Types Of Decision-Making
We make decisions all the time. Take this article. You chose to click on the link and read it, didn’t…
September 24, 2020 | 4 mins read
We make decisions all the time. Take this article. You chose to click on the link and read it, didn’t you? This itself is an example of a ‘personal decision’. We spend most of our day making small and big decisions like this one.
Now let’s consider the importance of decision-making in the workplace.
How many decisions do you think are made over a regular day of work in your organization? Each person, from the CEO to freelancers, makes several decisions. They don’t make decisions only about their work. Many of their decisions also impact others.
From choosing vendors to setting deadlines for work, to approving leave and hiring people, decision-making is a fundamental part of the work done by people working in any organization.
There are several different types of decisions that people make.
Let’s look at the various types of decision-making in an organization:
You need to take numerous types of decisions in the workplace. The different types of decisions can be of four types:
Let’s say you need to hire a cab services provider to take care of your organization’s transport requirements. Or you need to approve or reject the leave applications of your team members. These are just two examples of the different types of decision-making in an organization.
Managers may need to make such decisions repeatedly. These are structured decisions based on established procedures and policies. The options they choose between are going to remain the same. However, the decision has to be made anew every time based on the context. Decisions that need to be made repeatedly and are based on clear policies or organizational rules are known as programmed decisions. Most of the regular operational decisions taken by mid and lower management officials are programmed decisions.
Not all decisions are structured and routines. Some are a response to novel and complex problems. Let’s say a client asks the organization to send someone to another city for a presentation. Or your company decides to open a new office in another country. These are not routine decisions in which the decision-making process will follow an established protocol or procedure. Such decisions are called non-programmed decisions. They tend to be major decisions that need to be taken by the top management after doing due diligence.
Managers usually need to make many types of decisions to ensure the smooth functioning of the organization and their teams.
A human resources manager might need to make decisions related to hiring policies and contracts. A sales director might decide on the incentives for a sales team. An operations manager might decide to change the roles of certain employees to help them perform better. Such decisions taken by managers on behalf of the company are known as organizational decisions.
Some types of decision-making a manager makes might only for be himself or herself. Personal decisions can nonetheless make an impact on the company’s operations.
For instance, if an account manager in an advertising agency decides to leave the company, this decision might impact the company’s handling of the client accounts managed by the outgoing manager. Similarly, if a manager decides to work remotely, her team will have to adjust to this. These types of decisions are known as personal decisions.
These types of decisions are taken by a manager in response to a problem or situation that only pertains to his or her areas of responsibility. These are decisions that one has the authority to make on their own. For instance, the accounts manager will decide whether the accounts team should switch to new invoicing software.
These is one of the decision types that is strategic. They are taken collectively by a group of people or a team. For instance, the decision to change appraisal and bonus systems will involve the CEO as well as several team managers.
A policy decision is one of the most important types of decision-making in an organization. This is because policies comprise the long-term vision that guides an organization’s work processes. For instance, an organization might have gender-neutral hiring policies. Similarly, intolerance of bullying and harassment is another common policy decision.
Strategic decisions are one of the decision types related to the short-term operational strategies of a company. They are not set in stone. For instance, deciding on the next marketing campaign is a strategic decision. However, not allowing any racial or gender bias in the marketing campaigns will be a policy decision.
Learning about the types of decision-making is a highly sought-after skill. Harappa Education strives to equip professionals with the knowledge of the different decision types through its Making Decisions course.
This impactful online course equips learners with frameworks to make well-informed decisions. It has a section on decision-making with uncertainty that guides you through the process of making decisions clear and impactful decisions. Sign up to learn about different types of decisions for success at work and life in general.
Explore topics such as Decision Making, the Steps of Decision Making, How to Make Decisions, the Decision Making Methods & the Decision Tree Analysis from our Harappa Diaries blog section and develop your skills.