Distinguish with examples programmed and non-programmed decisions
Decision making is the selection of one alternative from among two or more alternatives. In other words, decision making is defined as the process by which a course of action is selected as the best way to deal with specific problem. There are two types of decision making i.e; Programmed Decision and Non-Programmed Decision.
The differences between Programmed and Non-Programmed Decision can be explained as follow;
i- Programmed decision are decisions that have made so many time in the past that managers have developed rules or guideline to be applied when certain situation are expected to occur. In certain situation, manager and employees do not really have to make decision; it is already programmed for them in term of rule, policy and procedure.
The example of programmed decision is used when an inventory manager of restaurant decides to order beef stock because the stock are three-quarter empty. Most programmed decisions are related to daily activities.
On the other hand, non-decision programmed decisions are made in respond to unusual opportunity or threats. Basically, these situations are unique, are poorly defined and largely unstructured. It requires conscious thinking, information gathering and careful consideration of alternatives.
For example, in 2005, Mc Donald’s became aware of a need to respond to growing customer concerns regarding foods high in fat and calories. This is non-programmed decision because for several decades, customers of fast food restaurant were more concerned with the taste and the price rather than healthiness. In response, Mc Donald’s decide to offer healthier alternatives such as substituting apple slices in Happy Meals for French Fries and discontinuing the use of trans-fats.
ii- Programmed decision making are usually made in accordance with some establishment habit, rule or procedures while the nature of problem that requires a non-programmed decision is unstructured and something different. It requires higher level management participation.
iii- In programmed decision making, there will be no error in the decisions because it is a routine and managers usually have the information they need to create rules and guidelines to be followed by others. However, the non-programmed decisions are likely to have error because it causes more problems for managers and is inherently challenging. Sometimes, programmed decision can caused error but it is minor to non-programmed decision.