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FREE online courses on Information Technology - Chapter 1 INFORMATION TECHNOLOGY - Types of decisions

 

Not all decisions are alike; some involve different levels of the organization and some are more important than others.  Anthony (1965) suggests that there are three broad categories of decision made in organizations, a model still widely used today.

 

Strategic Planning

 

In strategic planning the decision maker develops objectives and allocates resources to obtain them. Decisions in this category are characterized by long time periods and usually involve a substantial investment and effort. The development and introduction of a new products is an example of a strategic decision.

 

Managerial Control

 

Decisions involving managerial control concerns the use of resources in the organization and often include personnel or financial problem. For example, an accountant may try to determine the reason for a difference between actual and budgeted costs.

 

Operational Control

 

An operational control decision covers the day to day problems that affect the operation of the firm: What should be produced today in the factory? What items should be ordered for inventory?

 

Who makes the preponderance of each of the three types of decisions? Anthony does not specify who handles each type of decision. However, from the nature of the problems, we suspect that top manager in the organization would spend more time on strategic making than supervisors, and supervisors would be more concerned with operational decisions.

 

 

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