PROBLEM SOLVING AND DECISION MAKING
Problem solving is a process in which we perceive and resolve a gap between a present situation and desired goal, with the path to the goal blocked by known or unknown obstacles. In contrast, decision making is a selection process where one, two or more possible situations are chosen to reach a desired goal decision.
But, the steps in both problems solving and decision making are quite similar and the first involves often the second. In fact, the terms are sometimes used interchangeably.
Different types of decisions
People at different levels in a company have different types of decision-making responsibilities.
Strategic decisions, also known as nonprogrammed decisions (because neither the appropriate solution nor the potential outcome is known) which affect the long-term direction of the entire company, are typically made by top managers. Examples of strategic decisions might be to focus efforts on a new product, to merger with another company or to increase production output... These types of decisions are often complex and the outcomes uncertain, because available information is often limited. Managers at this level must often depend on past experiences and their instincts when making strategic decisions.
Tactical decisions, which focus on more intermediate-term issues, are typically made by middle managers. The purpose of decisions made at this level is to help move the company closer to reaching the strategic goal. Examples of tactical decisions might be to pick an advertising agency to promote a new product...
Operational decisions focus on day-to-day activities within the company and are typically made by lower-level managers. Decisions made at this level help to ensure that daily activities proceed smoothly and therefore help to move the company toward reaching the strategic goal. Many of these decisions are relatively simple and routine, such as ordering production supplies, choosing the discount rate for an