Making Decisions, Types of Decisions

Programmed decisions:

Repetitive and routine decisions: A decision rule identifies the situation and specifies how the decision will be made. Useful for establishing solutions (in “if-then” terms) to standard, recurring problems that are solved only once

Streamlines  the decision making process: Allows lower-level managers to shoulder responsibility for programmed decisions. Frees up higher-level managers for more important decisions.

Nonprogrammed decisions: 

Decisions made in complex and non routine situations

Questions to ask:

·         What decision needs to be made?

·         When does it have to be made?

·         Who will decide?

·         Who needs to be consulted?

·         Who will ratify or veto the decision?

·         Who will need to be informed?

A General Decision-Making Model

Rational (Logical) Decision Model Steps

Scan the situation; identify a signal that a decision should be made.

—  Receipt of authoritative communications from superiors

—  Cases referred for decision by subordinates

—  Cases originating from the manager

Classify the decision. If it is routine, apply the appropriate decision rule; if it is not, generate a nonprogrammed decision through problem solving. Monitor and follow-up as necessary.

General Decision-Making Model