5) Types of Decisions

5) Types of Decisions

1. Routine Decisions

   • Routine Decisions are ones that are taken regularly. They are also decisions that are not expected, so managers expect to make part of their regular duties.
     • E.g. Agreeing staff rotas and ordering stock.

2. Non-routine decisions

   • Non-routine decisions occur irregularly and may be needed because of some unexpected event. These can be taken by managers at all levels.
     • Deciding how to deal with an emergency, making location decisions, deciding to cease production of a product etc.

3. Tactical Decision

   • Are based on on short term factors. E.g, a business might decide to reduce the price of a product if its sales are below the budgeted/expected figure. Tactical decisions are normally made by middle managers, although they may be taken by senior managers if significant costs are involved.

4. Strategic Decisions

   • Often those that have long term implications for the entire business. E.g. British Airports Authority announced it was cutting 700 jobs to reduce costs in 2005.

5. Pro-Active Decisions

   • A pro-active decision is one taken in advance of events. Managers at all levels can make pro-active decisions . E.g. a junior manager may decide to hold extra stock of popular product incase of a sudden rise in demand. A type of proactive decision is putting in place contingency plans to deal with threats (e.g. terrorism). Proactive decisions are taken by innovative firms that want to be market leaders.

6. Reactive Decisions

   • Are taken when business respond to events rather than trying to shape them. Reactive decisions are taken at all levels in the organisation.