Outline the various types of decisions based on level of management Hierarchy.
Outline the various types of decisions based on level of management Hierarchy.
Ans.
Level of Management Activity:
There are three different. levels of management activities in planning and control hierarchy, viz. – Strategic Level, Tactical Level and Supervisory Level.
1. Strategic Level Decisions :
(a) Top/ Strategic Level Management is concerned with developing the organisational mission, objectives and strategies. Decisions made at the top level to handle problems relating to survival and success of the organisation are called Strategic Decisions.
(b) Strategic Decisions have a vital impact on the direction and functioning of the firm. E.g. Decisions on plant location, introduction of new products, major fund raising and investment operations, adoption of new technology, acquisition of outside enterprises, etc.
(c) Strategic Decisions involve a high level of analysis and judgement by the top management.
(d) Strategic Decisions mostly in the nature. of are non-programmed decisions.
(e) Strategic Decisions are made under conditions of partial knowledge or ignorance.
2. Tactical Level Decisions:
(a) Tactical Level lies in middle of Managerial hierarchy. At this level, Managers plan, organise, lead and control the activities of other Managers/ Subordinates.
(b) Decisions made at this middle level are called Tactical Decisions (also called Operational Decisions).
(c) These decisions are essentially made to implement Strategic Decisions. To implement one strategic decision, many tactical decisions are to be made.
(d) Tactical Decisions are of a structured nature and break down the strategic decisions into implementable small packages. They are also more specific, short, functional and made in a relatively closed setting.
(e) Information for tactical decisions are more easily available and digestible. They are less surrounded by uncertainty and complexity. The decision variables can be forecast and quantified without difficulty and their impact is localised and short-ranged.
(f) Tactical Decisions are made with a strategic focus.
3. Supervisory Level Decisions:
(a) This is the lowest basic level in Managerial hierarchy.
(b) The duty of Managers at this level is to co-ordinate the work of other non-Managerial employees.
(c) The supervisory level of management has to ensure that specific tasks are carried out effectively and efficiently by the other employees.
