How Are Problems, Types of Decisions, and Organizational Level Integrated?

Exhibit 4–8 describes the relationship among types of problems, types of decisions, and level in the organization. Structured problems? Use programmed decision making. Unstructured problems? Use nonprogrammed decision making. Lower-level managers essentially confront familiar and repetitive problems so they most typically rely on programmed decisions such as standard operating procedures. However, as managers move up the organizational hierarchy, the problems they confront are likely to become less structured. Why? Because lower-level managers handle the routine decisions themselves and only pass upward decisions that they find unique or difficult. Similarly, managers pass down routine decisions to their employees so they can spend their time on more problematic issues.

Exhibit 4–8

Types of Problems, Types of Decisions, and Organizational Level

A figure describes the relationship among types of problems, types of decisions, and level in the organization.

MANAGERIAL DECISIONS: Real World—Real Advice

  • Few managerial decisions are either fully programmed or fully nonprogrammed. Most fall somewhere in between.

  • At the top level, most problems that managers face are unique—that is, nonprogrammed.

  • Programmed routines may help even in situations requiring a nonprogrammed decision.

  • Top-level managers often create policies, standard operating procedures, and rules—that is, programmed decision making—for lower-level managers in order to control costs and other variables.

  • Programmed decision making can facilitate organizational efficiency—maybe that’s why it’s so popular!

  • Programmed decisions minimize the need for managers to exercise discretion.

  • Discretion—the ability to make sound judgments—costs money because it’s an uncommon and valuable quality and managers who have it are paid more.

  • Even in some programmed decisions, individual judgment may be needed.

..................Content has been hidden....................

You can't read the all page of ebook, please click here login for view all page.
Reset