TYPES OF DECISION

Different problems require different type of decision making. Decisions are taken at various levels of management. Such decisions are of several types. They can be classified into the following categories:

(1) Programmed and Non-programmed Decisions

Programmed decisions are the decision managers make in response to repetitive and routine problems. If a particular situation occurs often, managers will develop a routine procedure or policy for handling it. Decisions are said to be programmed if they are repetitive and routine, and a definite procedure has been developed for determining when the decision should be made and what actions should be taken.

Non-programmed decisions are just reverse to programmed decisions. They are relatively unstructured and occur much less often. Decisions are termed non-programmed when they are made for novel, nonrecurring and unstructured problems. They often deal with complex issues that demand data gathering, forecasting, and strategic planning. Such a decision would involve issues of strategy, resource commitment, and long term investments.

(2) Organizational and Personal Decisions

If an executive takes any decision in his official capacity, that decision is called organizational decision. Such decisions affect the functioning of the organization directly. The authority for taking such decision is clearly defined in the organizational structure. Such authority can be delegated.

Personal decisions are decisions, which are taken by an individual in his personal capacity. Such decisions are concerned with him. They do not affect the organization directly but affect from the organization in his personal decision. The power to make personal decisions cannot be delegated.

(3) Individual and Group Decisions

Decisions can also be classified on the basis of persons involved in the decision making process. When an individual takes a decision, it is known as individual decision. Individual decisions are generally taken in small organization. Individual decisions are also taken in big organization if they are of routine nature.

When a number of persons collectively take the decision it is known as group decision such a decision taken by the Board of Directors, Committees, etc. Such decisions are generally taken in big organizations, which follow the participative style of management. Such group decisions are well balanced but they involve delay and make it difficult to fix responsibility of such decisions.