Types of Decision Making

In running a business or an enterprise, numerous types of decision-making arise. It is important to distinguish between these. They will guide you towards sober and informed decisions. These are some of the types of decision-making that will arise.

1: Tactical decisions

Tactical decisions are those which a manager makes over and over again, adhering to certain established rules, policies, and procedures. They are repetitive and related to general functioning. Authority for making tactical decisions is usually delegated to lower levels in the organization.

2: Strategic decisions

Statistical decisions, on the other hand, are relatively more difficult. They influence the future of the business and involve the entire organization. Decisions about the objective of the business, capital expenditure, plant layout, production, etc. are examples of strategic decisions.

3: Basic decisions

Basic decisions are those which require a good deal of deliberation and are of crucial importance. These decisions require the formulation of new norms through a deliberate, thought-provoking process. Examples of basic decisions are plant location, product diversification, selecting channels of distribution, etc. Routine decisions are repetitive and, hence, require relatively little consideration. It may be seen that basic decisions generally relate to strategic aspects, while routine decisions are related to tactical aspects of an organization. These types of decisions are vital in the smooth running of the firm. You should always make sure you put much effort into these vital decisions.

4: Organizational decisions

Organizational decisions are those which an executive takes in his official capacity and which can be delegated to others.

5: Personal Decisions

On the other hand, personal decisions are those which an executive takes in his capacity but not as a member of the organization.

6: Policy decisions

Policy decisions are those which are taken by top management and that fundamentally affect the entire business. These types of decisions are important in setting of the company’s path.

7: Operating Decisions

These types of decision-making are those taken by lower management to execute policy decisions. Operating decisions relate mostly to the decision maker’s work and behavior, while policy decisions influence work or behavior patterns of subordinates.

8: Administrative decisions

These types of decisions are made by middle management and are less important than policy decisions. The size of the advertising budget is a policy decision but the selection of media would be an example of an administrative decision. These decisions are mostly related.

Knowing these types of decision-making and their vital importance will assist you in running a successful business.