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FUNDAMENTALS OF MANAGEMENT

LECTURE NOTES ON FUNDAMENTALS OF MANAGEMENT

ANURAAG AGARWAL
8/9/2016

The subject is comprehensive in nature and promulgated in the curriculum of Bachelors of Business Administration
to equip the students with learning of management concepts and functions along with building organization to face
the challenges of ever changing economy and get exposed to variables of external environment and its impact on
organization and management.
 UNIT 2
Fundamentals of planning – Objectives, Strategies, Policies, Decision Making.

PLANNING
Definition:
It is the basic function of management. Planning is the process of bridging the gap between where we are and where we
want to be in the future. In other words, planning is “looking ahead, relating today’s events with tomorrow’s
possibilities.”
According to KOONTZ, “Planning is deciding in advance – what to do, when to do & how to do. It bridges the gap from
where we are & where we want to be”.
A plan is a future course of actions. It is an exercise in problem solving & decision making. Planning is determination of
courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways & means for
accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human & non-human
resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks,
wastages etc.
Planning is a process of seeking answer to some of the following particular questions:
 What is to be done?
 Why it is to be done?
 How the work will be done?
 Who will do the work?
 When the work will be done?
 Where the work will be done?
Planning pervades at all the levels of organization. But the scope of planning is not the same at each level of
organization. Higher the level of organization, broaden the scope of planning. Planning may be long term and short
term.

CHARACTERISTICS OF PLANNING:
1. Planning is goal-oriented
 Planning is made to achieve desired objective of business.
 The goals established should general acceptance otherwise individual efforts & energies will go misguided and
misdirected.
 Planning identifies the action that would lead to desired goals quickly & economically.
 It provides sense of direction to various activities. E.g. Maruti Udhyog is trying to capture once again Indian Car
Market by launching diesel models.
2. Planning is looking ahead
 Planning is done for future.
 It requires peeping in future, analyzing it and predicting it.
 Thus planning is based on forecasting.
 A plan is a synthesis of forecast.
 It is a mental predisposition for things to happen in future.
3. Planning is an intellectual process
 Planning is a mental exercise involving creative thinking, sound judgment and imagination.
 It is not a mere guesswork but a rotational thinking.
 A manager can prepare sound plans only if he has sound judgment, foresight and imagination.
 Planning is always based on goals, facts and considered estimates.
4. Planning involves choice & decision making
 Planning essentially involves choice among various alternatives.
 Therefore, if there is only one possible course of action, there is no need planning because there is no choice.
 Thus, decision making is an integral part of planning.

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  A manager is surrounded by no. of alternatives. He has to pick the best depending upon requirements &
resources of the enterprises.
5. Planning is the primary function of management / Primacy of Planning
 Planning lays foundation for other functions of management.
 It serves as a guide for organizing, staffing, directing and controlling.
 All the functions of management are performed within the framework of plans laid out.
 Therefore planning is the basic or fundamental function of management.
6. Planning is a Continuous Process
 Planning is a never ending function due to the dynamic business environment.
 Plans are also prepared for specific period f time and at the end of that period, plans are subjected to
revaluation and review in the light of new requirements and changing conditions.
 Planning never comes into end till the enterprise exists issues, problems may keep cropping up and they have to
be tackled by planning effectively.
7. Planning is all Pervasive
 It is required at all levels of management and in all departments of enterprise.
 Of course, the scope of planning may differ from one level to another.
 The top level may be more concerned about planning the organization as a whole whereas the middle level may
be more specific in departmental plans and the lower level plans implementation of the same.
8. Planning is designed for efficiency
 Planning leads to accomplishment of objectives at the minimum possible cost.
 It avoids wastage of resources and ensures adequate and optimum utilization of resources.
 A plan is worthless or useless if it does not value the cost incurred on it.
 Therefore planning must lead to saving of time, effort and money.
 Planning leads to proper utilization of men, money, materials, methods and machines.
9. Planning is Flexible
 Planning is done for the future.
 Since future is unpredictable, planning must provide enough room to cope with the changes in customer’s
demand, competition, govt. policies etc.
 Under changed circumstances, the original plan of action must be revised and updated to make it more
practical.

