Information Systems and Decision Making

This assignment delves into the crucial relationship between information systems (IS) and decision making. It examines various decision-making models, including Herbert Simon's model, and analyzes how IS influences organizational processes and outcomes. The assignment also explores topics like transaction processing systems, spatial decision support systems, cloud security, and recommender systems, highlighting their relevance in modern business environments.

INFORMATION SYSTEMS FOR
BUSINESS STRATEGY

Table of Contents
Q1. CRITICAL APPRAISAL OF KEY PROCESSES INVOLVED IN DECISION- MAKING.........................................3
1. INTRODUCTION........................................................................................................................................3
2. Differentiation between structured, semi-structured and unstructured decisions.................................3
Decision Making Process.............................................................................................................................6
. Executive Information System / Executive Support System.......................................................................9
Decision Support System...........................................................................................................................11
6.Transaction Processing System...............................................................................................................13
Conclusion.................................................................................................................................................14
REFERENCES..............................................................................................................................................16

Q1. CRITICAL APPRAISAL OF KEY PROCESSES INVOLVED IN
DECISION- MAKING
1. INTRODUCTION
The storage and information processing for an organization in form of a computer based
database is regarded as Management Information System. The operations which are performed
by each and every level of an organization are organized and programmed into the form of daily
report (Scherer and Schapke, 2011). Furthermore, the possibility of formulating special reports is
also possible. With such a system, the managers are able to obtain feedback about their own
performance. This accounts to be the main purpose served by MIS.
Through the use of Computer Based Information Systems (CBIS), top level management
is able to do monitoring of processes. This allows comparison of information related to the past,
present and future of an organization. It involves the usage of software helping towards decision
making processes. CBIS comprises of database, hardware resources, decision support system,
people and project management applications, along with additional computerized procedures for
enabling the various departments within an organization to run efficiently and effectively.
There are different types of functions that are carried out in the computer based
information system. These include collection, processing, storing, analysis and distribution of
data with a agenda or motive for accomplishing the business objectives. Information systems are
a major component of this entire environment. Business processes are easily executed when
these types of working systems are implemented and aligned with company objectives.
2. Differentiation between structured, semi-structured and unstructured
decisions
Structured decisions :-
Within this category all three main procedures of data, process and evaluation are
included. This comprises of routine based decisions that are taken on a regular basis. As
contextualized by Tipton and Nozaki, (2012), whenever the management of an organization have
to come across a problem then, they are able to get a more clear cut & effective solution with the

help of structured decisions. These decisions are very much focused about finding the key
solution towards a problem. In order to take structured decisions the Management Information
System emerges out to be an effective tool. It can be analysed that the methodology involved
within determining and finding particular solution towards a problematic situation in case of
structured decisions is very well formulated and further executed. They are generally taken by a
firm's lower management and staff on a daily regular basis. This category of decision is very well
straight forwarded.
Semi-structured decisions :-
According to the statement given by Laudon, Laudon and Brabston, (2011), this category
of decision comes under the influence of somewhere in the middle of structured & unstructured
decisions. While carrying the procedure of making decisions, this category requires the
involvement of some sort of judgements from other people. In addition to this, agreements are
also being made with respect to the final solution towards the problems within an organization.
Semi-structured decisions are generally used by the middle management level.
Unstructured Decisions :-
The decisions coming under this category account to be very occasional along with the
uniqueness in their nature. No such predefined procedure is there for solving of these problems,
which leads to a conclusion that, for every occurring problem, a new analyzation procedure has
to be followed. The higher levels of management often address situations where unstructured
decisions have to be taken(Unit 127 - Spatial Decision Support Systems, 2010). These also involve a high
level of complexity within them. So, keeping this in mind, no already tried or true methods are
available in order to handle them. Furthermore, they involve a much high risk factor within them.

