UNIT- 2

ORGANIZATIONAL PLANNING
 What is Organizational Planning?
• Organizational planning is the process of defining a
company’s reason for existing, setting goals aimed
at realizing full potential, and creating increasingly
discrete tasks to meet those goals.
• There are four phases of a proper organizational
plan:
• Strategic,
• Tactical,
• Operational, and
• Contingency.
Strategic
A strategic plan is the company’s big picture. It defines the
company’s goals for a set period of time, whether that’s one
year or ten, and ensures that those goals align with the
company’s mission, vision, and values. Strategic planning
usually involves top managers, although some smaller
companies choose to bring all of their employees along
when defining their mission, vision, and values.
Tactical
The tactical strategy describes how a company will implement
its strategic plan. A tactical plan is composed of several
short-term goals, typically carried out within one year, that
support the strategic plan. Generally, it’s the responsibility
of middle managers to set and oversee tactical strategies,
like planning and executing a marketing campaign.
Operational
Operational plans encompass what needs to happen continually, on
a day-to-day basis, in order to execute tactical plans.
Operational plans could include work schedules, policies, rules,
or regulations that set standards for employees, as well as
specific task assignments that relate to goals within the tactical
strategy, such as a protocol for documenting and addressing
work absences.
Contingency
Contingency plans wait in the wings in case of a crisis or
unforeseen event. Contingency plans cover a range of possible
scenarios and appropriate responses for issues varying from
personnel planning to advanced preparation for outside
occurrences that could negatively impact the business.
Companies may have contingency plans for things like how to
respond to a natural disaster, malfunctioning software, or the
Organizational planning
 Organizational planning

1. Develop the strategic plan

• Steps in this initial stage include:
• Review mission, vision, and values
• Gather data about company, like performance-
indicating metrics from sales department
• Perform a SWOT analysis; take stock of company’s
strengths, weaknesses, opportunities, and threats
• Set big picture goals that take mission, vision,
values, data, and SWOT analysis into account
2. Translate the strategic plan into tactical steps
• At this point, it’s time to create tactical plans. Bring in
middle managers to help do the following:
• Define short-term goals—quarterly goals are
common—that support the strategic plan for each
department, such as setting a quota for the sales
team so the company can meet its strategic revenue
goal
• Develop processes for reviewing goal achievement to
make sure strategic and tactical goals are being met
• Develop contingency plans, like what to do in case
the sales team’s CRM malfunctions or there’s a data
breach
3. Plan daily operations

• Operational plans, or the processes that determine how individual employees spend their

day, are largely the responsibility of middle managers and the employees that report to

them.

• For example, the process that a sales rep follows to find, nurture, and convert a lead into

a customer is an operational plan. Work schedules, customer service workflows, all aid a

sales department in reaching its tactical goal—in this case, a sales quota—so they fall

under the umbrella of operational plans.

• This stage should include setting goals and targets that individual employees should hit

during a set period.

• Managers may choose to set some plans, such as work schedules, themselves. On the

other hand, individual tasks that make up a sales plan may require the input of the entire

team. This stage should also include setting goals and targets that individual employees

should hit during a set period.

4. Execute the plans

• It’s time to put plans into action. Theoretically, activities carried out on a day-to-day basis (defined by

the operational plan) should help reach tactical goals, which in turn supports the overall strategic

plan.

5. Monitor progress and adjust plans

• No plan is complete without periods of reflection and adjustment. At the end of each quarter or the

short-term goal period, middle managers should review whether or not they hit the benchmarks

established in step two, then submit data-backed reports to C-level executives.

• For example, this is when the manager of the sales department would run a report analyzing

whether or not a new process for managing the sales pipeline helped the team reach its quota. A

marketing team, on the other hand, might analyze whether or not their efforts to optimize

advertising and landing pages succeeded in generating a certain number of leads for the sales

department.

