Many things expose our poor record of decision-making: the divorce rate (50%+), failed mergers (87%), hiring incompetent employees, closets filled with unused items, conflicts between business partners, people choosing drug addiction, stealing, shootings, etc. Why do we make so many poor decisions? Because smart decisions is an advanced skill requiring explicit learning and practice. We humans have an astonishing weak and miserable history in making intelligent decisions. This is because such decisions will affect the entire functioning of the organization and are very crucial and significant in nature.What’s the quality of your decisions? How well do your decisions turn out in creating a high quality success in achieving your goals? Do you feel proud and confident that you can make intelligent decisions? Ultimately, the quality of your life is the quality of your decisions. A strategic decision is taken by top-level managers after a lot of analysis, study, and fact-finding. True or False?Īns: This statement is True. Q: Strategic decisions need analysis and in-depth study. For example, decisions taken by the board of directors are a group decision. Group decisions are taken by a group or a collective of the firm’s employees and management. Organizations that are smaller and have an autocratic style of management rely on such decisions. Any decision taken by an individual in an official capacity it is an individual decision. When talking about types of decisions, let us see individual and group decisions. Obviously, these decisions cannot be delegated. However, if the executive takes a decision in a personal capacity, that does not relate to the organization in any way this is a personal decision. Such decisions can be delegated to subordinates. When an executive takes a decision in an official capacity, on behalf of the organization, this is an organizational decision. Organizational Decisions and Personal Decisions However, the calculation and implementation of such bonus issue is an operating decision. Such decisions are usually taken by middle and lower management. These decisions help implement the plans and policies taken by the high-level managers. Operating decisions are the decisions necessary to put the policy decisions into action. They have a long term impact on the firm and require a great deal of analysis. Such decisions are usually reserved for the firm’s top management officials. Tactical decisions pertaining to the policy and planning of the firm are known as policy decisions. Learn more about Quantitative Techniques of Decision Making here in detail Policy Decisions and Operating Decisions For example, opening a new branch office will be a non-programmed decision. Such decisions are left to upper management. Usually, these decisions are important to the organization. So there is no standard procedure or process to deal with such issues. these are not routine or daily occurrences. Non-programmed decisions arise out of unstructured problems, i.e. These decisions are usually taken by lower management.įor example, granting leave to employees, purchasing spare parts etc are programmed decisions where a specific procedure is followed. These decisions are dealt with by following a specific standard procedure. Programmed decisions relate to those functions that are repetitive in nature. Programmed Decisions and Non-Programmed Decisions Because strategic decisions taken at this level will affect the routine decisions taken daily. Hence such decisions require analysis and careful study. They usually relate to the policies of the firm or the strategic plan for the future. These are usually taken by upper and middle-level management. On the other hand, strategic decisions are the important decisions of the firm. In fact, high-level managers usually delegate these decisions to their subordinates. Such decisions do not require a lot of evaluation, analysis or in-depth study. Strategic Decisions and Routine DecisionsĪs the name suggests, routine decisions are those that the manager makes in the daily functioning of the organization, i.e.
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