Module 2 • Management 4.1 Types of decisions
Personal versus business decisions Personal decisions are your own, taken during your personnel planning sessions and could influence your business. This will happen if there is a major change in your personal mission statement and your business’s mission is in conflict with that. Business decisions are those that are made in your official capacity. It is important to distinguish between these. There should not be a conflict of interest if planning is done well on both levels.
Strategic versus operational decisions Strategic decisions are those that define the future direction of your business and form part of strategic planning. The importance of such a process must therefore never be underestimated. Operational decisions are concerned with the day-to-day running of the business. Such decisions must be in line with the strategic decisions since you are busy implementing them.
Structured versus unstructured decisions Strategic decisions are characterised by their highly structured format as was shown in the previous section. Operational decisions are relatively free from limitations imposed by prior decisions. They are decisions about problems for which there is no precise model or formula. A structured decision will however be taken if the business policy determines otherwise.
Decision-making styles
Decision-making styles refer to the way decisions are taken. It is often linked to the level of decision making.
Centralised decisions Top-level management makes these. The style is often described as authoritarian. Such criticism is normally made only when decisions drastically affect employees without consulting them.
Decentralised decisions
These are decisions made at the lowest level in the business where employees have the skill and knowledge to make a decision. Delegation, which will be discussed later, is an integral part of this style.
Participative decision-making
This style refers to the involvement of small groups in the decision-making process. The motivation for this is to make use of all the human resource skills available, involve those whom such a decision is going to affect and to ensure acceptance of such decisions.
4.2 Personal influences
Decisions are taken by people and people differ. It is therefore to be expected that different people will accept decisions in a different way. A few examples are: Impulsive
This type of manager takes decisions without any knowledge or appropriate information about the matter concerned. Emotions are usually involved.
Over-cautious
Hesitance without a good reason is the best description for this approach. The uncertainty about the results of the decision is the main contributor to this.
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