STEPS INVOLVED IN PLANNING PROCESS

Planning function of management involves following steps:-
1. Establishment of objectives
 Planning requires a systematic approach.
 Planning starts with the setting of goals and objectives to be achieved.
 Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts.
 Moreover objectives focus the attention of managers on the end results to be achieved.
 As a matter of fact, objectives provide nucleus to the planning process. Therefore, objectives should be stated in
a clear, precise and unambiguous language. Otherwise the activities undertaken are bound to be ineffective.
 As far as possible, objectives should be stated in quantitative terms. For example, Number of men is working,
wages given, units produced, etc. But such an objective cannot be stated in quantitative terms like performance
of quality control manager, effectiveness of personnel manager.
 Such goals should be specified in qualitative terms.
 Hence objectives should be practical, acceptable, workable and achievable.
2. Establishment of Planning Premises
 Planning premises are the assumptions about the lively shape of events in future.
 They serve as a basis of planning.

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  Establishment of planning premises is concerned with determining where one tends to deviate from the actual
plans and causes of such deviations.
 It is to find out what obstacles are there in the way of business during the course of operations.
 Establishment of planning premises is concerned to take such steps that avoid these obstacles to a great extent.
 Planning premises may be internal or external. Internal includes capital investment policy, management labour
relations, philosophy of management, etc. Whereas external includes socio- economic, political and economical
changes.
 Internal premises are controllable whereas external are non- controllable.
3. Choice of alternative course of action
 When forecast are available and premises are established, a number of alternative course of actions have to be
considered.
 For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of
resources available and requirements of the organization.
 The merits, demerits as well as the consequences of each alternative must be examined before the choice is
being made.
 After objective and scientific evaluation, the best alternative is chosen.
 The planners should take help of various quantitative techniques to judge the stability of an alternative.
4. Formulation of derivative plans
 Derivative plans are the sub plans or secondary plans which help in the achievement of main plan.
 Secondary plans will flow from the basic plan. These are meant to support and expedite the achievement of
basic plans.
 These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. For example, if
profit maximization is the main aim of the enterprise, derivative plans will include sales maximization,
production maximization, and cost minimization.
 Derivative plans indicate time schedule and sequence of accomplishing various tasks.
5. Securing Co-operation
 After the plans have been determined, it is necessary rather advisable to take subordinates or those who have
to implement these plans into confidence.
 The purposes behind taking them into confidence are :-
 Subordinates may feel motivated since they are involved in decision making process.
 The organization may be able to get valuable suggestions and improvement in formulation as well as
implementation of plans.
 Also the employees will be more interested in the execution of these plans.
6. Follow up/Appraisal of plans
 After choosing a particular course of action, it is put into action.
 After the selected plan is implemented, it is important to appraise its effectiveness.
 This is done on the basis of feedback or information received from departments or persons concerned.
 This enables the management to correct deviations or modify the plan.
 This step establishes a link between planning and controlling function.
 The follow up must go side by side the implementation of plans so that in the light of observations made, future
plans can be made more realistic.

MERITS AND DEMERITS OF PLANNING

ADVANTAGES OF PLANNING
1. Planning facilitates management by objectives.
 Planning begins with determination of objectives.
 It highlights the purposes for which various activities are to be undertaken.
 In fact, it makes objectives more clear and specific.
 Planning helps in focusing the attention of employees on the objectives or goals of enterprise.
 Without planning an organization has no guide.

