Types of Decisions Flashcards
What are the types of decisions?
Strategic, Tactical and Operational
Length of strategic decisions:
Long Term (10 years+)
Strategic decision maker:
Senior managers e.g. BOD
Strategic purpose:
Meet the overall purpose and direction of the organisation
Strategic Risk:
High risk (costly to reverse)
Strategic examples:
- Takeover a rival firm
- Expand into another market
- Become a multinational
Legth of tactical decisions:
Medium term (1-3 years)
Tactical decision maker:
Middle manager e.g. branch managers
Tactical purpose:
Allow us to achieve our strategic decisions
Tactical risk:
Medium risk (effects a small area of time, usually fixable)
Tactical examples:
- Increase number of staff
- Open un a new outlet
- Delayer
Length of operational decisions:
Short term (day-to-day)
Operational decision maker:
Low level managers (supervisers)
Operational purpose:
Ensure targets are met
Operatinal risk:
Low risk (rectified quickly with low cost to the organisation)
Operational examples:
- Schedule a meeting
- Delegating tasks
- Grant holiday leave
- Regular supply order
What are centralised decicion making?
Decisions made by the senior managers
- (they carry the whole burden)
- (it is easier to promote a corperate image)
- (precedures are standardised)
Centralised decision making advantages:
- Made by teh most experienced person
- Made more quickly
- Greater uniformity
Centralised decision making disadvantages:
- Staff are demotivated by the lack of input
- Slower response to external factors
What are decentralised decision making?
Decicion making delegated to depertments
- (subordinates make decisions)
- (decision making is faster)
Decentralised decision making advanatges:
- Staff are motivated
- Response to external factors is fast
- Better customer service
Decentralised decision making disadvantages:
- Decisions are made by less experienced employees
- Local divisions may be inconsistent with overall strategy
