Introduction

Decisions can be crudely split into two kinds. The first relates to decisions connected with current problems that have an immediacy of application, many of which are colloquially referred to as ‘patch-up jobs’. The payoff from each individual decision of this kind is likely to be fairly low, but the frequency of such decisions in any organization is commonly high. The second kind of decision is the search for new opportunities and the making of decisions that will influence the organization's fortunes over the longer term. Managers are generally concerned with both types of decision, the mix for an individual manager depending very broadly on his seniority and level of management. Most junior and middle managers are primarily concerned with the former type of problem-solving situations; senior managers are primarily concerned with the latter type of strategic decisions. Risk enters both types of decision, although in rather different ways. The balance between what is termed (Chapter 3) ‘risk’ as opposed to ‘uncertainty’ is generally different in the two cases, the latter being rather more prominent in strategic decisions. The definition of objectives, however, is commonly rather precise and specific in short-term decisions. Section B.2 looks at problem-solving situations, Section B.3 at the longer-term strategic decisions.

Problem solving

Once an immediate problem has been recognized, three major kinds of action may be taken:

(a) interim

(b) adaptive

(c) corrective

The first, interim action, is generally taken before the cause of the problem has been found. It is in the nature of a stopgap operation to keep some process going.