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  Planning compels manager to prepare a Blue-print of the courses of action to be followed for accomplishment of
objectives.
 Therefore, planning brings order and rationality into the organization.
2. Planning minimizes uncertainties.
 Business is full of uncertainties.
 There are risks of various types due to uncertainties.
 Planning helps in reducing uncertainties of future as it involves anticipation of future events.
 Although future cannot be predicted with cent percent accuracy but planning helps management to anticipate
future and prepare for risks by necessary provisions to meet unexpected turn of events.
 Therefore with the help of planning, uncertainties can be forecasted which helps in preparing standbys as a
result, uncertainties are minimized to a great extent.
3. Planning facilitates co-ordination.
 Planning revolves around organizational goals.
 All activities are directed towards common goals.
 There is an integrated effort throughout the enterprise in various departments and groups.
 It avoids duplication of efforts. In other words, it leads to better co-ordination.
 It helps in finding out problems of work performance and aims at rectifying the same.
4. Planning improves employee’s moral.
 Planning creates an atmosphere of order and discipline in organization.
 Employees know in advance what is expected of them and therefore conformity can be achieved easily.
 This encourages employees to show their best and also earn reward for the same.
 Planning creates a healthy attitude towards work environment which helps in boosting employees moral and
efficiency.
5. Planning helps in achieving economies.
 Effective planning secures economy since it leads to orderly allocation ofresources to various operations.
 It also facilitates optimum utilization of resources which brings economy in operations.
 It also avoids wastage of resources by selecting most appropriate use that will contribute to the objective of
enterprise. For example, raw materials can be purchased in bulk and transportation cost can be minimized. At
the same time it ensures regular supply for the production department, that is, overall efficiency.
6. Planning facilitates controlling.
 Planning facilitates existence of certain planned goals and standard of performance.
 It provides basis of controlling.
 We cannot think of an effective system of controlling without existence of well thought out plans.
 Planning provides pre-determined goals against which actual performance is compared.
 In fact, planning and controlling are the two sides of a same coin. If planning is root, controlling is the fruit.
7. Planning provides competitive edge.
 Planning provides competitive edge to the enterprise over the others which do not have effective planning. This
is because of the fact that planning may involve changing in work methods, quality, quantity designs, extension
of work, redefining of goals, etc.
 With the help of forecasting not only the enterprise secures its future but at the same time it is able to estimate
the future motives of it’s competitor which helps in facing future challenges.
 Therefore, planning leads to best utilization of possible resources, improves quality of production and thus the
competitive strength of the enterprise is improved.
8. Planning encourages innovations.
 In the process of planning, managers have the opportunities of suggesting ways and means of improving
performance.
 Planning is basically a decision making function which involves creative thinking and imagination that ultimately
leads to innovation of methods and operations for growth and prosperity of the enterprise.

DISADVANTAGE OF PLANNING
Internal Limitations

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There are several limitations of planning. Some of them are inherit in the process of planning like rigidity and other arise
due to shortcoming of the techniques of planning and in the planners themselves.
1. Rigidity
 Planning has tendency to make administration inflexible.
 Planning implies prior determination of policies, procedures and programmes and a strict adherence to them in
all circumstances.
 There is no scope for individual freedom.
 The development of employees is highly doubted because of which management might have faced lot of
difficulties in future.
 Planning therefore introduces inelasticity and discourages individual initiative and experimentation.
2. Misdirected Planning
 Planning may be used to serve individual interests rather than the interest of the enterprise.
 Attempts can be made to influence setting of objectives, formulation of plans and programmes to suit one’s own
requirement rather than that of whole organization.
 Machinery of planning can never be freed of bias. Every planner has his own likes, dislikes, preferences,
attitudes and interests which is reflected in planning.
3. Time consuming
 Planning is a time consuming process because it involves collection of information, its analysis and interpretation
thereof. This entire process takes a lot of time specially where there are a number of alternatives available.
 Therefore planning is not suitable during emergency or crisis when quick decisions are required.
4. Probability in planning
 Planning is based on forecasts which are mere estimates about future.
 These estimates may prove to be inexact due to the uncertainty of future.
 Any change in the anticipated situation may render plans ineffective.
 Plans do not always reflect real situations inspite of the sophisticated techniques of forecasting because future is
unpredictable.
 Thus, excessive reliance on plans may prove to be fatal.
5. False sense of security
 Elaborate planning may create a false sense of security to the effect that everything is taken for granted.
 Managers assume that as long as they work as per plans, it is satisfactory.
 Therefore they fail to take up timely actions and an opportunity is lost.
 Employees are more concerned about fulfillment of plan performance rather than any kind of change.
6. Expensive
 Collection, analysis and evaluation of different information, facts and alternatives involves a lot of expense in
terms of time, effort and money
 According to Koontz and O’Donell, “Expenses on planning should never exceed the estimated benefits from
planning.”

External Limitations of Planning

 Political Climate- Change of government from Congress to some other political party, etc.
 Labour Union- Strikes, lockouts, agitations.
 Technological changes- Modern techniques and equipments, computerization.
 Policies of competitors- Eg. Policies of Coca Cola and Pepsi.
 Natural Calamities- Earthquakes and floods.
 Changes in demand and prices- Change in fashion, change in tastes, change in income level, demand falls, price
falls, etc.

