Information System for Business Strategy: Decision Making Processes

This report critically appraises the key processes involved in management decision-making at all levels within a business organization and the way in which information and information systems support this decision-making. It begins with an introduction to Management Information Systems (MIS), exploring key processes and the differences between structured, semi-structured, and unstructured decisions. The report then delves into Decision Support Systems (DSS) and their role in data analysis and decision-making. The second part of the report evaluates the structure and function of different types of computer-based information systems, including Executive Support Systems (ESS) and Transaction Processing Systems (TPS), and their impact on managerial decision-making. The report emphasizes the importance of information systems in improving the effectiveness and efficiency of business strategies. The report also provides an understanding of the differences in the decision-making processes at various organizational levels, and how computer-based systems can assist managers in the decision-making process. This report offers a comprehensive analysis of how information systems influence business strategy and decision-making.

Information System for
Business Strategy

TABLE OF CONTENTS
1. Question: Critically appraise the key processes involved in management decision-making at
all levels within a business organization and the way in which information and information
systems support this decision-making. ...........................................................................................3
1. Introduction- MIS (Management Information Systems).........................................................3
2. Key processes of MIS..............................................................................................................3
3. The difference between structured, semi-structured and unstructured decisions....................4
4. Decision support system..........................................................................................................5
2. Question: Evaluate the structure and function of different types of computer-based information
systems that have a role in supporting managers in their decision making. ...................................7
1. Decision-making process.........................................................................................................7
5. Executive support system/executive information system (ESS).............................................8
6. Transaction processing systems (TPS)....................................................................................9
7. Conclusion.............................................................................................................................10
REFERENCES..............................................................................................................................12
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1. QUESTION: CRITICALLY APPRAISE THE KEY PROCESSES
INVOLVED IN MANAGEMENT DECISION-MAKING AT ALL LEVELS
WITHIN A BUSINESS ORGANIZATION AND THE WAY IN WHICH
INFORMATION AND INFORMATION SYSTEMS SUPPORT THIS
DECISION-MAKING.
1. Introduction- MIS (Management Information Systems)
Information can be related with facts or data that is provided to somebody from a source.
In business organisations, information systems is an organised approach for handling data related
with business processes. These operations include storing, collection, transfer or communicating
from one end to another. It is important to control and manage the flow of information between
destinations for acquiring the desired outcomes (Laudon and Laudon, 2013). Hence,
Management Information Systems are approached which aid managerial decisions in the
company to meet the business objectives.
It is a conceptual attribute and has links with information systems and the technology
which is implemented for the same. This report helps in understanding the processes that are
involved in the management decision making at different levels of the organisation. Furthermore,
the structure and function of various computer-based information systems have also been defined
in this report.
2. Key processes of MIS
MIS or Management Information Systems have following types depending on their
purpose of utilisation:
 Decision Support System
 Executive Information System
 Marketing Information System
 Office Automation System
 School Information Management System, etc.
There are certain processes which are a part of the MIS. These have been described as
follows:
 Developing system design objectives.
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 Establishing respective needs of the organisation.
 Recognising the areas which require significant decision making.
 Fulfilling these needs and demands by appropriate designing of the system.
 Conducting analysis for the concerned organisation.
 Obtaining conceptual and logical schema that has to be aligned with the process design.
 The company now has to initiate recruitment process for hiring administrators and
operators (Willcocks, 2013).
 Developing database.
 Modification of data base dictionary.
 Amending database when required.
The above stated steps or processes help in understanding the development stages of the
entire management information system which is to be implemented in a company. There are
certain benefits which come up with the MIS and these include recognition of the strengths and
weaknesses of the organisation (Galliers and Leidner, 2014). Whenever business strategies are
developed there is a stage in which evaluation of internal and external environmental factors has
to be performed. The effectiveness of concerned decision is improved through this process.
When implementing Management Information System, communication and planning of different
business functions is efficiently performed (Baskerville and Wood-Harper, 2016). Furthermore,
organisation can attain competitive advantage by reducing the production costs of goods and
services and increasing the quality of products developed.
