Types Of Problems
What is a structured problem
A straightforward, familiar, and easily defined problem.
What is a programmed decision?
A repetitive decision that can be handled using a routine approach.
What is certainty?
A decision-making condition where a manager knows all outcomes with certainty.
What type of decisions do lower-level managers primarily make?
Programmed decisions, as they deal with routine and structured problems.
What is a procedure in decision-making?
A series of interrelated, sequential steps used to respond to a structured problem.
What is an unstructured problem?
A problem that is new or unusual, with ambiguous or incomplete information.
What is a nonprogrammed decision?
A unique and nonrecurring decision that requires a custom-made solution.
What is risk?
A condition where managers can estimate the likelihood of different outcomes.
What type of problems do top-level managers primarily face?
Unstructured problems that require nonprogrammed decisions.
What is a rule in decision-making?
An explicit statement that tells employees what can or cannot be done.
Why do structured problems often require less decision-making effort?
Because they have clear solutions and can be handled using established procedures.
Why do companies rely on programmed decisions for structured problems?
Because structured problems have predictable solutions that can be managed efficiently with rules and procedures.
What is uncertainty in decision-making?
A situation where the decision maker has neither certainty nor reasonable probability estimates available.
Why do lower-level managers rely more on rules and procedures?
Because they handle repetitive and routine issues that require consistency.
What is a policy in decision-making?
A guideline for making decisions that allows some flexibility in interpretation.
What type of problem would a company face when deciding whether to enter a new market?
An unstructured problem.
What type of decision would be needed to develop a new corporate strategy?
A nonprogrammed decision.
How do managers handle risk when making decisions?
They use historical data or probability estimates to predict potential outcomes.
How do middle managers contribute to decision-making?
They translate strategic decisions from top managers into operational decisions for lower managers.
Why do companies use rules for structured problems?
To ensure consistency and efficiency in decision-making.
How do structured and unstructured problems differ in the information available?
Structured problems have complete, clear information, while unstructured problems involve ambiguous or incomplete data.
How does the decision-making process differ between programmed and nonprogrammed decisions?
Programmed decisions follow established rules and procedures, while nonprogrammed decisions require custom solutions and analysis.
Why is uncertainty the most challenging condition for decision-making?
Because there is no clear data or past experience to estimate possible outcomes.
Why do top-level managers focus on long-term strategic decisions?
Because they are responsible for guiding the organization’s future direction and handling complex, unstructured problems.
How do policies differ from rules?
Policies provide general guidelines, while rules explicitly state what must or must not be done.