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ACCA Applied Knowledge · Business and Technology · Leadership, management and supervision

Simon's classification of decisions distinguishes programmed from non-programmed decisions. Which situation is the best example of a non-programmed decision?

The board deciding whether to acquire a competitor with unfamiliar technology is a non-programmed decision, because it is new, unstructured and requires judgement with no standard procedure. Reordering at a fixed level, formula-based overtime and routine claim approval all follow rules, so they are programmed.

  1. AThe board deciding whether to acquire a competitor with an unfamiliar technologyCorrect
  2. BA clerk reordering stationery when stock falls to a set reorder level
  3. CA payroll system calculating overtime using a fixed formula
  4. DA supervisor following a standard procedure to approve routine expense claims

Explanation

Non-programmed decisions are novel, unstructured and need judgement because no set procedure exists. An acquisition of a competitor with unfamiliar technology fits this. The other options follow rules, formulas or set procedures, so they are programmed decisions.

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