Figure 1 : Different types of decisions
(Source: Unit 127 - Spatial Decision Support Systems, 2010)
Strategic Level Tactical Level Operational Level
The strategic level is the
highest level of management
in an organisation. This level
directly contributes to the
achievement of goals and
objectives of enterprise.
The middle level
management is considered as
tactical level because they
have to deploy strategies for
implementing the decisions.
Ground level management is
considered as the operational
level.
Uncertain and dynamic
decisions of the organisation
are to be taken at this higher
level of management.
The decisions regarding
structured workflow,
foundation of distribution
channels, etc. are taken at this
level.
The judgements regarding
everyday operations and daily
business activities are made at
the operational level.
Unstructured decisions are
taken at this level of
Semi- Structured decisions are Structured decisions are taken
by operational management

organisation. taken at this level. level.
Decision Making Process
From a given set of available alternative scenarios, selecting a particular set of action is
regarded as the cognitive procedure of decision making (Decision Making Process, 2017). It is
regarded as the complex procedures in the hierarchies present within management.
The process stepwise:-
Figure 2 : Decision Making process
(Source : Decision Making Process, 2017)
I. Identifying the decision's purpose : Analyzation of the overall problem is done here.
II. Gathering of Information : Many stakeholders will usually come into consideration
whenever an organization faces a problem. There is definitely a possibility of existing
factors thereby affecting the problem. So, as a result all sorts of information in

accordance with various factors & stakeholders needs to be gathered. ‘Check Sheet' tool
could be used.
III. Judging the alternatives through principles : The criteria of baseline shall be utilized for
this purpose. While formulation of the criteria, along with corporate culture, goals of
organization should be considered as well.
IV. Analyzing various available choices along with brainstorming : All the ideas have to
noted down fir brainstorming. According to __, Cause-and-effect and Pareto Chart tools
could be used prioritization of causes in accordance with the issue. This in identification
of all possible causes. On the other hand, the Pareto Chart helps in prioritizing the cause
that too with the highest impact and effective as well. After the prioritization, all the
possible solutions should be generated.
V. Evaluating the alternatives: Under this step, the experience and judgmental principles are
bein utilized and effective skills in them helps in taking powerful and complex decisions
as well.
VI. The best suited alternative is being selected in sixth step.
VII. Furthermore in the step 7, decisions finally undertaken are gradually converted into a
plan or series of planned activities.
VIII. Finally in the eighth step, the outcomes generated because of decision implementation is
further evaluatedto determine its effectiveness for long terms.
Describing the decision making procedure with help of HERBERT SIMON MODEL

Figure 3: Herbert Simon Model of decision making
(Source : MIS AND DECISION MAKING CONCEPTS HERBERT SIMON MODEL OF DECISION MAKING,
2011)
Decision-making accounts to be the process of allowing the decision-maker for arriving at
particular decisions.Its core has been described within the model proposed byHerbert Simon.
This model gradually describes the process of decision-making into following three phases.
I. Intelligence : The collection, processing and examining of raw data is carried out.
Problem which needs attention is able to be identified.
II. Design : Invention, development and analyzation of available alternatives in accordance
with decisions is done (MIS AND DECISION MAKING CONCEPTS HERBERT SIMON MODEL OF
DECISION MAKING, 2011). Their feasibilityof implementing is further tested. The outcomes
of decisions taken are evaluated further.
III. Choice : Keeping in mind the criteria for selecting, one alternative is being selected as a
final decision to be undertaken.
[PUT ESSAY QUESTION 2 HERE – YOU NEED A DESCRIPTION OF STRUCTURE AND
DIAGRAM FOR EIS, DSS, TPS – SEE LECTURES ON ILEARN]

