What is the difference between Programmed and Non-Programmed Decisions?

Herbert Simon (1997) has made the distinction between programmed and non- programmed decisions. He expresses that “decisions are programmed to the extent that they are repetitive and routine, to the extent that a definite procedure has worked out for handling them so that they don’t have to be treated from scratch each time they occur”. In programmed decisions, habits, skills and knowledge about the problem is important. In such decisions, mathematical models and computer can help the decision makers to arrive at rational decisions. For instance, in an organisation, dealing with financial rules, human resources, etc., are routine activities, which keep occurring in an organisation. If a set of procedure is worked out to deal with the same, then the issue of pay rolls, attendance of employees, etc., can be easily decided with the help of computer and procedures in place. On the other hand, non-programmed decisions are made to deal with affairs that are “novel, unstructured and unusually consequential”. No cut-and-tried methods would be available and each question or issue has to be dealt with separately. Training in skills relevant to the job and innovative ability become relevant and important to develop capacity to take proper and relevant decisions. For instance, an organisation may face financial crisis, due to a change in the approach of government. Such issues are new challenges for an organisation and a novel thinking is needed to arrive at a decision that protects the welfare of the organisation.

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