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A managerial decision is a decision that is required for the direction and control of an organization. The following are basic examples.FinancingObtaining capital for an organization. For example, a decision to open a line of credit or to issue a bond.InvestingPutting the capital of an organization to work. For example, an IT company that decides to invest capital by building a new data center.OperationalDecisions that relate to the core processes of an organization that generate value. This includes areas such as marketing, logistics, manufacturing, order fulfillment and billing that are required for a firm to generate revenue.TeamDecisions that relate to people and organizational culture such as a construction manager who decides to require a doctor's note from a particular worker because they often call in sick in a predictable way.
EthicalDecisions that reflect the values of a firm such as a toy company that decides to implement new material safety standards designed to ensure the health and safety of customers.StrategicThe development of plans that have a long term impact on an organization. For example, an automotive company that invests in research and development to try to improve its batteries. This could create large competitive advantages.TacticalQuickly responding to changing business conditions. For example, launching an ad campaign that highlights the reliability of your products after a competitor has a series of well publicized quality failures in their products.Policy DecisionsDecisions that are built into processes, procedures, policy and automations. For example, a bank that decides to exclude a certain type of house construction from mortgage eligibility as a matter of policy.Management by Exception Management by exception is the process of handling most decisions with standard automation or processes. Relatively rare decisions are then handled by managers. For example, an IT company that authorizes salespeople to give a discount of up to 10% without management approval. If a salesperson is working on a particularly large or attractive deal that requires a bigger discount, they require the approval of a manager who will model the overall profitability or strategic importance of the deal.OverviewThe authority to make a manage decision typically sits with one person. Complex or political decisions may require consensus building and the approval of multiple stakeholders.Next: Decision Rationale
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