Programmed Decisions

Definition

Programmed decisions are routine, repetitive decisions that organizations make in response to well-structured, frequently occurring problems. They are guided by established policies, procedures, and rules, allowing for a systematic and efficient approach to decision-making.

5 Must Know Facts For Your Next Test

1. Programmed decisions are typically made in response to well-defined, structured problems that the organization has encountered before.
2. These decisions are guided by established organizational policies, procedures, and rules, which provide a systematic approach to decision-making.
3. Programmed decisions are often supported by decision support systems (DSS) that provide relevant data, models, and analytical tools to aid the decision-making process.
4. The use of programmed decisions allows organizations to respond quickly and efficiently to routine problems, freeing up resources to focus on more complex, nonprogrammed decisions.
5. Programmed decisions are generally less time-consuming and require less cognitive effort compared to nonprogrammed decisions, which involve more creativity and analysis.

Review Questions

• Explain how programmed decisions differ from nonprogrammed decisions in the context of managerial decision-making.
  • Programmed decisions are routine, repetitive decisions that organizations make in response to well-structured, frequently occurring problems. These decisions are guided by established policies, procedures, and rules, allowing for a systematic and efficient approach. In contrast, nonprogrammed decisions are unique, complex decisions that organizations face in response to novel, unstructured problems. Nonprogrammed decisions require a more creative, analytical approach and are not guided by predetermined policies or procedures. The key difference lies in the level of structure and familiarity of the problem being addressed, with programmed decisions handling well-defined, recurring issues and nonprogrammed decisions tackling more complex, novel challenges.
• Describe how decision support systems (DSS) can assist in the process of making programmed decisions.
  • Decision support systems (DSS) are computer-based information systems that can aid in the decision-making process for both programmed and nonprogrammed decisions. In the context of programmed decisions, DSS can provide relevant data, models, and analytical tools to support the systematic and efficient approach required. DSS can help gather and analyze data, apply established policies and procedures, and generate recommendations or forecasts to guide the programmed decision-making process. By leveraging the capabilities of DSS, organizations can make more informed, consistent, and timely programmed decisions, freeing up resources to focus on more complex, nonprogrammed decisions that require a higher level of creativity and analysis.
• Evaluate the role of organizational policies in the context of improving the quality of programmed decision-making.
  • Organizational policies play a crucial role in improving the quality of programmed decision-making. These formal guidelines and rules establish the parameters for decision-making and ensure consistency in how an organization responds to recurring situations. By having well-defined policies in place, programmed decisions can be made more efficiently and effectively, as decision-makers can rely on established procedures and rules to guide their choices. This reduces the cognitive effort required and minimizes the risk of inconsistent or suboptimal decisions. Additionally, organizational policies can be regularly reviewed and updated to adapt to changing circumstances, further enhancing the quality of programmed decisions. Overall, the presence of clear, comprehensive policies is a key factor in improving the quality and consistency of programmed decision-making within an organization.

Related terms

Nonprogrammed Decisions: Nonprogrammed decisions are unique, complex decisions that organizations face in response to novel, unstructured problems. They require a more creative, analytical approach and are not guided by predetermined policies or procedures.

Decision Support Systems (DSS): Decision support systems are computer-based information systems that assist decision-makers by providing relevant data, models, and analytical tools to support programmed and nonprogrammed decision-making.

Organizational Policies: Organizational policies are formal guidelines and rules that establish the parameters for decision-making and ensure consistency in how an organization responds to recurring situations.