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Business Management

Decision-making in business

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Types of decisions

Decisions are part of the manager's remit. Difficult choices may have to be made for the common good of the organisation. There are three types of decision in business:

  • Strategic decisions
  • Tactical decisions
  • Operational decisions
Pyramid representing the three layers of management and their roles. Senior management and Strategic, dealing with policy decisions, and their work is long term, complex and non-routine. Middle management is tactical, dealking with how to achieve policy, and their work is medium term and less complex. Junior management are operational, dealing with day to day decisions, and the work is simpler and more routine.

Strategic decisions are long term, complex decisions made by senior management. These decisions will affect the entire direction of the firm. An example may be to become the market leader in their field.

Tactical decisions are medium term, less complex decisions made by middle managers. They follow on from strategic decisions and aim to meet the objectives stated in any strategic decision. For example in order to become the market leader, a firm may have to launch new products/services or open new branches.

Operational decisions are day to day decisions made by junior managers that are simple and routine. This could involve the regular ordering of supplies or the creation of a staff rota.

Mission statement

A Mission Statement is a formal written statement of the objectives and aims of a company. The BBC's mission statement is:

"To enrich people's lives with programmes and services that inform, educate and entertain."

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