Types of Managerial Decision

Types of Managerial Decision

1. Routine and Strategic Decisions Tactical or routine decisions are made repetitively following certain established rules, procedures and policies. They neither require collection of new data nor conferring with people. Thus they can be taken without much deliberation. They may be complicated but are always one dimensional. They do not require any special effort by the manager. Such decisions are generally taken by the managers at the middle and lower management level.

Strategic or basic decisions , on the other hand are important and so they are taken generally by the top management and middle management. The higher the level of a manager, the more strategic decisions he is required to take. The strategic decisions relate to policy matters and so require a through fact finding and analysis of the possible alternatives. Finding the correct problem in such decisions assumes great importance. The managers are more serious about such decisions as they influence the decision making at the lower levels.

2. Programmed/Structured Decision and Non Programmed / Unstructured Decision

They are routine and repetitive nature which is to be dealt with according to specific procedure. If an employee takes leave the manager can grant leave by approving the formal leave procedure. But if a majority employee takes leave the manger cannot take a routine procedure because all the employees taking leave at a time is not a routine problem.

These decisions are taken because of unstructured problem. There is no standard procedure for handling such problems. When all the employees take leave without any permission on a particular day is an unstructured problem. These non programmed decisions require through study of the problem and scientific study of the situational factors.

3. Policy and Operating Decisions Policy decisions are of vital importance and are taken by the top management. They affect the entire enterprise. But operating decisions are taken by the lower management in order to put in to action the policy decisions. For example, a bonus issue is a policy matter which is decided by the top management, but the calculations of bonus issue is an operating decision which is taken at the lower levels to execute the policy decisions.

4. Organisational and Personal Decisions Organisational decisions are those which a manager takes in his official capacity. Such decisions can be delegated. But personal decisions, which relate to the manager as an individual and not as a member of the organisation, cannot be delegated.

5. Individual and Group Decisions When a decision is taken by an individual in the organisation, it is known as individual decision. Such decisions are generally taken in small organisations and in those organisations where autocratic style of management prevails. Group or collective decisions refer to the decisions which are taken by a group of organisational members, say board of directors (or) committee.

6. Strategic and Routine Decision Strategic decisions (or) Basic decision are complex in nature and are always taken after deep deliberations. Any mistake in such decisions will prove to be dangerous for the concern. These decisions can determine the very fate of the organisations. Implementation of strategic decisions would require heavy investments and also greater commitment on the part of the staff. The decision to introduce a new product in the market or install very expensive machinery is an example of a strategic decision.

7. Routine Decisions are taken for the functioning of the organisations. Much evaluation is not required. So it can be taken quickly. Though the decision is taken for routine activity powers are given to lower level management to take this kind of decision within their limit.