routine and repetitive and is made within the framework of
organizational policies and rules. These policies and rules are
established well in advance. to solve recurring problems in the
organization. For example. The problem relating to promotion of
employees is solved by promoting those employees who meet
promotion criteria. These criteria are established by promotion
policy and the managers have just to decide which employees
meet promotion criteria and the decision is made accordingly.
Programmed decisions are comparatively easier to make as these
relate to the problems which are solved by considering internal
organisational factors. Such decisions are made by managers at
comparatively lower levels where the factors affecting decision
making are static and well-structured.
Non-programmed Decision
A non-programmed decision. also known as unstructured decision
is relevant for solving unique/unusual problem in which various
alternatives cannot be decided in advance. For such a decision.
the situation is not well-structured and the outcomes of various
alternatives cannot be arranged in advance. For example, if an
organisation wants to take actions for growth, it may have
several alternative routes like going for a grass-route project or
taking over an existing company. In each situation. the managers
have to evaluate the likely outcomes of each alternative to arrive
at a decision. For evaluating the likely outcomes of these
alternatives. The managers have to consider various factors,
many of which lie outside the organisation. A common feature of
non-programmed decisions is that they are novel and
nonrecurring and, therefore, readymade solutions are not
available. Since these decisions are of high importance because of
their long-term consequences, these are made by managers at
higher levels in the organisation.
Semi-programmed decisions :
In these types of decision, at least one but not more than two of
the above stages can be handled by a well defined preset
procedure. An example of such a decision is the intelligence
phase, which is well structured, having diverse kinds of variance
analysis. Here a comparison with a budget is undertaken in a well
defined way to indicate the need for a decision. Subsequent
stages of design and choice are, however, not handled by any set
procedure
DECISION-MAKING CONDITIONS
Decision making involves selection of an alternatives which is put
into action and whose impact is known in future period. Thus, the
decision maker makes the decision for future conditions. In fact.
a decision is not a process of making the future decision but a
means of reflecting the future in today's decision. The future
conditions for a decision vary along a continuum ranging from
condition of perfect certainty to condition of complete uncertainty
as In each of these conditions, knowledge of outcome of the
decision differs. An outcome defines what will happen if a
particular alternative or course of action is chosen and
implemented. Knowledge of outcome of each decision alternative
is important when there are
multiple alternatives and only one alternative is to be chosen. In
the analysis for decision making, three types of knowledge with
respect to outcomes are usually distinguished as shown in Table.
-------------------------------------------X--------------------------------------------
