Programmed Decisions

Definition

Programmed decisions are routine, repetitive, and structured decisions that organizations make to address problems or situations that are well-defined and occur frequently. These decisions are typically based on established policies, procedures, and decision rules, allowing organizations to respond efficiently to familiar situations.

5 Must Know Facts For Your Next Test

1. Programmed decisions are often made using information systems, such as enterprise resource planning (ERP) software, to automate and streamline the decision-making process.
2. Organizations use programmed decisions to handle routine tasks, such as inventory management, payroll processing, and customer service inquiries, in a consistent and efficient manner.
3. Programmed decisions are typically made at the operational or tactical level of an organization, as they are focused on addressing day-to-day problems or situations.
4. The use of programmed decisions allows organizations to free up resources, such as time and cognitive effort, to focus on more complex, nonprogrammed decisions that require strategic thinking and decision-making.
5. Effective programmed decision-making requires a deep understanding of the organization's policies, procedures, and decision rules, as well as the ability to identify when a decision falls within the scope of a programmed decision.

Review Questions

• Explain the key characteristics of programmed decisions and how they differ from nonprogrammed decisions.
  • Programmed decisions are routine, repetitive, and structured decisions that organizations make to address well-defined problems or situations. These decisions are based on established policies, procedures, and decision rules, allowing for efficient and consistent responses. In contrast, nonprogrammed decisions are unique, unstructured, and complex, requiring strategic thinking and decision-making to address novel problems or situations that have no established decision rules or procedures.
• Describe the role of information systems in supporting programmed decision-making and how they contribute to the efficiency and consistency of these decisions.
  • Organizations often use information systems, such as enterprise resource planning (ERP) software, to automate and streamline the process of making programmed decisions. These systems are designed to apply predetermined decision rules and algorithms to handle routine tasks, such as inventory management, payroll processing, and customer service inquiries, in a consistent and efficient manner. By leveraging information systems, organizations can free up resources to focus on more complex, nonprogrammed decisions that require strategic thinking and decision-making.
• Analyze the potential benefits and limitations of relying on programmed decisions in an organizational context, and discuss the importance of striking a balance between programmed and nonprogrammed decision-making.
  • The use of programmed decisions can provide organizations with several benefits, such as increased efficiency, consistency, and the ability to free up resources for more complex decision-making. However, over-reliance on programmed decisions can also lead to potential limitations, such as a lack of flexibility, the inability to address novel problems, and the risk of perpetuating outdated or suboptimal decision rules. To achieve a balance, organizations must carefully assess which decisions can be effectively programmed and which require a more strategic, nonprogrammed approach. This balance allows organizations to leverage the efficiency of programmed decisions while maintaining the agility and strategic thinking necessary to address complex, unique challenges.

Related terms

Nonprogrammed Decisions: Nonprogrammed decisions are unique, unstructured, and complex decisions that organizations make to address novel problems or situations that have no established decision rules or procedures.

Decision Rules: Decision rules are predetermined guidelines or algorithms that organizations use to make programmed decisions in a consistent and efficient manner.

Structured Decision-Making: Structured decision-making refers to the process of making programmed decisions using established policies, procedures, and decision rules to address well-defined problems or situations.