• Depending on the outcome of those reviews, 0rg anization may wish to adjust parts of its strategic,

tactical, or operational plans. For example, if the sales team didn’t meet their quota their manager
 Planning Process
• Plan
– A statement of action steps to be taken in order to
accomplish the objectives
• Koontz and O’ Donnell say planning “is deciding in
advance what to do, how and when to do it and
who is to do it. Planning bridges the gap between
where we are and where we want to go. It makes it
possible for things to happen which would, but for
planning, not happen.”
 Plan and Planning
• A plan is a commitment to particular course of
action whereas planning is an activity consisting of a
process.
• Planning involves determination of objectives of the
business, formation of programmes and courses of
action for their attainment, development of
schedules and timings of action and assignment of
responsibilities for their implementation.
 Characteristics of planning:
1 . Planning is looking into the future.
2. Planning involves pre-determined line of action.
3. Planning requires considerable time for
implementation.
4. Planning is a continuous process.
5. Planning is to achieve pre-determined objectives in a
better way.
6. Planning is done for a specific period.
7. Planning not only selects the objectives but also
develops policies, programmes and procedures to
achieve the objectives.
8. Planning is required at all levels of management.
 Planning – Components:
The ingredients of planning are as follows:
1 Goals
They are general guidelines that explain what you want to achieve in community.
2 Objectives
Objectives define strategies or implementation steps to attain the identified goals. Unlike goals,
objectives are specific, measurable, and have a defined completion date. They are more
specific and outline the “who, what, when, where, and how” of reaching the goals.
3 Mission
Mission Statement defines the company’s business, its objectives and its approach to reach
those objectives. It tells the basic purpose of organization
4 Vision A Vision Statement describes the desired future position of the company. Elements of
Mission and Vision Statements are often combined to provide a statement of the company’s
purposes, goals and values.
5. Policies:
Objectives determine the ‘what-to-do’ aspect for the persons in the organization, while policies
tell ‘how-to-do’ aspect. Policy statements present broad guidelines for the executives. We
should purchase our raw materials from the local dealers only. This is policy statement of the
purchase department.
6 Procedures:
Policy statements are broad guidelines. While implementing
them a detailed step-by-step routine is necessary. It is called
procedure. It is a desired method to handle an activity
7 Process
A process is a set of interrelated or interacting activities which
transforms inputs into outputs
• A procedure is specified way to carry out an activity or a
process
8. Rules:
Rules is the ultimate analysis of a plan. Procedure and rules are
different in the sense that procedure is a routinized step-by-
step arrangement, whereas rule has no order.
‘Do not smoke in factory premises’ is a rule, but ‘how to
requisition goods from the stores’ is a procedure.
9. Budgets:
Budget is also a plan where estimated results are
shown in terms of money. Budget is a very
important tool for planning in many organizations,
though it is also a tool of control budget fails as a
control device if there is no plan to compare the
actual against the estimated figures. Budget is a
device for cost control also.
10. Strategies:
Strategy means tactical planning in competitive
environment. Organizations should plan not in
isolation, but in keeping with the forces of external
environment — our suppliers, our customers,
 Takeaway 2: Types of Plans Used by Managers
Plans

Most of us
• 3 month time
frame

A few of us
• 1 year time frame

Very few of us
• 20 year time frame
 Types of Plans
We can classify planning on the basis of following
dimensions :-
1.Organizational level :-
i. Corporate
ii. Divisional
iii. Functional planning
2.Focus :-
i. Strategic
ii. Operational
iii. Tactical planning
3.Time period :-
i. Long range
ii. Medium range
iii. Short range
 On Basis of Level Planning:

(i) Corporate planning (Top Level):-

Corporate planning may be defined as a systematic and comprehensive
process of planning taking into account of the resources and the
capability of the organization and the environment within which it
has to operate viewing the organization as a total corporate unit.
Corporate planning is strategic in nature and it covers entire spectrum
of organizational activities. It lays down the basic objectives , policies
and strategies for the organization as a whole.
It usually covers a long period of five years or even more than this.
Corporate planning provide for future contingencies and attempts to
match the organizational resources with the opportunities and
threats in the external environment.
Plans at corporate level are formulated by the top level managers and
they integrate various divisional and functional plans of the
enterprise.
(ii) Divisional Planning (Middle Level) :-
Divisional planning relates to a particular department or division. Thus it
sets the objectives , policies and program s of a particular division or
department in tune with the corporate plans of the enterprise.
The divisional head and the middle level managers are responsible for
divisional plans. For instance , financial planning is the responsibility of
finance manager and sales budget is the responsibility of marketing
manager.

(iii) Functional planning (Lower Level) :-

Sectional or unit planning is highly specific as it is done to achieve the
divisional objectives.
Its focus is to lay down detailed plans for a particular unit for day to day
guidance of personal working there.
The first line managers are responsible for developing plans for their
units in the light of divisional plans. Such plans are more specific and
detailed as compared to divisional and corporate plans.
 Focus of Planning
(i) Strategic Planning.
Strategic planning is the process of deciding objectives of
the organization and determining the manner in which the
resources of the enterprise are to be deployed to realize the
objectives in the uncertain environment. A strategy
represents the general direction of the organizational
efforts.
It is the way in which the management choose to utilize the
organization resources to reach its objectives.
It involves a multilateral relationships among the organization,
its resources and the environment.
Strategic plans are made by the top management of the firm
after taking into account the firm’s strengths and
weaknesses in the light of internal and external
ii) Tactical Planning.

