Tactical Decision-Making

Tactical decisions are those made on a lower level than the previously discussed strategic decisions. They are usually made by midlevel management, such as divisional or departmental managers. These decisions concern the development of tactics to accomplish the strategic goals defined by top management. Although top management's strategic decisions are nonspecific because they are applied to all departments within the organization, administrative decisions express corporate goals in a specific departmental manner. Administrative decisions are therefore more specific and concrete than strategic decisions and more action oriented. The decision to produce a specific kind of cereal, in this case a fruit-and-fiber breakfast cereal, is an example of this kind of tactical decision.

Operational Decision-Making

Operational decisions are made on the lowest or supervisory level within the company and concern the course of daily operations. These decisions determine the manner in which operations are conducted operations designed to accomplish the tactical decisions made by mid-management. These decisions concern the most effective and efficient way to accomplish the goals stated on the administrative level. Setting a production schedule and determining the appropriate level of raw materials inventory are examples of operational decisions. In our continuing example of the breakfast cereal, an operational decision would be to produce each week 10,000 boxes holding 12 ounces.

Figure 5-1 is a graphic representation of the levels of decision-making shown for each part of the organization.

Strategic

Tactical

Operational

Figure 5-1. Levels of decision-making in an organization.

YOU SHOULD REMEMBER

Different organizational levels will make different kinds of decisions. Top management will be responsible for determining the strategic goals of a company while midlevel managers will make tactical or administrative decisions. The lowest organizational level of management, the supervisor, will make operational decisions. In every instance of managerial decision-making, success will depend upon the manager's analytic abilities.

Styles of Decision-Making

Just as there are different kinds of decisions, there are different kinds of decision-making styles. The corporate culture that was discussed in the last chapter will influence the acceptable

decision-making style in the company.

One style may be more acceptable than others, and decision-makers who show the desired style will be rewarded and promoted to even higher business positions. The task of the new manager is to determine the most effective decision-making style. This can be done by observing the styles of established executives in the specific company. A manager whose style of decision-making is different from that of the company will often encounter great difficulty in having his or her managerial decisions accepted.