3. The difference between structured, semi-structured and unstructured decisions
Structured Decisions Semi-Structured Decisions Unstructured Decisions
There are three components of
a structured decision. These
include data, process and
evaluation.
The components of a semi-
structured decision include
data and process. The
evaluation stage may or may
not be followed.
The components of an
unstructured decision are the
same as structured but their
characteristics vary a lot.
The process of taking a
structured decision is
The semi-structured decisions
are taken with certain
The systems in which
unstructured decisions have to
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consistent and developed in a
systematic flow (Fayard and et.
al., 2012).
guidance by the devised
system and there is certain
amount of influence with
human interpretations.
be taken are focused
completely on the people or
teams that are taking the
respective decision.
The lower management level
of the organisation takes
structured decisions.
The middle management level
is responsible for taking semi-
structured decisions (Norman
and et. al., 2012).
The higher or executive level
of management is responsible
for taking unstructured
decisions.
Rigid framework. Quite flexible network. Very flexible network.
Computer networks and
programs can be developed for
this decision making.
Computerised support system
is initialised but requires a
little bit of human
intervention.
The systems initialised for this
decision making are
considered as expert systems.
Clarity is obtained. The level of agreement over a
particular solution is quite low
as compared to the structured
one.
The overall problem is not
completely tackled (Keresman
III, Bhagavatula and Sherwin
CardinalCommerce
Corporation, 2012).
The aforementioned facts and details present the basic differences which are present in
unstructured, semi-structured and structured decisions. The performance of the company is
completely based on the ways in which these decisions have to be taken.
4. Decision support system
When an organisation starts functioning, there is large volume of data generated with
regards to the customer base and the business functions. When considering manual operations, it
becomes quite difficult to analyse and interpret these types of information with accuracy and
precision (Shibl, Lawley and Debuse, 2013). Hence, certain computerised format has to be
implemented which brings in efficiency in increasing the level of accuracy for analysis. Decision
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Support System (DSS) is one such computer based application that conducts data analysis for
taking the right type of decisions. There are different types of operations that are supported by
DSS which include ranking, sorting, developing and choosing alternatives, etc.
The use of DSS varies according to the area of application. It can be utilised for
supporting the decision making process while it can also be used for aiding the organisational
processes (Golden, 2014). Flexibility and the capability of the organisation to adapt to changes in
the current working environment is provided largely due to DSS when applied in the
organisation's functioning. Following are the types of information which are catered and
presented by the company with implementation of DSS:
 The amount of assets or inventories available to the company.
 Organisation can obtain a perception about the comparative sales figures which lies in the
present and upcoming time period.
 The forecast or assumptions related with one sales figure is easily obtained through this
application (Azad, Amin and Alauddin, 2012).
As mentioned before, the flexibility and adaptiveness of DSS is very interactive and there
is less assistance required for getting solutions with these systems. The managerial decisions
which are taken with help of this automated system includes three basic phases. These are
intelligence phase, designing phase and the choice phase (Gohel and Gondalia, 2013).
Furthermore, two types of decisions are generated in such situations which include programmed
and non-programmed decisions. The only thing that is to be followed for obtaining the best
outcome is follow up of guidelines or instructions which have been devised by the system so that
no deflections or negations are obtained.
Business management is the basic area were DSS is largely applied (Mayer, 2013). The
Executive Dashboard is one such software tool which is utilised for improving the business
performance and making decisions as quickly as possible. The concepts, principles and strategies
for gaining sustainable competitive advantage are also devised with help of this system. Hence, it
can be stated that DSS proves to be a highly efficient system when applied in an organisation for
managing the flow of information (Lerner, Alston and Kim, Groupon, Inc., 2013).
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2. QUESTION: EVALUATE THE STRUCTURE AND FUNCTION OF
DIFFERENT TYPES OF COMPUTER-BASED INFORMATION SYSTEMS
THAT HAVE A ROLE IN SUPPORTING MANAGERS IN THEIR
DECISION MAKING.