Tactical plans are made for short term moves and necessary
for supporting the strategic plans and achieving firm’s
objectives. They are required to meet the challenges of
sudden changes in the environmental forces.
For instance, tactical plans may be made to handle a sudden
fall in the demand of firm’s products of unexpected move
by a competitor.
Tactical planning may also become necessary to secure big
orders by changing the price policy, terms of conditions and
discount, etc. The nature of a tactical plan is dictated by the
threats posed by the environment.
For example, if you decide one of the best ways to reach your target consumer is TV
advertising, then the tactical plan needs to carefully spell out the specifics of the
TV campaign.
(iii) Operational Planning.
Operational planning is concerned with the efficient use
of resources already allocated and with the
development of control mechanism to ensure efficient
operation so that organizational objectives are achieved.
It lays down programs, budgets, projects, policies,
procedures, rules, etc. to implement the strategic plan.
Operational plans provide the details of how the strategic
plans will be accomplished.
In other words, the details of how the strategic plans will
be accomplished. In other words, the details that
activate the strategic plan are domain of operational
planning. An operational plan as often more specific
than a strategic plan.
 Range or Time Span of Planning
(i) Long – range Planning.
• Long range planning is the process of establishing long term goals, without
strategies, policies and programs to achieve these goals. In other words, long range
planning sets long term goals for the enterprise formulates strategic plans for
attaining these goals.
• It generally covers a period ranging from five years to twenty years or even more.
The period will vary from organization to organization. It may be five years for
departmental stores and at least twenty-five years for a company intending to take
up the production of the timber.
• The purpose of long-range planning may include technological leadership, increase
in market share, globalization of production and marketing, public, image, etc.
• Long range planning may involve capital budgeting, product planning, project
planning, acquisition of completing units. It may involve complete change in the
outlook of the business.
• It deals with the broad technological, financial competitive aspects of the business.
Because of this, long-range planning is associated with a great deal of uncertainty.
Its success will be determined by the ability of the organization to predict and deal
with the environment.
(ii) Intermediate or Medium-range Planning.
Intermediate plans are made to support the long term
plans. They may relate to department of new
products and markets.
Product publicity, increasing return on investment
from the existing products and markets, etc. Medium-
term planning usually covers a period of more than
one year but less than five years.
The length of period may vary from one business to
another depending upon the nature of business, risks
and uncertainties, government control, changes in
technology, nature of market, etc.
(iii) Short-range Planning.
• Short range planning relates to period of upto one year,
generally. Such plans are made to achieve short-term
goals.
• Short range planning is concerned more with the
current or near-future operations of the enterprise. It
may be considered as a step by step approach to
medium and long-range planning.
• They are quite specific in nature such as change of
product design, training of workforce, reduction of
inventory levels, preparation of production budget and
so on.
• Short-range planning is generally action-oriented and is
Steps
Involved in
Planning
 Steps Involved in Planning
1Define objectives
The first, and most crucial, step in the planning process is to
determine what is to be accomplished during the planning period.
The vision and mission statements provide long-term, broad guidance
on where the organization is going and how it will get there.
The planning process should define specific goals and show how the
goals support the vision and mission. Goals should be stated in
measurable terms where possible. For example, a goal should be “to
increase sales by 15 percent in the next quarter” not “increase sales
as much as possible.”
Example:
• A mobile phone company sets the objective to sell 2,00,000 units next
year, which is double the current sales.
• 2. Develop premises
• Planning requires making some assumptions about the future. We
know that conditions will change as plans are implemented and
managers need to make forecasts about what the changes will be.
• These include changes in external conditions (laws and
regulations, competitors’ actions, new technology being available)
and internal conditions (what the budget will be, the outcome of
employee training, a new building being completed).
• These assumptions are called the plan premises. It is important
