List and explain the types of decision.

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krishna-agrawala | College Teacher | (Level 3) Valedictorian

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Decision can be classified in different types according to several ways. One of the most common ways of classifying decision is based on the scope and impact of the decision on the working of an organization or firm. In this type of classification of decision, the decision are thought arranged in a hierarchical fashion, in which the highest level decisions cover the working and influence the performance of the entire enterprise. This overall plan is then further elaborated, in the next level of plans, into several separate plans covering major organizational units or groups of activities of the company. In this way there can be several levels of detailing of decision or plans, till the most detailed decisions are covered.

As per this scheme we can classify decisions or plans in following levels arranged sequentially.

  1. Company objectives and policies including its mission and vision. This involves identifying the basic propose for existence of the enterprise, what route or atctivities will be undertaken to achieve these objectives, and what policies and ethical principle will be considered sacrosanct by the organization and will be followed in face of difficulties.
  2. Strategic Plans: This includes plans covering long range targets and activities of the organization as a whole.
  3. Business unit plan: This will cover the overall activities of different business units within a firm.
  4. Departmental plans: These will cover decision of individual departments within independent business units. These department could be organized as per functional classification such as design, production, and marketing, or may be organize d in some other way such as product wise, or market segment wise.
  5. Operational plans: These covers detailed planning and scheduling to guide the and direct the activities of the operational activities. For example a manufacturing plan may have separate plans to covers operations like material procurement, component production, assembly and dispatch of finished products, and maintenance program for the plant and equipment.
  6. Work schedules: These are most detailed day to day plan identifying action to be taken at the levels of individual equipment, component, operator, or other similar resource units.
  7. Work instruction: These is in the form of instructions to individual operator on work to be performed. This can be in form of formal documents such as a job card, or can be formal.
  8. Day to day problem solving: These decisions are taken by individuals in response to problems faced in execution of work as per work instruction. When the problems can not be solves at lower levels, it becomes necessary to escalate this decision to higher level of decisions.

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