SIGNIFICANCE OF PLANNING

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In a complex business situation, planning helps managers meet the challenges posed by the environment, while at the
same time minimizing the risks associated with them. Planning is a prerequisite not only for achieving success but also
for surviving in a complex and competitive world.
Planning is very important in all types of organizations. It forces organizations to look ahead and decide their future
course of action so as to improve their profitability. Organizations that plan in advance are more likely to succeed than
those which fail to plan for the future.
Planning is the first step in the management process. It ensures that the employees of an organization carry out their
work in a systematic and methodical manner. It also helps coordinate and control various tasks and makes sure that
resources are used optimally.
1. Focuses Attention on Objectives
2. Offsets Uncertainty and Risk
3. Provides Sense of Direction
4. Provides Guidelines for Decision-making
5. Increases Organizational Effectiveness
6. Provides Efficiency in Operations
7. Ensures Better Coordination
8. Facilitates Control
9. Encourages Innovation and Creativity
10. Facilitates Delegation

MANAGEMENT BY OBJECTIVES
The term "Management by Objectives" was first popularized by Peter Drucker in his 1954 book 'The Practice of
Management'. Management by Objectives (MBO) is a process of agreeing upon objectives within an organization so
that management and employees agree to the objectives and understand what they need to do in the organisation in
order to achieve them. It refers to the process of setting goals for the employees so that they know what they are
supposed to do at the workplace. Management by Objectives defines roles and responsibilities for the employees and
helps them chalk out their future course of action in the organization. Management by objectives guides the employees
to deliver their level best and achieve the targets within the stipulated time frame.
The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of
the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally,
when employees themselves have been involved with the goal setting and the choosing the course of action to be
followed by them, they are more likely to fulfill their responsibilities.

FEATURES AND ADVANTAGES

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The principle behind Management by Objectives (MBO) is basically for employees to have clarity of the roles and
responsibilities expected of them. They then understand the objectives they must do and the overall achievement of the
organization. They also help with the personal goals of each employee.
Some of the important features and advantages of MBO are:
1. Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment
increases employee job satisfaction and commitment.
2. Better communication and Coordination – Frequent reviews and interactions between superiors and
subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems
faced during the period.
3. Clarity of goals
4. Subordinates have a higher commitment to objectives that they set themselves than those imposed on them by
their managers.
5. Managers can ensure that objectives of the subordinates are linked to the organisation’s objectives.

LIMITATIONS
There are several limitations to the assumptive base underlying the impact of managing by objectives, including:
1. It over-emphasizes the setting of goals over the working of a plan as a driver of outcomes.
2. It underemphasizes
When this approach is not properly set, agreed and managed by organizations, in self-centered thinking employees, it
may trigger an unethical behavior of distorting the system of results and financial figures to falsely achieve targets that
were set in a short-term, narrow, bottom-line fashion.
The use of MBO needs to be carefully aligned with the culture of the organization. While MBO is not as fashionable as it
was before the 'empowerment' fad, it still has its place in management today. The key difference is that rather than 'set'
objectives from a cascade process, objectives are discussed and agreed, based upon a more strategic picture being
available to employees. Engagement of employees in the objective setting process is seen as a strategic advantage by
many. A saying around MBO "What gets measured gets done" is perhaps the most famous saying of performance
measurement; therefore, to avoid potential problems SMART and SMARTER objectives need to be agreed upon in the
true sense rather than set.

