The Types Of Management Decisions Business Essay

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Decision making and problem solving are critically essential skill areas of all management level. The first important function in the management is to take decisions in order to solve problems on problems and situations. Before that we should understand what decision making is?

Decision making is one of the defining characteristic of leadership. Decisions are not found under a rock.

Decision making Process involve:

Managerial decisions are deliberate choices made from a range of alternatives. Hence we can say it is the process of selection of only the best one solution among of many available alternatives.

Decision making involves freedom to the manager about the final decision. This is a goal-oriented and dynamic process thus it involves time dimension and time lag.

Before making the decision, the manager must evaluate each choice according to its projected out comes in terms of the organization's resources as well as the amount of information and time available. Thus every managerial decision is a best effort compromise made in an environment of uncertainly.

The types of management decisions

Programmed and non-programmed decisions - Programmed decisions are routine almost automatic process with repetitive nature. They develop specific process of decision making which lays down the systematic procedure to be followed in future. Non-programmed decisions are unusual situations that have not been often addressed which cannot be repetitive. There are no rules to follow since the decision is new. These decisions are made based on information.

Organizational and personal decisions - These decisions are taken by the executives in their official capacity in accordance with the organizational objectives are known as organizational decisions. Decisions taken by an executive as an individual and not in his official capacity called as personal decisions.

Strategic and routine Decisions - These decisions require lengthy deliberations and relate to policy matters and of course this affect the long term survival, growth of the organization.

But routine decisions require little deliberation or are made repetitively. These decisions are concerned with day to day operations.

Steps involve in Decision Making



Decision-making involves a number of steps which need to be taken in a logical manner. This process is complete only when all the stages are gone though in the proper sequence.

Follow up the


Making the


Decision Making

Converting decision

in to action

Analyzing the





Selecting the best


01.) Problem Identification.

Identification of the real problem before a business is the first step in the process of decision making. If a problem well defined and identified means that the problem is half-solved. If the problem is inaccurately defined, every step in the decision making process will be based on an incorrect starting point. One way that a manager can help determines the true problem in a situation is by identifying the problem separately from its symptoms. To find out the problem quickly, the manager should continuously monitor the decision making environment understand the possible cause have to look in to management reports, check progress against budgets and compare the results against ideas. In briefly, to arrive at a real problem, the manager should search the "critical factor" at work, which is the point at which the choice applies.

02.) Making the diagnosis

In diagnosing the problem the most important part is to find out the real causes or sources of problem. The problems can correctly diagnosis with the help of information relevant to the problem gather. Actually this is used as the process of identifying a disease from its sign and symptoms. There are three basic elements of sound diagnosis:

Knowing the gap between the results desired and those existing,

Identifying the cause of the gap,

Under taking the problem in relation to higher objectives of the organization.

03.) Analyzing the problem

After diagnosis the problem it has to be well analyzed. Shortly managers have to analyze the problem in depth. Through this it helps the manager to get an insight into the problem. And of course through this they will be able to find out who would make the decision, what information is needed and etc. This whole approach is based around seeking for critical factors.

04.) Developing Alternative

A manager should research for several alternative solutions of the problem while making decision. The problem can be solved in many ways. Hence these all possible ways must be identified and analyzed. The object of finding alternative solutions is to make the best decision, after a careful consideration of the most desirable courses of action. However successful problem solving requires through examination of the challenge and a quick answer may not result in a permanent solution. Thus, a manager should think through and search various alternative solutions to a single problem before making a quick decision. One of the best known methods for developing alternatives is through brainstorming, where a group works together to generate ideas and alternative solutions. For every problem there are alternatives and they should be evaluative before taking the final decision.

05.) Selecting the best Alternative

Selecting an alternative seems to be most rational for solving the problem. The alternative thus selected must be communicated to those who are likely to be affected by it. Acceptance of the decision by group members is always desirable and useful for its affective implementation the best alternative is the one produces the most acceptable alternative four approaches are followed as experience, experimentation, research and analysis.