1. Decision-making process
Decisions are basically judgements which are made by an individual or an organisation
for getting on a conclusion or inference. Following are the major stages of the decision making
process:
Identification:
The most important step in the entire decision making process is recognition and
identification of a problem. If an issue has arise or there is some problem in the organisation then
the decision making team or individual has to recognise the correct source of this problem.
Without recognition of the source there is no scope of proper or effective solution and related
decision (Keresman III, Bhagavatula and Sherwin, CardinalCommerce Corporation, 2012).
Collecting information:
Once a problem has been recognised or identified, there is a requirement to gather
information related with the issue. Every possible source has to be considered and respective
data is to be collected. No point should be left without consideration.
Developing alternatives:
There may be a list of possible solutions which will be present or applicable for the
concerned situation. Effective problem solving and decision making is possible only when there
are alternatives generated (Norman and et. al., 2012). Hence, there is a need for developing
alternatives so that a back up solution is always present if the implemented solution fails.
Correlating with principles:
The reliability and performance of the strategic solution proposed by the organisation has
to be evaluated after alternatives have been generated. These have to be correlated with
principles and theories so that appropriate implementation can be possible.
Evaluation and analysis:
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Decisions and strategies which are developed as the solutions to concerned problem need
to be evaluated and analysed. The drawbacks and weaknesses of the organisation with the
possible impact has to be assessed in this stage (Willcocks, 2013).
Executing the decisions:
The decisions are now executed or implemented by the company for solving the problem.
Once the implementation has been performed, it becomes easier for the organisation to shift the
focus over other problems and issues.
Evaluating the results:
The quality of a decision that is taken by the organisation is assessed according to the
impact or effect it has over the audience or the relevant stakeholders. The result that is obtained
helps in creating changes or improvements in the future decisions (Laudon and Laudon, 2013).
The management information systems can be applied for bringing an effectiveness in the
decisions that are taken by the organisation with help of computerised systems and related
information technology components.
5. Executive support system/executive information system (ESS)
The kind of management information system which helps in administering the senior
executive information and the needs of decision making is considered as executive support
system. The senior level management has to be handy with information related with internal and
external environment of the company for taking effective decisions. This type of data is easily
catered through ESS (Galliers and Leidner, 2014). The system is also known as a specialised
form of DSS. The ESS has few basic components like the hardware, software, interface and
telecommunications network. The Executive Information System can be applied in different
operational fields these include:
 Manufacturing
 Marketing
 Financial
This implies that the level of application for this system is quite wide and there is still
scope of greater developments with technological advancements. The core competencies of
organisation are improved with help of Executive Information System in the form of acquiring
sales forecasting, developing efficient pricing of goods, performing cash flow analysis and
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bringing in effectiveness in the decisions related with financial investments (Fayard and et. al.,
2012). Following are the advantages and disadvantages of the ESS:
 Information is more accurately tracked and the delivery of information for the
organisation is improved.
 One of the efficient tools for analysis and application of decisions.
 Dependency of the company over system is increased.
 The implementation costs of EIS is quite high.
 Quantification of benefits is very difficult.
 The efficiency of decision making capabilities is increased because better perceptions are
acquired.
6. Transaction processing systems (TPS)
Transactions are considered as the smallest operations which take place in the
organisation. These are indivisible and require keen intervention by the management. TPS or
transaction processing system is one systematic approach towards transaction processing with
help of hardware and software (Baskerville and Wood-Harper, 2016). There are different
transaction processing systems which are mentioned as follows:
 IBM Transaction Processing Facility
 IBM Information Management System
 IBM Customer Information Control System, etc.
Often the transaction processing system and transaction processing are considered as
similar with batch processing. But they are not similar. The basic batch processing system is
based on the completion of one particular slot or batch of the goods and services for
manufacturing (Golden, 2014). It can also be computerised with execution of a line of programs
which are considered as jobs which are not interfered with help of any sort of human activity or
intervention. Although this process is efficient, there is a time delay experienced in this system.
Following are the features of Transaction Processing System: Performance: The number of transactions that take place in a particular time period helps
in determining the performance of the implemented system.
