Organizational Behavior

1.1. Introduction

2.1. Types of Business Decisions

Decision making, is an essential and major part of business activities, is designed to bring about preferred outcomes and reduce uncertainties. The decision making can be thought of as the brain and nervous system of a business. It is carried out amid unclear information, changing factors, and contradictory points of view. There are typically four types of decision makers within an organization: directors, shareholders, managers and employees - all of whom make many successful, and some unsuccessful, decisions every day.

Decisions making models are all about making good and correct judgments, solutions for the problems, and correct decisions. There are several types of business decisions, which are:

2.1.1. Programmed Decisions. These are programmed standard decisions which always follow the same routine, where repetitive decisions undertaken by an organization on a recurring basis. Related to daily activities, they are relatively simple, relying on historical data and previous solutions. As such, they can be written down into a series of fixed steps which anyone can follow. Example: The reordering of standard inventory, preparing monthly newsletters, handling employee discipline, and determining the salary of a new employee are all programmed decisions;

2.1.2. Non-Programmed Decisions. These are non-standard and non-routine decisions, are all those that are made in response to unique and novel situations. Each decision is different from any previous decision. Example: Decisions to develop a new product line, extend the geographical scope of a company, enter a new service market, or relocate headquarters to another country are examples of non-programmed decisions;

2.1.3. Strategic Decisions. Strategic decisions are all those that are concerned with the long-term policy and general direction of a business, are high risk decisions with uncertain outcomes.

Strategic decisions are made by top managers....