Types of Decision

TYPES OF DECISIONS:
Managers would be overwhelmed with decision making if each situation had to be treated as novel, that is, new. Fortunately this is not so. Managerial decisions can be programmed or non - programmed.
Programmed decisions: Programmed decisions are made in routine, repetitive, well-structured situations with predetermined decision rules. These may be based on habit, or established policies, rules and procedures and stem from prior experience or technical knowledge about what works or does not work in a given situation.
for example, the fighting and civil services and, in industry, production areas. These decisions can be taken by relatively junior staff, and some can be executed by computers or even by servo-mechanisms – the speed-control mechanism on a clockwork motor, for instance. Many programmed decisions are derived from established practices and procedures or habit. Computers are an ideal tool for dealing with several kinds of complex programmed decisions.
Most of the decisions made by first-line managers and many by middle managers.
For example, organizations often have standardized routines for handling customer complaints or employee discipline. Decisions are programmed to the extent that they are repetitive and routine and that a definite approach has been worked out for handling them. Because the problem is well-structured, the manager does not have to go to the trouble and expense of working through an involved decision making process.
Non-programmed decisions: Non-programmed decisions are unique decisions that require a 'custom made' solution. This is when a manager is confronted with an ill-structured or novel problem and there is no 'cut and dried solution'. The creation of a marketing strategy for a new service represents an example of a non-programmed decision. IBM Australia's introduction of a personal computer in the 1980s was unlike any other decision the company had previously made. Non programmed decisions are typically one shot decisions that are usually less structured than programmed decision. These decisions deal with new areas and new problems, and are the main pre-occupation of senior managers – or at least they should be!