Routine and Strategic Decisions
There are two types of decisions in an organization: routine (or operating) decisions and strategic (or policy) decisions. Routine Decisions are repetitive in nature and have a short-term impact, mainly concerning day-to-day operations. They are typically made at lower levels of management, using established procedures to ensure quick and efficient handling. For example, a supervisor may make routine decisions regarding employee overtime pay.
On the other hand, strategic decisions involve long-term commitments and significant investments, influencing the entire organisation’s future. These decisions require careful deliberation and judgment and are usually made at higher levels of management. Examples of strategic decisions include launching a new product, selecting the location for a new plant, or implementing major organisational changes.
Types of Decision-making
Decision-making is the process of selecting the best course of action from a set of alternative options to achieve a desired goal or objective. It involves four interrelated phases: explorative (searching for potential alternatives), speculative (identifying the factors that influence the decision problem), evaluative (analyzing and comparing the alternative courses of action), and selective (making the final choice of the best course of action).
The ultimate aim of decision-making is to find the option that is believed to fulfil the objective of the decision problem most satisfactorily compared to other alternatives.
Table of Content
- Types of Decision-making
- 1. Programmed and Non-programmed Decisions
- 2. Routine and Strategic Decisions
- 3. Organisational and Personal Decisions
- 4. Individual and Group Decisions
- 5. Tactical and Operational Decisions
- 6. Major and Minor Decisions:
- Types of Decision-making – FAQs