PROCESS OF MANAGEMENT BY OBJECTIVE

1. Setting Preliminary Objectives at the top:

The goals set by the superior are preliminary, based on an analysis and judgement as to what can and should be
accomplished by the organization within a certain period. This requires taking into account the company’s
strengths and weakness in light value of available opportunities and threats. These goals must be regarded as
tentative and subject to modification while the entire chain of verifiable objectives is worked out by
subordinates.
2. Clarifying Organizational Roles:
The relationship between expected results and the responsibility for attaining them often needs to be clarified.
Analysis of an organization’s structure often reveals that the responsibility is vague and that reorganization is
needed. Ideally, each and sub-goal should be one particular person’s clear responsibility.
3. Setting Subordinate’s Objectives:
After making sure that subordinate managers have been informed or pertinent general objectives, strategies
and planning premises, the superior can then proceed to work with subordinates in setting their objectives.
Superior must be patient counselors, helping their subordinates develop consistent and supportive objectives
and being careful not to set goals that are impossible to achieve. The superior’s judgement and final approval
must be based on what is reasonably attainable, what is fully supportive of upper-level objectives, what is
consistent with the goals of other managers in other functions, and what is consistent with the longer-run
objectives of the department of the company. One of the major advantages of carefully setting up a network of
verifiable goals is tying in the need of capital, materials and human resources at the same time. By relating these

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 resources to the goals themselves, superiors can better see the most effective and economical way of allocating
them.
4. Recycling Objectives:
Setting objectives is not only a joint process but also an interactive one. Objectives can hardly be set by starting
at the top and dividing them up among subordinates. Nor should they be started from the bottom. A degree of
recycling is required. Top management may have some idea of what their subordinate’s objectives should be-
but they will almost certainly change these preconceived goals as the contributions of the subordinates come
into focus.

DECISION MAKING
Decision Making is the cognitive process of reaching a decision. It is a position or opinion or judgment reached after
consideration. Decision Making is the process of mapping the likely consequences of decisions, working out the
importance of individual factors, and choosing the best course of action to take. Decision Making is choosing between
alternative courses of action using cognitive processes - memory, thinking, evaluation, etc.
The thought process of select a logical choice from among the available options. When trying to make a good decision,
a person must weight the positives and negatives of each option, and consider all the alternatives. For effective decision
making, a person must be able to forecast the outcome of each option as well, and based on all these items, determine
which option is the best for that particular situation.
TYPES OF DECISION-MAKING
Irreversible
These are those types of decisions, which, if made once cannot be unmade. Whatever is decided would then have its
repercussions for a long time to come. It commits one irrevocably when there is no other satisfactory option to the
chosen course. A manager should never use it as an all-or-nothing instant escape from general indecision.
Reversible
This is the decisions that can be changed completely, before, during or after the agreed action begins. Such types of
decisions allow one to acknowledge a mistake early in the process rather than perpetuate it. It can be effectively used
for changing circumstances where reversal is necessary.
Experimental
These types of decisions are not final until the first results appear and prove themselves to be satisfactory. It requires
positive feedback before one can decide on a course of action. It is useful and effective when correct move is unclear but
there is a clarity regarding general direction of action.
Trial and Error
In this type of decisions, knowledge is derived out of past mistakes. A certain course of action is selected and is tried out,
if the results are positive, the action is carried further, if the results appear negative, another course is adopted and so
on and so forth a trial is made and an error is occurred. Till the night combination this continues. It allows the manager
to adopt and adjust plans continuously before the full and final commitment. It uses both, the positive and negative
feedback before selecting one particular course of action.
Made in Stages
Here the decisions are made in steps until the whole action is completed. It allows close monitoring of risks as one
accumulates the evidence of out- comes and obstacles at every stage. It permits feedback and further discussion before
the next stage of the decision is made.
Cautious
It allows time for contingencies and problems that may crop up later at the time of implementation. The decision-
makers hedge their best of efforts to adopt the right course. It helps to limit the risks that are inherent to decision-
making. Although this may also limit the final gains. It allows one to scale down those projects which look too risky in the
first instance.
Conditional
Such types of decisions can be altered if certain foreseen circumstances arise. It is an ‘either / or’ kind of decision with all
options kept open. It prepares one to react if the competition makes a new move or if the game plan changes radically.
It enables one to react quickly to the ever changing circumstances of competitive markets.

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Delayed
Such decisions are put on hold till the decision–makers feel that the time is right. A go-ahead is given only when required
elements are in place. It prevents one from making a decision at the wrong time or before all the facts is known. It may,
at times result into forgoing of opportunities in the market that needs fast action.

STEPS INVOLVED IN DECISION MAKING

Decision making is a skill that cuts across everything managers do. Managers have to decide what to produce, how to
produce, how to motivate, how to control and so on. The decision making process describe the elements of an
organization that accepts and processes information inputs and transforms them into useful conclusion, making a good
decision is a difficult exercise
It is true that theorists have disagreed on the numbers of steps involved in the decision making of steps involved in the
decision making process but they have tried forcefully to bring out the importance of a normative decision- making
model specifying the following steps of decision making as shown in fig below.

