Decisions may be of different types. Some of the important types of managerial decisions are explained as follows:- 1. Programmed and Non-Programmed Decisions 2. Major and Minor Decisions 3. Routine and Strategic Decisions 4. Organizational and Personal Decisions 5. Individual and Group Decisions 6. Policy and Operation Decisions and 7. Long-Term Departmental and Non-Economic Decisions.
Type # 1. Programmed and Non-Programmed Decisions:
(a) Programmed decisions are those made in accordance with some habit, rule or procedure. Every organisation has written or unwritten policies that simplify decision making in recurring situations by limiting or excluding alternatives.
For example, we would not usually have to worry about what to pay to a newly hired employee; organizations generally have an established salary scale for all positions. Routine procedures exist for dealing with routine problems.
Routine problems are not necessarily simple ones; programmed decisions are used for dealing with complex as well as with uncomplicated issues. To some extent, of course, programmed decisions limit our freedom, because the organization rather than the individual decides what to do.
However, the policies, rules or procedures by which we make decisions free us of the time needed to work out new solutions to old problems, thus allowing us to devote attention to other, more important activities in the organization.
(b) Non-programmed decisions are those that deal with unusual or exceptional problems. If a problem has not come up often enough to be covered by a policy or is so important that it deserves special treatment, it must be handled by a non-programmed decision.
Such problems as:
(1) How to allocate an organisation’s resources
(2) What to do about a failing product line,
(3) How community relations should be improved will usually require non- programmed decisions.
As one moves up in the organizational hierarchy, the ability to make non- programmed decisions becomes more important because progressively more of the decisions made are non-programmed.
Type # 2. Major and Minor Decisions:
A decision related to the purchase of a CNC machine costing several lakhs is a major decision and purchase of a few reams of typing paper is a minor (matter or) decision.
Type # 3. Routine and Strategic Decisions:
Routine decisions are of repetitive nature, do not require much analysis and evaluation, are in the context of day-to-day operations of the enterprise and can be made quickly at middle management level. An example is, sending samples of a food product to the Government investigation centre.
Strategic decisions relate to policy matter, are taken at higher levels of management after careful analysis and evaluation of various alternatives, involve large expenditure of funds and a slight mistake in decision making is injurious to the enterprise. Examples of strategic decisions are- capital expenditure decisions, decisions related to pricing, expansion and change in product line etc.
Type # 4. Organizational and Personal Decisions:
A manager makes organizational decisions in the capacity of a company officer. Such decisions reflect the basic policy of the company. They can be delegated to others. Personal decisions relate the manager as an individual and not as a member of an organization. Such decisions cannot be delegated.
Type # 5. Individual and Group Decisions:
Individual decisions are taken by a single individual in context of routine decisions where guidelines are already provided. Group decisions are taken by a committee constituted for this specific purpose. Such decisions are very important for the organisation.
Type # 6. Policy and Operative Decisions:
Policy decisions are very important, they are taken by top management, they have a long-term impact and mostly relate to basic policies. Operative decisions relate to day-to-day operations of the enterprise and are taken at lower or middle management level. Whether to give bonus to employees is a policy decision but calculating bonus for each employee is an operative decision.
Type # 7. Long-Term Departmental and Non-Economic Decisions:
In case of long term decisions, the time period covered is long and the risk involved is more. Departmental decisions relate to a particular department only and are taken by departmental head. Non-economic decisions relate to factors such as technical values, moral behavior etc.