What is difference between Programmed and Non-programmed decisions making Information System?
Programmed decisions are of repetitive and routine nature whereas both of these features are absent in case of non-programmed decisions. In fact, a non-programmed decision relates to a new situation altogether every time. For example, the settlement of a bill is a programmed decision, as it can be made in accordance with the set procedure but a decision to manufacture a new product cannot be programmed as it is neither a repetitive nor a routine one and is thus a non-programmed one.
Programmed decision can be delegated but non-programmed one cannot. For example the routine purchase of standard material for manufacturing operations is a programmed decision as it can be delegated to a clerk. But a decision concerning the purchase of a special and scarce material under fluctuating price conditions cannot be delegated and thus, it is characterized as non-programmed decision.
Programmed decisions are made with the help of pdecided rules, regulations and procedures laid down by the management for the purpose- whereas non-programmed decisions are mainly based on management direction, thinking and deliberations. Besides these factors judgment, experience, expertise and intuition of the manager also play a vital role in taking. such decisions.
The cost of taking non-programmed decision is quite high which is contrary to that involved in taking programmed decisions.
To solve a problem under programmed approach may use a string of pdecided rules, regulations and instructions to arrive at its solution. In this way, programmed decision-making helps in the achievement of management information systems objective to program more and more decisions. On the other hand, under non-programmed approach of decision making, due to the absence of decision rules, the executives have to fall back upon the general problem. solving methodology, which is known as a system’s approach to problem solving.
Programmed decision can be made with the help of a computer system also but the services of computer cannot be utilized directly in making non-programmed decisions. However, in this computer may be used to process huge volumes of necessary data.
The other classification of decisions:
Strategic Planning: In this area, the decision maker develops the objectives of the organization and allocates the resources to achieve these objectives. Policies that are to govern the acquisition, use and disposition of the resources are developed in this phase. Decisions of this type are made over a long period of time and involve substantial investment. For example, diversification in a new area, introduction of a new product is strategic decisions.
Management Control: These decisions deal with the process by which managers assure that resources are obtained and used effectively and efficiently to accomplish the organization’s objectives. Formulation of budgets, variance analysis, working capital planning is examples of this type.
Operational Control: These decisions deal with the short-term day-to-day operations of the organization. Here the objective is to ensure that specific jobs are carried out efficiently. Some examples ainventory control, measuring, appraising and improving workers efficiency, daily production plans.
The important contribution of these classifications of decisions is that the information requirements for each type varies considerably and hence appropriate information for systems each category must be designed looking at the characteristics of information requirements.