that these premises be clearly stated at the start of the planning
process. Managers need to monitor conditions as the plan is
implemented. If the premises are not proven accurate, the plan
will likely have to be changed.
• Example:
• The mobile phone company has set the objective of 2,00,000 units
sale on the basis of forecast done on the premises of favorable
3. Evaluate alternatives
• There may be more than one way to achieve a goal. For
example, to increase sales by 12 percent, a company could
hire more salespeople, lower prices, create a new marketing
plan, expand into a new area, or take over a competitor.
• Managers need to identify possible alternatives and
evaluate how difficult it would be to implement each one
and how likely each one would lead to success. It is valuable
for managers to seek input from different sources when
identifying alternatives. Different perspectives can provide
different solutions.
Example:
• The Mobile company has many alternatives like reducing
price, increasing advertising and promotion, after sale
service etc.,
4 Identify resources
• Next, managers must determine the resources needed to implement the
plan.
• They must examine the resources the organization currently has, what
new resources will be needed, when the resources will be needed, and
where they will come from.
• The resources could include people with particular skills and experience,
equipment and machinery, technology, or money.
• This step needs to be done in conjunction with the previous one, because
each alternative requires different resources. Part of the evaluation
process is determining the cost and availability of resources.
5 Plan and implement tasks
• Management will next create a road map that takes the organization
from where it is to its goal.
• It will define tasks at different levels in the organizations, the sequence
for completing the tasks, and the interdependence of the tasks identified.
• Techniques such as Gantt charts and critical path planning are often used
to help establish and track schedules and priorities.
6 Determine tracking and evaluation methods
• It is very important that managers can track the progress of
the plan.
• The plan should determine which tasks are most critical,
which tasks are most likely to encounter problems, and which
could cause bottlenecks that could delay the overall plan.
• Managers can then determine performance and schedule
milestones to track progress.
• Regular monitoring and adjustment as the plan is
implemented should be built into the process to assure things
stay on track.
• Example:
• A proper feedback mechanism should be developed by the
mobile phone company throughout its branches so that the
actual customer response, revenue collection, employee
 Planning
Advantages Limitations
1. Utilization of resources 1. Unreliability of
2. Economy in operations forecasts
3. Effective control 2. Time consuming
4. Strengths competitive 3. High cost
ability 4. Inflexibility
5. Motivation 5. Organizational politics
MBO :MANAGEMENT BY OBJECTIVES
– INTRODUCTION
• Peter Drucker in 1954.
• Concept of planning
• Complishment of objectives through participation of
all concerned persons
• Participative and democratic style of management
Main Concept
• The principle behind Management by Objectives
(MBO) is to make sure that everybody within the
organization has a clear understanding of the aims,
or objectives, of that organization, as well as
awareness of their own roles and responsibilities in
achieving those aims.
• The complete MBO system is to get managers and
empowered employees acting to implement and
achieve their plans, which automatically achieve
those of the organization.
• Superior subordinate participation Joint goal setting
Support and encouragement from superiors
Definition
• MBO is "a process whereby superior and
subordinate of an Organization jointly define its
common goals, define each individual's major areas
of responsibility in terms Of results expected of him
and use these measures as guides for operating the
unit and assessing the contribution of each of its
members.”
 Objectives or Purposes
• Translate main statement into operational terms.
• To give directions and set standards for the measurement of
performance.
• To measure and judge performance
• To relate individual performance to organizational goal
• To foster increasing competence and growth of subordinates
• To enhance communication between superiors and
subordinates
• To serve as a basis for judgments about salary and promotion
• To stimulate subordinates motivation
• To serve as a device for organizational control and integration
• To set long term and short term objectives
With MBO, came the concept of SMART goals i.e. goals that are:
• Specific
• Measurable
• Achievable
• Relevant, and
• Time bound.
Features of MBO
 Superior-subordinate participation
 Joint goal-setting
 Clarity of goals
 Better communication and Coordination
 Joint decision on methodology
 Makes way to attain maximum result
 Support from superior
 Steps in Management by Objectives Process

