Programmed and Non Programmed decisions
Programmed decisions . Programmed decisions are made in routine, repetitive, well-structured situations with predetermined decision rules. These may be based on habit, or established policies, rules and procedures and stem from prior experience or technical knowledge about what works or does not work in a given situation. For example, organisations often have standardised routines for handling customer complaints or employee discipline. Decisions are programmed to the extent that they are repetitive and routine and that a definite approach has been worked out for handling them. Because the problem is well-structured, the manager does not have to go to the trouble and expense of working through an involved decision making process. A programmed decisionis applied to structured or routine problems. Lathe operators, for instance, have specifications and rules that tell them whether the part they made is acceptable, has to be discarded, or should be reworked. Another example of a programmed decision is the recording of standard inventory items. This kind of decision is used for routine and repetitive work; it relies primarily on previously established criteria. It is, in effect, decision making by precedent. Non-programmed decisions. Non-programmed decisions are unique decisions that require a 'custom made' solution. This is when a manager is confronted with an ill-structured or novel problem and there is no 'cut and dried solution'. The creation of a marketing strategy for a new service represents an example of a non-programmed decision. IBM Australia's introduction of a personal computer in the 1980s was unlike any other decision the company had previously made. Non Programmed Decisions are unique and out of the standardized routine way of making decisions. These decisions require 'tailor made' solutions that are synonymous with contingency management, where decisions are made without following the well-structured ways of...
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