Types of Decisions

Types of managerial decisions can be as follows:

Programmed and non-programmed

Strategic, tactical, operational
Individual and group

1. Programmed and non-programmed

a) Programmed decision: they are routine and repetitive decisions. Deals with low
risk decisions. Policies, rules and procedures are laid down to handle them.
Middle and lower level managers deal with such decisions. For example: payroll
procedures, processing admission application.
b) Non- programmed decisions: they are unstructured. They deal with complex and
non- routine problems. Each problem is new and different from those experienced
in the past. Managers apply their judgment, intuition and creativity to solve
problems. There are no standard operating procedures. Top-level managers deal
with such situations. Examples are: introduction of new product, construction of
new building, computerization, etc.
2. Strategic, tactical, operational decisions
a) Strategic decisions: they prescribe corporate policy, strategic goals and
environmental positioning in long term perspective. They deal with nonprogrammed situations. Such decisions are made by top management.
b) Tactical decisions: they prescribe short term goals for departments, such as
production, marketing, finance, and personnel. They are made by middle
management.
c) Operational decisions: they tend to be routine and repetitive programmed
decisions. Authority is delegated to lower management to make such decisions.
3. Individual and group decisions
a) Individual decisions: they are made by individuals. They can be for complex or
routine problems. They are generally prevalent in small organizations.
b) Group decisions: such decisions are taken collectively by a group of people.
Examples are decisions by board of directors, teams, committees.
Interdepartmental decisions are generally taken by groups.