A non-routine decision refers to a decision that is unusual, complex, and typically requires a significant degree of judgement. These decisions often arise in situations that are new or unexpected, where there are no established procedures or policies to guide the decision-making process.
Non-routine decisions are typically made by upper-level management because they require a deep understanding of the organization’s strategy, a broad perspective of its operations, and significant decision-making experience. They often involve strategic planning, setting organizational policies, and addressing unexpected challenges or opportunities.
These types of decisions are characterized by their high levels of uncertainty and risk, as well as the significant impact they can have on the organization. The information required to make these decisions is often incomplete or ambiguous, and the outcomes are uncertain.
Examples of non-routine decisions include deciding to enter a new market, launching a new product line, responding to a major competitive threat, deciding to acquire another company, or making major changes to the organizational structure.
Example of a Non-Routine Decision
Let’s take the example of a tech company named “Innovative Tech Inc.” which specializes in making fitness wearables. The company has been very successful in its home country and is considering entering a new international market. This is a non-routine decision, as it is unusual, complex, and requires significant judgement.
Here are the factors they would need to consider:
- Market Research: They need to conduct comprehensive research to understand the new market dynamics, potential competition, consumer behavior, and legal regulations.
- Financial Analysis: They need to determine the costs associated with the expansion, including setting up operations, marketing expenses, and potential tariffs or taxes. They also need to project the potential revenue and profit from the new market.
- Risk Assessment: The company needs to evaluate potential risks, such as political instability, currency exchange rates, intellectual property protection, and the possibility of low consumer acceptance.
- Strategic Fit: They need to consider whether this expansion aligns with the company’s overall strategic goals and capabilities.
After considering these factors, the senior management of Innovative Tech Inc. will make a decision about whether or not to proceed with the international expansion. This decision could have significant implications for the company’s future direction and performance, illustrating the high stakes often associated with non-routine decisions.