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 Continuous availability: Whenever accessed the system should be available considering
the respective time period or slot. This helps in preventing breakdown or over lapping of
the operations (Azad, Amin and Alauddin, 2012). Data integrity: The computer based systems are completely dependent on the hardware
and software that are applied for processing inputs and determining the actual outcomes.
Data integrity is a factor which helps in understanding the capabilities of system for
handling the issues that occur in hardware and software.
 Ease of use: Just like Decision support system has the feature of easy access and
usability, the transaction processing system has also provisions for casual users. The
entire functioning is very easy for understanding and there is less probability for the
occurrence of errors and mistakes in the system (Gohel and Gondalia, 2013). Hence, the
application of this system is increasing day by day in the business operations.
This system i.e. the Transaction Processing System is completely based on the time
required for completion of one operation so that next can be executed. The prominent advantage
which is obtained when the system failure or breakdown of operations takes place. The
automatic recovery of currently functioning database takes place which helps in retrieving data
even after breakdown (Mayer, 2013). Furthermore, apart from batch processing, the transaction
processing is also considered as real time function. The simultaneous or on the spot processing of
acquired information comprises of the real-time processing. Greater data can be transmitted over
a larger bandwidth with help of this system.
The business organisations that implement TPS can have following advantages or
benefits:
 Stability of the data that is acquired and preserved in the system. In case of network
failure or maintenance work of the database, there is less threat or insecurity to the data
procured.
 Data hiding is another aspect which is acquired in the implementation of the system.
7. Conclusion
This report provides the basic information about the different types of decisions which
are applicable at various organisational levels which include structured, semi-structured and
unstructured decisions. The use of management information systems in the business processes
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helps in bringing more effectiveness and also improves the efficiency or productivity levels. As a
result, the accomplishment of goals and objectives is faster. Furthermore, the detailed description
of the decision making process has been provided in this assessment which helps in getting a
structured flow to the different types of decisions which can be implemented when considering
problems and issues. Lastly, the decision support system, executive information system and
transaction processing system are some of the management information systems have been
described in this report.
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REFERENCES
Books and Journals
Azad, M. M., Amin, M. B. and Alauddin, M., 2012. Executive information system. International
Journal of Computer Science and Network Security (IJCSNS). 12(5). p.106.
Baskerville, R. L. and Wood-Harper, A. T., 2016. A critical perspective on action research as a
method for information systems research. In Enacting Research Methods in Information
Systems: Volume 2 (pp. 169-190). Springer International Publishing.
Fayard, D. and et. al., 2012. Effect of internal cost management, information systems integration,
and absorptive capacity on inter-organizational cost management in supply
chains. Accounting, Organizations and Society. 37(3). pp.168-187.
Galliers, R. D. and Leidner, D. E., 2014. Strategic information management: challenges and
strategies in managing information systems. Routledge.
Gohel, H. and Gondalia, V., 2013. Executive Information Advancement of Knowledge Based
Decision Support System for Organization of United Kingdom. International journal of
advanced and innovative research, pp.41-50.
Golden, A. K., 2014. Decision Support System. Mayo Clinic, Rochester, Minn.
Keresman III, M. A., Bhagavatula, R. and Sherwin, F.M., CardinalCommerce Corporation,
2012. Secure and efficient payment processing system with account holder defined
transaction limitations. U.S. Patent 8,170,954.
Laudon, K. C. and Laudon, J. P., 2013. Management Information Systems 13e.
Lerner, Y., Shah, M., Alston, G. and Kim, B., Groupon, Inc., 2013. Transaction processing
system. U.S. Patent Application 13/752,088.
Mayer, J. H., 2013. Current changes in executive work and how to handle them by redesigning
executive information systems. In Accounting information systems for decision
making (pp. 151-173). Springer Berlin Heidelberg.
Norman, R. and et. al., 2012. Method and system for facilitating network transaction processing.
U.S. Patent 8,121,944.
Shibl, R., Lawley, M. and Debuse, J., 2013. Factors influencing decision support system
acceptance. Decision Support Systems.54(2). pp.953-961.
Willcocks, L., 2013. Information management: the evaluation of information systems
investments. Springer.
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