. Executive Information System / Executive Support System
It is broadly defined as the specialized category of DSS. The different hardware,
software, data, procedures along with people are generally included within this system. The top
management level executives are able to take their decisions in an effective manner through great
support provided from this system (Krutz and Vines, 2010). Data is able to be obtained from a
wide variety of available sources through executive information system. Furthermore, it assists in
in integrating and aggregating this obtained data. After applying all these different steps, the
resulting information is demonstrated further in an understandable format.
EIS accounts to be a computer based system for serving the obtained information to
different top level executives. A very quick and easy access is provided through its help to the
timely information. It also accounts to be user friendly along with enhanced level of graphics.
As stated by Galegher, Kraut and Egido, (2014), the Executive Support System showcases
dependency upon following factors :
1. Internal factors :-
 When necessary information is needed on timely basis.
 When improvement in the communication process is required.
 When accessing the operational data is needed.
 When various status updates are made regarding different activities of business.
 When accessing information regarding the corporate database is required.
 When accuracy in information is needed.
 When identification of various historical trends has to be done.
2. External factors :-
 The enhancement and intensification of competition at a global level.
 The rapid changes occurring within the environment of business.

 Increased level of pro-activeness needed.
 When accessing of external database is needed.
 The increased pressure of rules & regulations by government.
Characteristics of EIS :-
 Informational Characteristics:-
1. Quick responsiveness in providing timely information.
2. Accurate, relevant and validated information is produced.
3. Provides the flexibility of using (Ricci, Rokach and Shapira, 2011).
 User Interface/Orientation Characteristics:-
1. Helping oneself in a sophisticated manner.
2. Graphics user is contained thereby offering a user friendly interface.
3. Utilization could be carried out from different locations .
4. The access procedure towards information is securely reliable and confidential as
well.
5. Customization is very high level.
6. The individual executives are the best suited management style for it.
 Managerial Characteristics:-
1. The overall mission, vision along with strategy are given support.
2. The support which is required for strategic management is given.
3. Situations having high degrees of risk are dealt with its help.
4. The value added procedures of business are linked to it.
5. It also provides necessary support for accessing external data.
6. Highly oriented toward getting outcomes.

EIS Dashboard: The Executive Information System has been developed for analysing and
supervising the performance, trends, risks and opportunities that are addressed by a business user
and the decision makers.
Decision Support System
With the aid of interactive software based systems, the managers of organizations are able to
carry their decision making procedures. These interactive systems are broadly known as
Decision Support Systems (Melville, 2010). The summaries, exception pattern, trend via models
of analyzation are overall as a whole utilized by DSS. It is not intended to give a particular

decision but rather supports decision-making. From the raw data, document, personal-
knowledge along with business models are being utilized by decision maker for identification
and solution with respect to a particular problem and taking of necessary decision.
Programmed and non-programmed decisions:-
General routine work along with automated procedures are included within programmed
decisions:
 Such decisions have already been taken numerous times.
 These have to stick to a certain set of guideline along with some rules as well.
 For example: To select a reordering level for the inventories.
Unusual situations involve taking up of non- programmed decisions.
 Always a brand new decision.
 No specific regulations are being considered.
 The information that is available accounts to be the basis of this decision.
 The discretion, perceptions and instincts along with judgmental opinion possessed within
a manager form a basis for these decisions.
 For example: to invest over new technology comes under the non- programmed decision
category.
Characteristics of DSS:-
 Provides flexibility and ease of adaptation because of high level of inter-activeness.
 The users or customers are allowed to have a control over the input and outputs.
 Negligible assistance is taken from the professionals in operating it.

 Difficult issues and situations are easily tackled by managers by getting quick solutions
through this system.
Improving the Managerial Decision Making with help of DSS

 The Intelligency Phase : The production of data occurs on a timely basis. The utilization
of quantitative data is enhanced (Bulgurcu, Cavusoglu and Benbasat, 2010). Moreover
ample of data or information is made available to the managers for making decisions. The Designing Phase : The amount of alternatives available is in ample quantity and
more accurate as well.
 The Choice Phase : The making of decisions occurs at a faster pace. Moreover, the
choices made are further given a rank accordingly.
6.Transaction Processing System
The system involved within processing of the business related transactions is referred to
as Transaction Processing System(TPS). Within it, the data related to transactions is first
collected and then modified accordingly for its retrieval (Structure, Activity and Functions of
Transaction Processing System, 2015). The performance, consistency along with reliability are
included among the characteristics of TPS which is further known as real time or transaction
processing.
Processing Types:- Batch Processing : A series of programs are gradually executed without any interference
manually on a computer. Numerous transactions or batch are gathered and accordingly
processed the same time. However, a time delay is observed in case of getting an
outcome with respect to each transaction. Real time Processing : The stimulus itself or the quick conditions causing it, are
guaranteed an appropriate response from real time systems. Every transaction is of
unique nature.
 Time sharing : The computer system is being shared among multiple users. However,
there always exist a certain set of regulations upon each user's type of work allotted.

