Effective decision-making is the cornerstone of successful organizations all around the world.
In fact, successful decision-making enables a company to avoid managing common challenges, procedures, and activities while also helping the organization to navigate unique situations and pursue new opportunities for success.
What is decision-making?
Decision-making is a life skill and is based upon selecting between two or more options that are available. Effective decision-making can be viewed as a process and decisions can be made by a single person or a group of people.
Eight types of decision-making
These are the main types of decision-making.
1. Personal and organizational decision-making
Every day managers and staff take personal decisions within a company. Such decisions are taken in a personal capacity and not within the professional capacity that their role would demand. In contrast, organizational decision-making is taken by managers within the professional capacity. It is worth noting that some of these latter decisions can be delegated to other individuals across the company.
2. Routine decision-making
As the name suggests, routine decision-making is taken around the everyday activities of the company. As a result, these decisions tend not to be difficult to take as they are usually repetitive. These decisions tend to be taken by lower-level managers and are usually around routine policies and procedures that the company deals with every day (e.g., purchase orders).
Basic decision-making highlights decisions that are essential for the existence of the organization and for which complete study, analysis, power, and critical thinking are essential.
3. Policy and operating decision-making
The importance of policy decisions cannot be stressed enough. These relate to basic policies which help structure and organize a company to ensure consistent and trusted approaches are followed across the company. These management-type decisions tend to be taken by top management. Operating decisions, on the other hand, are usually taken by lower management levels and are designed to operationalize the policy decisions already set forward by senior management.
4. Individual and group decision-making
Individual decisions can also be taken by a person within their organizational capacity especially when these decisions are taken in smaller organizations. Group decision-making, on the other hand, is taken by groups (e.g., a committee taking a decision on how to proceed on a particular organizational initiative).
5. Organizational, departmental, and interdepartmental decision-making
Organizational decision-making is decisions taken by managers as part of their normal day-to-day duties and capacity. Departmental decision-making happens at and will mainly impact only the department in question. In contrast, inter-departmental decision-making can impact more than one department.
6. Programmed and non-programmed decision-making
Programmed decision-making is taken around common, frequently occurring situations that already are covered by existing policies and procedures. In contrast, non-programmed decisions are not routine or receptive and tend to be around unique situations (responses to sudden, unexplained, and dramatic market changes) which can make these decisions more difficult to take.
7. Strategic and tactical decision-making
Strategic decision-making is long-term, complex, and difficult to take by nature and is usually taken by senior managers. A good example is a senior management team making a decision to offer a to be a market leader. Such decisions can have a long-term and serious positive/negative impact on the company so are never taken lightly.
In contrast, tactical decision-making is medium-term, less complex, made by middle management, and are relatively routine in nature. Such decisions are relatively easy to take by experienced managers.
8. Planned and unplanned decision-making
Planned decisions are always around known and expected activities of the organization. In contrast, unplanned decision-making happens around unexpected events but these decisions are necessary and should not be avoided.
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