1. Define organization goals

Setting objectives is not only critical to the success of any company, but it also
serves a variety of purposes. It needs to include several different types of
managers in setting goals. The objectives set by the supervisors are
provisional, based on an interpretation and evaluation of what the
company can and should achieve within a specified time.

2. Define employee objectives

Once the employees are briefed about the general objectives, plan, and the
strategies to follow, the managers can start working with their subordinates
on establishing their personal objectives. This will be a one-on-one
discussion where the subordinates will let the managers know about their
targets and which goals they can accomplish within a specific time and with
what resources. They can then share some tentative thoughts about which
goals the organization or department can find feasible.
3. Continuous monitoring performance and progress
Though the management by objectives approach is necessary for increasing
the effectiveness of managers, it is equally essential for monitoring the
performance and progress of each employee in the organization.
4. Performance evaluation
Within the MBO framework, the performance review is achieved by the
participation of the managers concerned.

5. Providing feedback
In the management by objectives approach, the most essential step is the
continuous feedback on the results and objectives, as it enables the
employees to track and make corrections to their actions. The ongoing
feedback is complemented by frequent formal evaluation meetings in
which superiors and subordinates may discuss progress towards objectives,
leading to more feedback.

6. Performance appraisal
Performance reviews are a routine review of the success of employees within
 DECISION-MAKING
Decision-making involves the selection of a course of action from among
two or more possible alternatives in order to arrive at a solution for a
given problem.
The word “decision” is derived from latin word “decido”,meaning to cutoff it
means settlement, a fixed intentition bringing to conclusive result. Main
objective of decision is to give effective result which is help to
organization to for achieve its goal.
 Characteristics Of Managerial Decisions

Risk
Uncertainty

Lack of
Structure Conflict
 Characteristics Of Managerial Decisions
• Lack of structure
– the usual state of affairs in managerial decision making
– programmed decisions - decisions that have been
encountered and made in the past
• have objectively correct answers
• are solvable by using simple rules, policies, or numerical
computations
– nonprogrammer decisions - new, novel, complex
decisions having no proven answers
• decision maker must create or impose a method for making
the decision
 Comparison Of Types Of Decisions

Programmed Decisions Nonprogrammed Decisions

Problem Frequent, repetitive, routine. Novel, unstructured. Much

Much certainty regarding uncertainty regarding cause and
cause and effect relationships. effect relationships.

Procedure Dependence on policies, Necessity for creativity, intuition,

rules, and definite procedures. tolerance for ambiguity, creative
problem solving.

Business Periodic reorders of inventory. Diversification in new products

example and markets.
 Characteristics Of Managerial Decisions
• Uncertainty and risk (cont.)
– Certainty - have sufficient information to predict
precisely the consequences of one’s actions
– Uncertainty - have insufficient information to know the
consequences of different actions
• cannot estimate the likelihood of various consequences of
their actions
– Risk - available information permits estimation of the
likelihood of various consequences
• probability of an action being successful is less than 100
percent, and losses may occur
• good managers prefer to manage risk
 Characteristics Of Managerial Decisions
(cont.)
• Conflict
– Opposing pressures from different sources
– Occurs at two levels
• Psychological conflict - individual decision makers:
– Perceive several attractive options
– Perceive no attractive options
• Conflict between individuals or groups
– Few decisions are without conflict
 The Stages Of Decision Making
Identifying and
diagnosing
the problem
Generating
alternative
solutions

Evaluating
alternatives

Making the
choice

Implementing
the decision

Evaluating
the decision
 Stages Of Decision Making
• Identifying and diagnosing the problem
– recognize that a problem exists and must be solved
• problem - discrepancy between current state and:
– past performance
– current performance of other organizations
– future expected performance
• decision maker must want to resolve the problem and have the
resources to do so
• Generating alternative solutions
– ready-made solutions - ideas that have been tried before
• may follow the advice of others who have faced similar problem
– custom-made solutions - combining new ideas into solutions
 Stages Of Decision Making (cont.)
• Evaluating alternatives
– Determining the value or adequacy of the alternatives
– Predict the consequences that will occur if the various options
are put into effect
• Managers should consider several types of consequences
– Success or failure of the decision will affect the track record of
the decision maker
– Contingency plans - alternative courses of action that can be
Implemented based on how the future unfolds
• Contingency plans are necessary to prepare for different scenarios
• For example, when choosing a place to establish a new business, the
criteria might include rental costs, availability of skilled labor, access
to transportation and means of distribution, and proximity to
customers. Based on the relative importance of these factors, a
business owner makes a decision that best meets the criteria.
 Stages Of Decision Making (cont.)
• Making the choice
– Maximize - a decision realizing the best possible
outcome
• Requires searching thoroughly for a complete range of
alternatives
• Each alternative is carefully assessed
• Compare one alternative to another
– Satisfies - choose an option that is acceptable although
not necessarily the best or perfect
• compare the choice with the goal, not against other options
• search for alternatives ends when an okay solution is found
– Optimizing - achieving the best possible balance among
several goals
 Stages Of Decision Making (cont.)
• Implementing the decision
– Those who implement the decision must:
• Understand the choice and why it was made
• Be committed to its successful implementation
– Can’t assume that things will go smoothly during
implementation
• Identify potential problems
• Identify potential opportunities
– Always expect the unexpected
 Steps In The Implementation Plan