Transaction Processing System functions:-
Figure 4 : TPS
(Source : Structure, Activity and Functions of Transaction Processing System, 2015)
Input, output, storage and processing are included in some of the functions coming under
transaction processing system (Bélanger and Crossler, 2011). Input Function : Upon a source document data is first captured in first step. Within the
system, the input data is then entered. Data validation process is carried out for checking
any sort of existing errors in input data. Output Function : In this, reports are being produced for example, detail, summary or
exception reports. Storage Function : Databases and files are utilized for storing of data. The data which is
stored can be further accessed, sorted and updated as well.
 Processing Function : The stored data can be further manipulated by either computing or
making decisions (Gorla, Somers and Wong, 2010).
Conclusion
With context to the report, one thing is of uttermost significance that administration
operations have to be effectively planned in an organization. These finance based transactions
are very much confidential and have to be managed in an effective manner. Transaction

Processing Systems or TPS has to be implemented by the lower level managers for maintaining a
financial balance. Managing Information System is an aid for the middle level managers to
handle all sort of decisions related to financial transaction. Decisions must be developed in a
structured, unstructured or even semi-structured. Decision Support System has to be
efficaciously and efficiently utilized by management authorities for making effective decisions.
Higher level management authorities should use EIS as a significant tool in developing effective
decisions.

REFERENCES
BOOKS AND JOURNALS
Bélanger, F. and Crossler, R. E., 2011. Privacy in the digital age: a review of information privacy
research in information systems. MIS quarterly. 35(4). pp.1017-1042.
Bulgurcu, B., Cavusoglu, H. and Benbasat, I., 2010. Information security policy compliance: an
empirical study of rationality-based beliefs and information security awareness. MIS
quarterly. 34(3). pp.523-548.
Dubois, É., Heymans, P., and Matulevičius, R., 2010. A systematic approach to define the
domain of information system security risk management. In Intentional Perspectives on
Information Systems Engineering (pp. 289-306). Springer Berlin Heidelberg.
Galegher, J., Kraut, R. E. and Egido, C., 2014. Intellectual teamwork: Social and technological
foundations of cooperative work. Psychology Press.
Gorla, N., Somers, T. M. and Wong, B., 2010. Organizational impact of system quality,
information quality, and service quality. The Journal of Strategic Information
Systems. 19(3). pp.207-228.
Krutz, R. L. and Vines, R. D., 2010. Cloud security: A comprehensive guide to secure cloud
computing. Wiley Publishing.
Laudon, K. C., Laudon, J. P. and Brabston, M.E., 2011. Management information systems (Vol.
8). Upper Saddle River, NJ: Prentice Hall.
Melville, N.P., 2010. Information systems innovation for environmental sustainability. MIS
quarterly. 34(1). pp.1-21.
Ricci, F., Rokach, L. and Shapira, B., 2011. Introduction to recommender systems handbook (pp.
1-35). springer US.
Scherer, R. J. and Schapke, S. E., 2011. A distributed multi-model-based management
information system for simulation and decision-making on construction
projects. Advanced Engineering Informatics. 25(4). pp.582-599.

Tipton, H. F. and Nozaki, M. K., 2012. Information Security Management Handbook, Volume 6.
Auerbach Publications.
ONLINE
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Unit 127 - Spatial Decision Support Systems, 2010. [Online]. Available
through:<http://www.geo.upm.es/postgrado/CarlosLopez/materiales/cursos/
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