Three types of decisions:

20 Feb

There are three types of decisions made by different sections of the organization. Information systems are used to help with these decisions.

Types of decisions

  • Unstructured decisions: These decisions require judgement, evaluation and insight to solve the problem. Unstructured means “decision processes that have not been encountered in quite the same form and for which no predetermined and explicit set of ordered responses exists in the organization”.  (Mintzberg, et al., 1976, 246)  These decisions are seen as novel, important and non routine. There is no well understood procedure for making them. An example of an unstructured decision that management may face could be deciding if the company should enter into a new market or would it be more beneficial for them to stay in just their current market. Information systems help to make such decisions. 
  • Semistructured decisions: these decisions have elements of both structured and semi structured decisions. Only part of the problem has a clear-cut answer provided by accepted procedure. A semi structured decision is one which is partially programmable but still requires human judgement. There are three dimensions to a semi structured decision:

1. Degree of decision-making skill required.

2. Degree of problem complexity

3. Number of criteria considered

  • Structured decisions:means having processes in place to handle a situation.  The implication is that structured problems are recurring ones.  Because they recur, we put processes and procedures in place to handle them. These decisions are repetitive and routine. They involve definite procedures for answering. Therefore they don’t need to be treated as new each time the decision has to be made. A good example of a structured decision would be the hiring process in a company. its important to create structure around repetitive situations so that a lot of time is not spent on very minor decisions.



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