Programmed and Non Programmed Decision Making

Topics: Decision making, Risk, Decision theory Pages: 3 (967 words) Published: October 19, 2006
1.Compare and contrast programmed and nonprogrammed decision-making in organizations and give two realistic business examples of each of these two types of decision-making.

Programmed decision are decisions that have been made so many times in the past that managers have developed rules or guideline to be applied when certain situations are expected to occur. Programmed decision making is used when an inventory manager of mc Donald's decides to order beef patty stocks because the stocks are three-quarters empty. Programmed decisions making are a routine that you make every time so that the organization run smooth. Managers can develop rules and guidelines to regulate all routine organizational activities. Most decisions are related to daily activities.

On the other hand , nonprogrammed decisions are made in response to unusual opportunities and threats. Nonprogrammed decision making is used when mc Donald's are deciding to invest in new deep fryers. It is a nonroutine decision making . This means it is made for big decisions that will affect an organization for a long time. This type of decision making does not need rules or guidelines to be followed because the situation is unexpected or uncertain. For example if mc Donald's plans to launch a new line of menu, they will have to make decision base on their intuition and reasoned judgments.

In programmed decision making there will be no error in the decisions because it is a routine and managers usually have the information they need to create rules and guidelines to be followed by others. Nonprogrammed decision making are likely to have error because it causes more problems for managers and is inherently challenging. Managers must rely on their intuition to quickly respond to a pressing concern.

Sometimes programmed decision making can cause error. But it is minor to nonprogrammed decision making . Errors cause by nonprogrammed decision making can affect an organization badly. For example if...
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