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Posted by Chester Morton / Friday 1 December 2017 / No comments
Types of decision making - Programmed decision making
TYPES OF DECISION MAKING - PROGRAMMED DECISION MAKING
Definition of Decision making
Decision making represents a process of choosing the best
alternative from among many possible options available to the manager of the
business unit. A manager at any given moment of making a decision concerning the
business would first of all assess all the different alternative decisions
which the business can take. Each of these alternative decisions will be looked
at in terms of their advantages and disadvantages which are known to the
managers of the business. From this evaluation, a final decision may be arrived
at. Weighing the merits and demerits of each choice or option helps the
managers of the company to make the best decisions.
TYPES OF DECISION MAKING
Introduction
Introduction
Decision making can be categorized into two main types;
Programmed decision making and unprogrammed decision making.
Programmed Decisions
Programmed Decisions relate to those kinds of decision
making carried out in structured situations where the problems targeted are
fairly routine and recurrent. For instance, issues affecting employees' leave allowances are solved using the firm’s policies on leave
claims. A worker must meet certain requirements in order to qualify for such
claims. While this example may be rather simple, in reality there may be
routine situation that are more complex in nature. Consider a routine in the
production department where the production manager orders for an inventory
to be taken when production reaches re-order point.
However, this routine cannot be followed in instances where
demand for the product suddenly increases. The manager must go against this
routine by not waiting for the re-order point because he must order earlier than
usual. We can therefore deduce from the examples given above that while there
may be programmed decisions which are simple, there are other programmed decision which are
necessary and a lot more complex. In both situations, the manager has to follow a pre-determined set of requirements for taking his decision. Programmed
decisions do not need major brainstorming, they are taken based on already
existing company policies and work procedures. In other words, programmed
decisions do not need managers to figure out a new or creative way of
solving the problems they are intended for. In other words, programmed decisions involve some
amount of certainty.
If we are to summarize important features
of programmed decision we can say that: Programmed decisions are taken in
accordance with the way things are done in the firm. The way things are done in
the firm is often called standard operating procedures.
· Programmed
decisions are used to address frequently occurring or routine decisions for
example request for a leave or determining whether the employee going on leave
qualifies for a leave allowance or similar such situations that happens
frequently.
· Programmed decisions are more appropriate
for problems which happen frequently and are similar.
· Programmed decision in reality are
made by managers only once and later specified as the way to approach problem
when similar situation in the future arise.
· Programmed decision could lead to the formulation of policies, rules and procedures.
The various kinds of organisational decisions are the following:
Organisational decision, Operational decisions, Research decisions, and
Opportunity decisions.
ALSO READ:
Steps in the decision making process
The definition and importance of decision making
ALSO READ:
Steps in the decision making process
The definition and importance of decision making
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BUSINESS MANAGEMENT,
Education
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