Chapter # 17Nature and type of Managerial DecisionDecision making is the process of making choices by identifying adecision, gathering information, and assessing alternativeresolutions. Using a step-by-step decision-making process can helpyou make more deliberate, thoughtful decisions by organizingrelevant information and defining alternatives.Programmed decisions are those that are repeated over time and for whichan existing set of rules can be developed to guide the process.Programmed decisions are those made in routine, repetitive, well-structured situations through the use ofpredetermined decision rules.Many programmed decisions are derived from established practices andprocedures or habit. Computers arean ideal tool for dealing with several kinds of complex programmeddecisions. Most of the decisions madeby first-line managers and many by middle managers are programmeddecisions.Non-programmed decisions are those for which predetermineddecision rules are impractical because the situations are novel and/orill-structuredA non-programmed decision definition is a decision that does notfollow a set procedure, and the criteria for such decisions is not well-defined. The main characteristics of an un programmed decision are:Information on which decision is based is generally incomplete orambiguous.Types of Problems and Decisions:Managers will be faced with different types of problems and will usedifferent types of decisions. Anotherdimension of problem is its structure. A problem can be well-structured orpoorly structured.1. Well-structured problems are straightforward, familiar, and easily defined.In handling thissituation, a manager can use a programmed decision, which is a repetitivedecision that can behandled by a routine approach. There are three types of plans forprogrammed decisions.a. A procedure is a series of interrelated sequential steps that can be used torespond to astructured problem.b. A rule is an explicit statement that tells managers what they ought or ought notto do.c. A policy is a guide that establishes parameters for making decisions rather thanspecificallystating what should or should not be done2. Poorly structured problems are new or unusual problems in which information isambiguous orincomplete. These problems are best handled by a non-programmed decision thatis a uniquedecision that requires a custom-made solution.