Tools For Decision Making
The following is a summary of decisions and the traditional and modern tools used.
|
Type of decision
|
Traditional Tools
|
Modern Tools
|
|
Programmed (Routine
respective decisions)
|
Habit
Clerical routine,
standard operating
procedures
|
Operational research,
mathematic analysis,
computers, electronic
data processing
|
|
Non-programmed one-shot,
rare special decisions
|
Judgement, credibility,
Institution rule of thumb,
Selection and training of
executives
|
Heuristic problem solving
Constructing heuristic
computer programmes
(knowledge base
intelligence "Expert")
|
Table:Heuristic (Empirical DM)
Programmed decisions are obviously the easiest for managers to make as it is quicker and simple to refer to a policy - but effective managers should only learn of policy as a time saver and remain alert for exceptional cases. A company policy for example put a ceiling on the advertising budget for each product, but a particular product may need an extensive advertising campaign to counter a competitor's newly aggressive marketing strategy. Ultimately managers must use their own judgement whether or not a situation calls for programmed decision.