Mclaughlin And Ferris Is An Accounting Firm That Has A Stiff, Bureaucratic Structure. The Company Has A Promotion Scheme Where People Who Have Finished A Certain Number Of Years In Service Get A Pay Hike And A Promotion. For The Human Resources Manager At Mclaughlin And Ferris, This Decision Highlights Which Of The Following Types Of Decisions?

Mclaughlin And Ferris Is An Accounting Firm That Has A Stiff, Bureaucratic Structure. The Company Has A Promotion Scheme Where People Who Have Finished A Certain Number Of Years In Service Get A Pay Hike And A Promotion. For The Human Resources Manager At Mclaughlin And Ferris, This Decision Highlights Which Of The Following Types Of Decisions? A. Satisficing B. Nonsatisficing C. Programmed
Answer of MCQ | What Is Programmed Decisions (PD) In Management?

The correct option of this multiple choice question (mcq) is C, as in Programmed Decisions, there are clear and simple rules, policies, procedures and calculations to be followed for getting desired results.

Characteristics of PD

(a) These are related with daily repetitive routine tasks.

(b) There is enough information to make decisions.

(c) These are made by middle and front-line managers in daily routine tasks.

(d) These are set by top-management for conducting business operations.

(e) The decisions to take is simple or complex but the procedure to implement the decisions is very clear or estimated with high accuracy. For example, the decision to give salary to employees on pay scales basis is a programmed decision which is simple to take as there a pay scales system but it may be not be hundred percent accurate. Ordering raw material for manufacturing a product may be complex and critical decision due to unavoidable circumstances such as accidental events, illness of workers, etc., but the procedure to order raw material based on past experiences, i.e., how much quantity of raw material is required to make a product is specified and simple.

Advantages of Programmed Decisions

(i) Increase In Efficiency

As the procedure and rules & regulation are already made, so it becomes very easier for manager to take decision which helps in getting the desired results in lesser time. For example, in an accounting firm, if there is a computerized system to do the accounting work, then, it is easy for accounts manager to take accounting decisions such as, the profitability ratio tells him that the business is performing well, so he can easily make decision to continue the present investment strategy.

(ii) Increase In Productivity

Routine tasks are systematically organized and operated which results in increase in production. For example, in manufacturing business, raw material is converted into finished products quickly as defined procedure & process help workers to performed work quickly and the operational manager does not need to decide to what process to follow.

(iii) Reduce Costs

It also reduces costs as there is no need to adopt new system to train employees, research and analyze the new system & process to be used in daily routine works. New system can cost to the business, so there is reduction in cost of production.

(iv) Consistency

These are consistent for a long period of time as same repetitive problems are solve on day-to-activities again and again which speed up the business operations to achieve the desired results.

Disadvantages of Programmed Decisions

(i) Lack of Innovation & Creativity

These decisions are not updated according to market demands. Same processes are followed over a long period of time which, now, may be become outdated and not according to recent changes. For example, for operating activities, the decision to adopt and utilize new processes is required if routine tasks are performed much better with new process i.e., new advanced technology system such as automation, AI (Artificial Intelligence), cloud computing, etc., make it much easier to perform daily tasks which outdated technological system can’t do so.

(ii) Rigidity

It lacks flexibility. There are strict policies and processes to be followed but there is no involvement of personal valuable and useful observations and opinions to listen and implement the decisions.

The option A and B of this mcq are incorrect choices here.

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