There are five main types of business decisions that are common for all types of organizations. They include operational decisions, tactical decisions, strategic, programmed, and non-programmed decisions. They programmed decisions, equally known as routine decisions have specific methods that they follow. Tactical decisions are the types of business decisions that focus on goals for the medium term which can lead to long term goals. On the other hand, operational decisions are the administrative and day-to-day decisions taken in order to achieve the medium term goals. Strategic decisions are the types of business decisions taken in order to achieve the organizational long term goals. Non-programmed decisions are decisions that are taken as matters arise and were not planned from the onset. They are decisions that are taken to solve issues that were not envisaged. The following is a detailed explanation of the different types of business decisions.
1. Programmed decisions
As explained before, programmed decisions are the types of business decisions that follow the same process. They are properly planned and have series of well cutout steps. Programmed decisions are usually set by the management of the organization and may require some form of training before the employees can execute the decisions effectively. They may be short term, medium term, or long term decisions and can even be programmed in the computer.
2. Non-Programmed Decisions
These are non-routine and non-standard decisions. They are not planned and do not follow a particular order. Non-programmed decisions are the types of business decisions that can be taken as matters arise. They are mostly decisions taken to achieve short term goals. Unlike other types of business decisions that can follow the same process repeatedly, a non-programmed decision may not be similar to any previous decisions that have been taken before. They are not written and may require the experience or expertise of an individual in that particular field the decision is taken.
3. Strategic Decisions
These are the types of business decisions that affect the core goals and objectives of the organization. Strategic decisions are usually taken by top management at the unveiling of the company or at the start of a financial year. They are long term decisions aimed at achieving the long term goals of the organization. From the strategic decisions, other short and long term decisions are taken. A good example of a strategic decision in a company may be the idea of top management to expand their network within the next 10 years through strict investment policies. The long term goal is the expansion of the network while the strategic decision is the investment efforts to make in order to raise money for the finance of the project.
4. Tactical Decisions.
These types of business decisions are taken in order to achieve the medium term goals of the organization. They are decisions that can be attained within 2 to 5 years.
5. Operational Decisions
They are equally known as administrative decisions and are intended to provide reach short term objectives. Operational decisions are usually taken during the day to day administration of the business. They can either be planned or unplanned.