Decision types in business

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Decision types in business
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There are various typologies of decision in business. One typology of decisions is related to the functions carried out by individual supervisors. One can speak of decisions concerning: salaries, supplies, marketing or accounting. An important feature of this division is to emphasize the importance of decisions made by the individual managers.

Overall typology of management decision

  • Programmed - based on custom, procedure, routine
  • Non-programmed: too rare to form the appropriate procedure
  • Strategic, tactical, operational decision
  • Individual decision - based on collective diagnosis, group thinking

Based on management functions typology by Henri Fayol there are following:

It is clear that the division of the decision depends on the particular typology of management functions. Decision types in business.png

Fig.1. Decision types in business

Types of decision making

Following table presents two-dimensional typology of decisions.

Strategic decisions Tactical decisions Operating decisions
Type of problem Directions of development for the company Providing conditions for effective implementation of corporate objectives Optimizing the use of company resources
The essence of the problem The allocation of global resources, depending on the options provided by the environment Acquisition, organization and resource development The use of resources, supervision and control
Major decisions Establishing goals and objectives in the strategy development, change the production profile, new investments, etc. Determining the structure of authority and responsibility, defining principles of material management, changes in production and marketing, etc. Determination of current tasks, the allocation of resources for their implementation, inventory optimization, etc.
The main objectives Aims and objectives, strategy of diversification, strategies in the field of finance and administration, selecting methods of development The organization and structure of information, accountability, resourcing and development, cash, tools and work objects, people Operational objectives and tasks, organization of production and marketing, process control
General characteristics of the decision Decisions centralized, unique, made from time to time Decision made for solving conflicts between strategy and execution, to address conflicts between individual goals and objectives of the company Decentralized decisions, repeatable, large number, varied, often taken


Author: Krzysztof Wozniak