STEPS IN DECISION MAKING

1. Awareness of a problem:
The first step in the decision making process is recognizing a problem. The manager must become aware that a
problem exists and that it is important enough for managerial action. Finding the real problem and defining
them is a difficult job. Managers may have to examine cause effect relationships in the problem situation in a
systematic way. A manager is expected to monitor the decision making environment understands the cause and
tries to define the real problem carefully.
2. Diagnose and state the problem:
A successful manager must have the ability to weed out the wheat from the chaff before deciding on a specific
course of action. Once aware of problem he must state the real problem. He must try to solve the problem not
the symptoms. “The best diagnostician is not the man who makes the largest number of correct diagnoses, but
the man who can spot early and correct right away, his own mistaken diagnosis”. The manager may be required
to use judgment and experience before defining the problem in specific measurable terms.
3. Developing Alternative:
The statement of the problem in clear, measurable terms enables executives to develop alternatives
“Developing alternative solutions guarantees adequate focus and alteration on the problem. It helps managers
to fully test the soundness of every proposed before it is finally translated into action. The ability to develop
alternative is as important as making a right decision among alternatives. The development of alternative is a
creative innovative activity.
4. Evaluation of Alternative:
Decision maker tries to outline the advantage and disadvantage of each alternative. The consequences of each
alternative would also be considered. The alternative that have been advanced must be genuine that is every
one of these alternative should adequately solve the problem. The decision should lie between genuine
alternative. The primary objective of evaluation is not to find out one magic solution. The strengths and
weakness of each alternative become apparent as they are compared with the criteria and weights established
for the purposes.

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 5. Selection of the Best Alternative:
In this step the decision maker merely selects the alternative that will maximize the results in terms of existing
objectives. In a dynamic environment selection process is not as simple as it appears to be the ability to select
the best course of action from several possible alternative separates the successful managers from the less
successful ones Peter Drucker has offered the following four critical for making the right choice among available
alternatives.
 The risk: The manager has to weigh the risks of each course of action against the expected gains.
 Economy of effort: The alternative that will give the greatest output for the least inputs in terms of material
and human resources is obviously the best one to be selected.
 Timing: If the situation has great urgency the best alternative is one that dramatizes the decision and notice
on the organization that something important is happening.
 Limitation of resources: Physical, financial and Human resources impose a limitation on the choice of
selection. Of these the most important resource whose limitations have to be considered are the human
being who will carry out the decision, if adequate human resource are not currently available the decision
should be deferred.
6. Implementation and Follow up:
After making a decision the manager must implement it. He must see whether it has actually worked or not. In
other words, he must seek feedback regarding the effectiveness of the implemented solution. Feedback allows
managers to become aware of the recent problem associated with the solution. It permits managers to monitor
the effects of their acts to gauge their success. They can evaluate their own decision making abilities. The
manager should also see whether the subordinates are unwilling or unable to implement allow them to
participate in the decision making process at an early stage and provide absolute incentives for satisfactory
performance.

PROGRAMMED DECISION:
A programmed decision is one that is routine and respective, rules and policies are established well in advance to solve
recurring problems quickly. On the basis of pre-established set of alternatives, programmed decisions can be made in a
routine way. Since programmed decision are relatively easy and simple of manager to make them free managers for
more challenging and difficult problem solving. Programmed decision are usually made by lower level personnel in
organization “in which the market and technology are relatively stable and many routine highly structured problems
must be solved. Decisions are highly reutilized and the decision maker simply recognized the problem and implements
the pre-determined solution.
NON PROGRAMMED DECISIONS:
Non-programmed decision deal with unique/unusual problem. The decision maker has to make decision in a poorly
structured situation, one in which those are no preexisting, cut and dried solution. The common feature in these
decisions is that they are novel and non-recurring and there are no readymade courses of action to resort to. Because
non-programmed decision often involves broad, large range consequence for the organization, they are made by higher
level personnel only. Non-programmed decisions are quite common in such organisation as research and development
firms where situation are partly structured and decision being made are non-routine and complex.

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