Determine how things will

look when the decision
is fully operational

Assign responsibility for Order the steps necessary

each step to specific to achieve a fully
individuals operational decision
Implementation
Plan

List the resources and

Estimate the time needed activities required to
for each step implement each step
 Stages Of Decision Making (cont.)
• Evaluating the decision
– collecting information on how well the decision is
working
– evaluation is useful whether the feedback is positive or
negative
– if decision appears inappropriate, the process cycles
back to the first stage
• The best decision
– nothing can guarantee a “best” decision
– must be confident that the procedures used are likely to
produce the best decision given the circumstances
 Barriers To Effective Decision Making
• Psychological biases
– Biases that interfere with objective rationality
– Illusion of control - a belief that one can influence
events even when one has no control over what will
happen.
– Discount the future - weigh short-term costs and
benefits more heavily than longer-term costs and
benefits.
• The avoidance of short-term costs or the seeking of short-term
rewards may result in negative long-term consequences.
 Barriers To Effective Decision Making (cont.)
• Time pressures
– Today’s economy places a premium on acting quickly
and keeping pace
– In order to make timely and high-quality decisions one
must:
• Focus on real-time information
• Involve people more effectively and efficiently
• Rely on trusted experts
• Take a realistic view of conflict
• Social realities
– Many decisions result from intensive social interactions,
bargaining, and politicking
Programmed And Non-Programmed Decisions
Programmed decisions are one that relates to the matters of routine
type and problems that are of repetitive nature. These decisions are
taken following the specific standard procedure for dealing with all such
problems. Programmed decisions are basically taken by management at
the lower level. Such decision involves like purchasing raw materials and
spare parts, granting the leave to an employee, etc.

On the other hand, non-programmed decisions are meant for dealing

with problems of difficult nature and which can’t be solved easily. These
decisions arise out of problems that are not routine or daily occurring.
There is no standard procedure for solving such issues. Non-
programmed decisions are very crucial for an organization and are taken
by upper-level management. Decisions at a higher level may include
introducing new products in the market, setting up a new branch of
business, and many more.
Routine And Strategic Decisions
Routine decisions relate to the decisions which are taken on a
routine basis for the daily functioning of the business. These
decisions can be taken quickly without much evaluation,
analysis, and in-depth study. Generally, higher management
delegates power to their subordinates for taking such
decisions within the policy of business.

Whereas, strategic decisions are key decisions influencing the

goals, objectives, and other crucial policy matters of the
organization. These decisions require proper analysis and
evaluation of distinct alternatives as they require an
investment of funds. Strategic decisions are taken by the top
and middle-level management teams. These also influence
the routine decisions taken on a daily basis and hence require
utmost care before taking them.
Organizational And Personal Decisions
Organizational decisions are decisions that are
taken by an individual as an executive in his
official capacity. These decisions are taken on
the organization’s behalf and can be delegated
to subordinates.

Whereas, when decisions are taken by an

executive in his personal capacity, not relating
to the organization then they are termed as
personal decisions. Authority of taking personal
decisions cannot be delegated to subordinates.
Tactical (Policy) And Operational Decisions
Decisions that are concerned with distinct policy matters and
the planning of business are called policy decisions. These
decisions have a long-term influence on the performance of
an organization. these decisions are taken by the top
management team. These decisions include decisions related
to the volume of production, the channel of production,
location of business plants, etc.

Operational decisions related to daily operations and

functioning of business enterprise. These decisions make it
possible to implement the plan and policies taken by
managers at the top level. Middle and low-level managers
usually take these decisions.
Individual And Group Decisions
Decisions taken by a single individual in his official capacity
are called individual decisions. This decision type is more used
by organizations that are smaller in size and have an
autocratic management style.

Group decisions, on the other hand, are taken collectively by

the management and employees of the business together.
This group of individuals taking decisions are also termed as a
standing committee and only the pertinent matters are
referred to this committee. Group decisions mainly focus on
involving a large number of individuals in their process of
decision-making. Decisions taken by the board of directors of
the company came in the category of group decisions.
Major And Minor Decisions
Major and minor is another important type of
classification of decisions. Major decisions
relate to key aspects of business organization
and are taken by top-level managers. The
decision to buying new factory premises is a
major decision.
Minor decisions are taken by peoples at lower
levels in business organizations and are of less
importance. Purchase of office stationery for
daily use is a minor decision that can be taken
by the office superintendent.
THE END