What are Programmed and Non Programmed Decisions?
A programmed and non-programmed decision are two types of decisions in business that are categorized on the basis of their frequency of reoccurrence.
Let’s understand them in detail:
What is Programmed Decision?
A programmed decision is a decision that has a high degree of occurrence in the future. It is repetitive and structured in nature.
Programmed decisions are routine decisions that deal with the regular and repetitive activities of the organization.
Such decisions are based on already established rules, regulations, methods, and procedures.
Managers do not need to invest their high level of analysis when making programmed decisions.
Rather, they make a program after making a real decision. The program itself outlines the steps to take to tackle problems of this nature when they occur.
The making of programmed decisions is in the hands of lower-level managers and they do not affect the long-term performance of the organization.
Some examples of the programmed decision include.
- Making purchase orders.
- Purchasing raw materials.
- Managing different employee leaves.
- Scheduling employees’ work time.
- Settling normal disputes.
- Salary increments.
- Recording of office supplies, etc.
What is a Non-Programmed Decision?
A non-programmed decision is a decision that has fewer degrees of recurrence in the future. These decisions are ill-structured, non-repetitive, unique, and unusual in nature.
Often, this decision is one time only.
If programmed decisions are used to solve repetitive problems non-programmed decisions are used to solve unique and novel problems.
Managers have to think out of the box and use their creativity while making any non-repetitive decision.
As compared to programmed ones these decisions are complex in nature and have a longer impact on the workplace.
Usually, these decisions are made by top-level executives considering the long-term health of the organization.
Some examples of the non-programmed decision include:
- Handling serious industrial problems.
- Adopting new technology.
- Making merger and acquisition decisions.
- Product diversification.
- Changing marketing strategy.
- Dropping an existing product or launching a new product.
- Decisions regarding improving brand image, etc.
Difference Between Programmed and Non Programmed Decisions
The differences between programmed and non-programmed decisions can be pointed out in the following bases.
Definition
A programmed decision is a repetitive decision that is used to solve problems that arise in routine situations.
Whereas, the non-programmed decision is unique and is used to solve new problems for which there are no structured rules and procedures.
Frequency of Reoccurrence
The programmed decisions are repetitive whereas non-programmed ones are novel and unusual.
Time
Since for programmed decisions, there are already established procedures managers can make such decisions in no time. Often for such decisions, he does not even need to invest his analytical knowledge.
But, non-programmed decisions take more time to make the final choice. Since this is novel and un-repetitive managers need to get a step in the decision-making process for every non-programmed decision to make.
Decision Maker
Since programmed decisions deal with regular and routine activities these decisions are made by middle and lower managers.
Whereas, non-programmed decisions are made by top-level managers.
Impact
Programmed decisions have a short-term impact on organizational performance. They are usually not more than 1-3 years old.
On the other hand, non-programmed decisions have a long-term impact on organizational performance and usually last more than 3-5 years.
Related: Group and Individual Decisions
Level of Risk
Programmed decisions carry lower risks as they deal with routine and predictable situations, supported by established procedures.
Non-programmed decisions, on the other hand, involve higher risks due to the uncertainty and uniqueness of the problems they address, often impacting the organization’s long-term future.
Nature of Problem Solved
Programmed decisions focus on operational and structured problems where predefined solutions exist.
Non-programmed decisions handle strategic and unstructured problems that require innovative and creative thinking to resolve.
Documentation and Guidelines
Programmed decisions are well-documented in manuals, rules, and standard operating procedures, guiding decision-makers.
In contrast, non-programmed decisions lack predefined guidelines, requiring managers to rely on experience, judgment, and intuition.
Read More: Characteristics of Decision Making
Similarities between Programmed and Non Programmed Decisions
Despite many differences, non programmed and programmed decisions also have some similarities:
Objective
Both programmed and non programmed decisions are made with the intent to solve problems within the organization.
While the nature of the problems may differ (routine vs. unique), the ultimate objective of both types of decisions is to facilitate smooth functioning and contribute to achieving organizational goals.
Role in Management
Both types of decisions are crucial in the management process.
Programmed decisions ensure that routine activities are handled efficiently without disruptions, while non-programmed decisions address unique challenges or strategic goals, ensuring long-term success.
Together, they form a comprehensive framework for effective decision-making in management.
Read More: Planning Methods with Examples
Reliance on Data
Both programmed and non-programmed decisions require data and information to be effective.
In programmed decisions, historical data, established rules, and past experiences are used, while non-programmed decisions rely on new, detailed, and often extensive data analysis.
The importance of accurate and relevant information is common to both.
Impact on Organizational Performance
Both types of decisions have an impact on organizational performance.
Programmed decisions ensure operational efficiency and day-to-day management, contributing to short-term productivity. On the other hand, non-programmed decisions influence strategic directions and innovations, impacting the organization in the long term.
Despite these differences, both ultimately contribute to overall performance and goal attainment.
Read Next: Organizational and Individual Decision
Sajan Kushmi is a content writer with more than 4 years of experience. He holds BIM Degree. He write on the topics related to Management, Marketing, and Entrepreneurship.