Levels of Decisions Making

Characteristic                             Operational                 Tactical                       Strategic

 Degree of structure                    High                                 Moderate                      Low

Degree of uncertainty                 Low                                  Moderate                      High

Degree of judgement                 Low                                   Moderate                      High

Problem Variety                       Low                                  Moderate                      High

Time horizon                            Days                                   Months                        Years

Programmable decisions           Most                                   Some                            None

Planning decisions                     Few                                  About half                       Most

Control decisions                      Most                                  About half                       Few

In addition to the three levels of decision making, there are two types of decisions; programmable and non

programmable. Programmable decisions are decisions for which policy standards or guidelines are already established. For this reason they are often called structured decisions. These decisions are routine in nature and can be made by reference to previously established policy. An example of a programmable decision is a credit granting decision based on the income, years employed, and so on of an individual applying for credit. Programmable decisions do not have to be made by a computer based system. Often these decisions are made by lower level managers or supervisors.

Non-programmable decisions deal with ill-defined and unstructured problems. These decisions concern the future and contain many variables whose impact on the outcome cannot be qualified. These unstructured decisions require highly skilled managers.

Examples of such decisions are those regarding plant expansion, new products, and mergers. The characteristics of the information required at each level of decision making are summarized in the table below.

                                                                         Levels of Decisions Making

Characteristic                                         Operational     Tactical           Strategic

1.          Dependence on computer

            information system                    High                 Moderate          Low to moderate

2.          Dependence on internal

            information                               Very-high          High                 Moderate

3.          Dependence on external

            information                               Low                 Moderate             Very high

4.          Need for on-line information      Very-high          High                   Moderate

5.          Need for computer graphics       Low                 Moderate               High

6.          Use of real-time information      Very-high          High                   Moderate

7.          Use of productive information    Low                 High                    Very high

8.          Use of historical information      High                 Moderate                Low

9.          Use of what-if information         Low                 High                     Very high

10.        Use of information stated in

            money form                              Low                 Moderate                High