11 Examples of Business Decisions

John Spacey, updated on December 05, 2023

A business decision is a commitment by an organization, team or employee to a plan of action. The following are the basic types of business decision.

Strategic

A strategic decision is a plan that influences the future of a business. For example, a restaurant that makes a decision to expand its seating by investing in an outdoor patio.

Tactical

A tactical decision is a timely response to business conditions. For example, a decision to cut prices in response to price competition.

Operational

Decisions that relate to your core revenue generating business processes. These are often closely measured, optimized and validated with testing. For example, a restaurant chain that decides to experiment with reorganizing its kitchen to try to decrease order turnaround time.

Process Decisions

Process decisions are repeated decisions that are handled by processes, policies, procedures and automation. For example, a bank that sets bright line rules for what types of houses they will mortgage.

Policy Decisions

A decision to change your policies, processes or procedures. For example, a bank that establishes a new process for reviewing non-standard houses that expands coverage to unique properties.

Automated Decisions

Decisions that are made automatically by artificial intelligence without human oversight. For example, an artificial intelligence that rejects some houses in a mortgage application because its models don't understand them or view them as a risk.

Management By Exception

Management by exception is the practice of automating most decisions but providing management attention to exceptional circumstances. For example, a hotel that empowers all front desk staff to move a guest who is unhappy with their room upon check-in but requires a manager's approval to refund the room.

Multidisciplinary Decisions

Decisions that require different types of professional opinion. For example, the interior design of a hotel that involves architects, interior designers, construction managers, hotel operations managers and brand managers that each look at the design from different perspectives.

Organizational Decisions

Decisions that require the approval of multiple stakeholders across an organization such that they can be intensely politic and require a process of consensus building. In practice, these decisions may be made at the top level of an organization.

Team Decisions

Decisions that are relevant to the culture of an organization or team. For example, hiring decisions can influence the dynamics of a team.

Customer Advocacy

It is common for an organization to employ customer advocates who engage with customers including responding to reviews and comments in social media. Customer advocates are then given broad access to design, quality and policy meetings where they represent the interests of the customer as opposed to the firm.

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