06.) Converting decision in to action

The next step is to convert the decision in to an effective action. With the choice of an alternative through which objective can be achieved the decision making process comes to an end. Being a continuous and ongoing process decision making is not complete unless the decision maker comes to know its end result, whether his choice has contributed to the objective or not. So this is very important. Without such action, the decision will remain merely a declaration of good intentions. For this, the subordinates should be taken in confidence and they should be convinced about the correctness of the decision.

07.) Follow up the decision

Ongoing actions need to be monitored. Here, the manager has to make build-in arrangements to ensure feedback for continuously testing actual developments against the expectations. They should provide feedback on how well the decision is being implemented, what the result are and what adjustments are necessary to get the results that were intended when the solution was chosen. Feedback is necessary to decide whether the decision already taken should be continued or be modified in the light of changed conditions.

Illustrate the decision making process by using it on an particular problem from a company of your choice

Remarko was started as a small company. Throughout so many years, marketing ideas have proved success and helped the company to become one of the most renowned fast food brands in world wide. Now it is correct say that Remarko is world's largest chain of hamburger fast food restaurants. ABC primary sells chicken, French fries, hamburgers, soft drinks, breakfast items, desserts, milk shakes, smoothies and fruits. They wanted to open a new branch in sir lank. But they are facing some problems while arranging it.


Competition from local food retailers or restaurants


If we illustrate the vegetarianism problem as to the decision making process :

Problem Identification

There are various types of religions in Sir Lanka. Catholics eat all the kind of meats. But Buddhist people don't eat meat. They are vegetarians. Muslims don't eat pork. So because of these all non-vegetarian and vegetarian the company is facing a real problem to choose what kind of foods that they will choose for the menu. As a company they should satisfy all their customers.

Making the diagnosis

In Sir Lanka the major religion is Buddhism. So 75% of population is Buddhist. And the rest 25% are Muslims and Catholics. As to the religion Buddhists are not eating any kind of meats. They are used to stay as vegetarians. But the rest of the population (means catholic and Muslims) is eating meats. Catholics eat beef, pork and all kind of meats. Muslims eat beef and all expect pork.

Analyzing the problem

Beyond of all these religious matters company has to move on. So they should analyze the problem. They have to satisfy all these three religious peoples and they need to be success in Sir Lanka as a leading company. Now they should make their serving in a different way. They have to choose a way that all the Sir Lankan people would like it.

Developing Alternative

For solutions the company can choose three alternative solutions.

As first option they can serve only the vegetarian dishes. They can make their menu including the vegetarian choices.

Second they can choose only the non vegetarian foods. And they can serve every dish with some kind of meat.

And third option they can choose the both vegetarian foods and non vegetarian foods for serving.

Selecting the best Alternative

The company got three alternative solutions. Now management needs to analyze the entire alternative one by one and then they have to choose the best option.

When we talking about the fist option and the second option at once. If the company is willing to choose the first option, they can satisfy vegetarians only. If they are willing to choose the second option, they will be able to satisfy non vegetarians but not vegetarians. Hence it's better to choose the third solution. They can choose the both non vegetarians and vegetarians at once. Company will choose the third solution. Because of this they will be able to satisfy both categories.

Converting decision in to action

Now they have to make their menu targeting both vegetarians and non vegetarians. As in above details there are 75% vegetarians among the population. Because of this they have to give the main interest to vegetarians.

Like an example if they have total 10 meals in their menu, they have to put 7 vegetarian foods and 3 non vegetarian foods. Like this they have to reset their menu.

Follow up the decision

After Implement the decision manager needs to provide feedback. Manager should know what the result is? They can provide feedback by offering some offers to encourage the customers for their food. Like an example they can give free soft drinks with a set package of meal.


Management did the correct thing by choosing the best alternative. Because of this solution the company will able to target the all people in every religion in sir lanka. And because of the feedback they will be able to get more attraction from customers. And they will be able to success in sir lank also.