MANAGEMENT
DECISION MAKING
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Management Decision Making
“Whatever a manager does, he does through
making decisions. These decisions may be
made as a matter of routine. Indeed he may
not even realise that he is making them. Or
they may affect the future existence of the
enterprise and requires years of systematic
analysis. But management is always a
decision-making process.”
The Practice of Management
Peter F Ducker
Management Decision Making
Businesses are faced a variety of decisions in
the:
Long term
Medium term
Short term
Management Decision Making
Long term
Strategic
Medium term
Tactical
Short term
Operational
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Management Decision Making
Long
term
Strategic
High
Risk
Medium
term
Tactical
Medium
Risk
Short
term
Operational
Low
Risk
Strategic Decisions:
are made by the most senior members
of the organisation.
sets the aims and objectives of the
organisation.
gives the organisation its overall
direction, purpose and competitive
edge.
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Strategic Decisions
are taken by:
Board of Directors
Chief
Executives
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Heads of
Department
Strategic Decisions
will affect the
operation of the
organisation over a
number of years.
2000
2007
They are high-risk decisions.
They are not concerned with the details of how
such policies are put into action
Examples of Strategic Decisions
• whether to take over a rival.
• whether to stop producing cars in the UK.
• whether to expand the market for a product
in the Far East.
• whether to install a computer network.
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Tactical Decisions:
are made by the middle managers of
the organisation.
are concerned with putting strategic
decisions into action.
brings together the resources to
achieve the strategic decisions.
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Tactical Decisions
are taken by:
Middle (Senior Staff, Factory Managers)
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Tactical Decisions
will affect the operation
of the organisation over
a period of 6 months to
one year.
will take some time to
put right if the wrong
decision has been taken.
They are medium-risk decisions.
JAN
DEC
Examples of Tactical Decisions
• whether to introduce new working practices in
the factory.
• whether to change staffing levels in a
department.
• whether to set out the office on an openplan basis.
• whether to extend flexi-time for office
staff.
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Operational Decisions:
are made by the junior management
and supervisors of the organisation.
are concerned with the detail of
tactical decisions.
are concerned with the day-to-day
decisions to ensure standards and
targets are met.
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Operational Decisions
are taken
by:
Junior management and supervisors
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Operational Decisions
will affect the operation
of the organisation over
a period from a few days
to a few months.
4 March
If the wrong decision
has been taken it can be
rectified quickly.
They are low-risk decisions.
14 March
Examples of Operational
Decisions
• whether to reorganise part of the filing system
• whether to up-date computer passwords
• how much stationery to hold in the office.
• when to organise a meeting of the sales
staff
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Revision Questions
Try to answer the questions on the next few
slides
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answer them then click on
the action button next to
each question.
Revision Questions 1 & 2
Name the 3 types of decisions
made by organisations.
Which of these decisions are:
Long term
Medium term
Short term
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Revision Questions 3, 4 & 5
What are strategic decisions?
Who makes these decisions?
Give 3 examples of strategic
decisions.
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Revision Questions 6, 7 & 8
What are tactical decisions?
Who makes these decisions?
Give 3 examples of tactical
decisions.
To the next questions
Revision Questions 9, 10 & 11
What are operational decisions?
Who makes these decisions?
Give 3 examples of operational
decisions.
To the next questions
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