Organizational Decision making
1. Personal and Organizational Decisions:
Personal decisions are those, which a person takes in his individual capacity but not as a member of his organisation. This affects his personal life. These personal decisions are not delegated, A manager who decides to resign his job and leaves the organizational making a personal decision.
Organizational decisions, on the other hand, are taken by an executive in his/her official capacity and can be delegated to others. Such decisions affect the organisational behavior directly.
2. Long Term Departmental and Non-Economic Decisions:
In case of long-term decisions the period covered is long and the risk involved is more. Departmental decisions art- taken by the departmental heads and relate to the department only. Decisions relating to non-economic factors (such as technical values, moral behavior etc.) may be termed as non-economic decisions.
While taking decisions on these factors, care should be taken to see that justice is done to all and as a result of this decision; no new problem is created for the organization.
3. Individual and Group Decisions:
Another method of classifying decisions is on the basis whether one single individual or a group is involved in making decisions. Most decisions in organizational life are made by individuals. It is for the authority. There are individuals whose authority is supervisory; they make decisions with respect to people. If their authority is operational, they make decisions with respect to things or ideas.
Some decisions are made by groups. Group decision-making is variously known as participate or plural management. If formally authorized, it takes the form of formal committee that is authorized to make specific decisions. Formal committees are becoming increasingly popular in large organizations.
4. Programmed and Non-Programmed Decisions:
Programmed decisions are those, which are routing and repetitive, and have procedures setup to deal with them, and are taken within the board policy structure. In such decision, risk involved is not high and they, therefore, can be more easily delegated. Purchase of raw materials in normal routing is an example for programmed decisions.
Such is an example for programmed decisions. Such purchases can be made by lower-level managers keeping in view the purchase policy decided by the top management.
These decisions have short- run impact on the functioning of the organization. Non- programmed decisions are non-repetitive and are basic in that they result in long-range commitment. For example, the selection of a location for a factory, introducing a new product in the market etc.
5. Routine and Strategic Decisions:
Basic or strategic decisions relate to policy matters and usually involve large investments or expenditure of funds. Routing decisions on the other hand are those, which require little deliberation or those, which are made repetitively.
For instance, sending samples of a product to the Government investigation center is a routine decision, but lowering the price of product or installation of automatic plant are major and strategic decisions.
6. Major and Minor Decisions:
Decisions may be classified as major and minor. For example, if it relates to the purchase of a big machine worth, say a lakh of rupees, it is a major decision. On the other hand, purchase of fountain pen ink or a few reams of paper are minor matters and may be decided by the office superintendent.
7. Policy and Operating Decisions:
Whether to give profit bonus to employees or not a matter of policy to be decided by top management; but calculating the bonus in respect of each employee is an operating decision which can be taken at a much lower level.