Management and Decision Making

Cite this article as:"Management and Decision Making," in The Business Professor, updated April 3, 2020, last accessed August 7, 2020, https://thebusinessprofessor.com/lesson/management-and-decision-making/.

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What is Management Decision Making?

Management decision making is a critical part of the management planning function. Understanding the unique nature of managerial decisions requires understanding the types of decisions and the context for making those decisions.

What are the Types or Categories of Management Decision?

Decision making can be defined as selecting between alternative courses of action. Management decision making concerns the choices faced by managers within their duties in the organization. Making decisions is an important aspect of planning.

Decision making can also be classified into three categories based on the level at which they occur.

  • Strategic Decisions – These decisions establish the strategies and objectives of the organization. These types of decisions generally occur at the highest levels of organizational management.
  • Tactical Decisions – Tactical decisions concern the tactics used to accomplish the organizational objectives. Tactical decisions are primarily made by middle and front-line managers.
  • Operational Decisions – Operational decisions concern the methods for carrying out the organization’s delivery of value to customers. Operational decisions are primarily made by middle and front-line managers.

Decisions can be categorized based on the capacity of those making the decision.

  • Organizational Decisions – An organizational decision is one that relates or affects the organization. It is generally made by a manager or employee within their official capacity. These decisions are often delegated to others.
  • Personal Decisions – Personal decisions are those primarily affecting the individual – though the decision may ultimately have an effect on the organization as a result of its effect on the individual. These types of decisions are not made within a professional capacity. These decisions are generally not delegated to others.

We cover the topic of management decision making in detail in our material on Decision Science.

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