Understanding Management Decision Types

​Management Decisions and Categories
In the course of their daily responsibilities, executives face a range of decisions, which can be categorized into four (4) dimensions based on factors such as: the level of control of outcomes, and performance. These factors define a framework useful in categorizing managerial decisions such as:

1. Routine Choices and Judgments - In these decisions we have no control over outcomes and our performance is absolute (we are not competing with anyone). Examples of these decisions include consumer choices - picking from product selection in a supermarket - and personal investment decisions, or or administrative decisions (e.g., where to hold a company's picnic, etc.).
2. Influencing Outcomes - These are decisions that relate to much of what we do in life - using our energy and talents to make things happen. These involve situations where we can control judgment or outcomes to perform well. Examples include determining how long we will need to complete a project or operational decisions; (e.g., which jobs to schedule into production, etc.). That's a judgment we can control, and performance is absolute.
3. Placing Competitive Bets - In this dimension, we cannot influence outcomes, but performance is no longer a matter of absolute performance. It depends on how well we do relative to others. The best decisions must anticipate the moves of rivals. This is the essence of strategic thinking.
4. Strategic Management Decisions - Strategic management by definition is the ability to influence outcomes by the way executive managers lead and communicate, and through their ability to inspire and encourage people to perform better than the competition. For these decisions, we can actively influence outcomes, and success means doing better than rivals. They involve strategic thinking - the ability of the organization to plan - and the ability to influence the desired outcomes through its people, and the need/expectation to outperform rivals.

​The quality of decisions and decision-making can be improved substantially, if before making any decision, the decision-maker is aware of the type of decision needed pursuant to the issue and problem at stake. For routine judgments and choices, where we cannot influence outcomes and need not consider the competition, decision-makers can benefit from knowledge of well-known lessons about avoiding common biases to make good sense and result in good decisions.