Managers know how important decision-making is from the organisational point of view. Top management typically develops the strategic plans. An MIS gathers data from multiple online systems, analyzes the information, and reports data to aid in management decision-making. Alternatively there may be prohibitive constraints. 1.Principles and elements of MIS 2.The relationship between organizational structure and MIS 3.Information requirements for MIS 4.Different types of MIS 5.The process of developing a MIS 6.Criteria for MIS 7.Strategies for determining MIS design INSTRUCTIONAL MATERIALS REQUIRED READING Reading note: Management information systems BACKGROUND READING By the term relative uniqueness he means the degree to which a problem or decision (1) has been seen before; (2) occurs frequently and at regular intervals; and (3) has been solved or resolved in a satisfactory manner. "Make or buy" decisions. The inference is that rather than optimizing in the strict sense of proceeding to a maximum they consider all the constraints bearing on the decision situation and choose a course of action that is satisfactory to them (i.e., good enough under the present circumstances). Decisions are made to sustain the activities of all business activities and organizational functioning. This crucial stage has the following three distinct but closely interrelated phases: In case where a large number of alternatives have been generated, it is quite likely that many of them will not appear to be feasible. These stages, or sometimes called phases, are important for the decision making process to begin Orientation stage - This phase is where members meet for the first time and start to get to know each other. Considering all possible solutions. How can information technology contribute to unstructured decisions? Fig. All successful organisations have made various effective decisions under uncertainty. However, a particular product, say Cinthol, may demand an expensive advertising campaign to counter a competitors aggressive marketing strategy. These conditions are represented in Fig. This explains why most management training programmes are directed towards improving a managers ability to make non-programmed decisions by teaching them how to take such decisions. In general, the more important the decision, the more attention is directed to developing alternatives. vii) Management information system helps an organization to achieve a competitive advantage. Identification of Resources and Constraints: Just as a business manager does not operate in isolation, problem solving does not occur in vacuum. Managers use various types of resources and we often speak of five Ms in this context, viz., materials, money, manpower, machinery and management. Decision Matrix 6. Decision making process is continuous and indispensable component of managing any organization or business activities. Decision-Making at Different Levels in the Organisation 8. MIS is a scientific way of collecting; processing, storing and communicating information relating to the various activities of . Fig. 1. Such decisions are related to the co-ordination and support of the core activities of the organisation. Thirdly, the larger the number of people concerned with a problem, the greater the number of likely alternatives to be sought. Either the resources necessary to implement the alternatives are not available. Level One: The Leader Alone Decides. 950,000. Copyright 10. Such a strategy includes a formal plan which outlines how the data will be used. In decision-making, MIS cannot take the place of managerial decisions. 1. 8.3. 2. When deciding whether or not to add a new wing to the administration building, or where to build a new plant, we will have to consider our choice carefully and extensively. Programmed decisions are those that are made in accordance with some habit, rule or procedure. However, there are certain weaknesses of the group decision-making process. According to Davenport (2013), the decision-making process and its impact on top level management in a business organization is explained with an emphasis on automated decision-making. This is more so in those situations involving complex problems where no one member is a specialist in the problem area. Decision making is a fundamental function of the management. Content Guidelines 2. Content Filtration 6. In fact, managers often identify one or two alternatives very fairly and choose from among them. Likewise, the production department has to decide whether to manufacture all of the electrical components or to subcontract to other firms. 3. An important concept developed by Simon is satisfying, which suggests that, rather than conducting an exhaustive search for the best possible alternative, decision makers tend to search only until they identify an alternative that meets some minimum standard of sufficiency. People tend to satisfice for a variety of reasons. According to this model, decision-making is characterized by Limited information processing - A person can manage only a limited amount of information. Planning involves the most significant and far-reaching decisions a manager can make. As Stoner puts it: It does not take a wise manager to reach a decision when there are no other possible choices. A useful tool for making business decisions is a management information system. Thirdly, group decision-making is characterised by indecisiveness and buck passing blaming one another for a poorly made decision or the lack of decision. With changes in society and in its economic framework, an organisation must adapt itself to such changes. Problems act as barriers to the achievement of organisation goals. In short, technical decisions are concerned with the process through which inputs such as people, information or products are converted into outputs by the organisation. He only recognizes the very important fact that more often than not, decisions are balanced with the cost (measured in terms of time and money) of making it. Knowledge Management Systems A knowledge management system stores and extracts information to help users enhance their knowledge and optimize collaboration efforts to complete tasks. Finally, a major strength of group decision-making is the relative ease of implementing decisions that have been made. A decision support system (DSS) is an information system that aids a business in decision-making activities that require judgment, determination, and a sequence of actions. The decision maker has to perceive and understand problems. In fact, problem solving lies embedded in the fabric of the organisations and its external environment. (iii) Choosing the Most Appropriate Alternative: After evaluating the alternatives properly it is necessary to choose the alternative which is acceptable to those who must implement it and those who have to bear the consequences of the decision. 8 Management Information System Used by managerial or mid-level managers Subset of the overall internal controls Moreover, since there are always additional alternatives waiting to be discovered, the process of generating alternatives could conceivably go on forever. Leader decides and communicates decision to the group (Leader does require group member input) 3. The manager, in fact, examines four to five alternative possibilities and chooses the best possible option from among them, rather than investing the time necessary to examine thoroughly all possible alternatives. Decision-Making Conditions 6. With Objective A, the firm has little way to evaluate the effectiveness of various decisions as they relate to their goal. Most often than not decision makers filter the information they receive, i.e., they pay more attention to some information than to other information. The generation of various possible alternatives is essential to the process of decision-making. In most real-life situations managers adopt a shortcut approach and thus fail to arrive at the best solution. How much time and money should be developing alternatives: Time and money are the important resources at the disposal of the decision-maker. viii) It helps in effective decision making, thereby reducing the time for actionable items. Decision making can be performed by individuals or groups and includes employees as well as operational, middle . Pricing decisions. Thirdly, how provisions for evaluation and modification of the chosen solution during the implementation process be made? It is the automation of the simple, repetitive processing used to support business operations. Secondly, performance data must be readily available so that the comparison to standards may be made. However, its intricate interplay with other history factors in PDM challenges a principled account of the history effects of feedback. More often than not it is simply assessed that the nature of a managerial problem is obvious to all concerned. This can lead to considerable dissatisfaction or frustration. vi) Customer data report helps in planning better and effective marketing strategies and promotional activities. Types of Decisions 7. How good their decisions are will largely determine how effective their plan will be.. Prohibited Content 3. When the cost of failure is high, the leader must . MIS, DSS, EIS. For example, the production manager of a machinery manufacturing firm like the Texmaco might primarily be engaged in technical decisions, while the legal adviser of the company might be involved in institutional matters. Privacy Policy 9. 8.5 implies. It is a process of using inputs effectively in the solution of selected problems and the creation of outputs that have utility. Consider, for example, the following two ways in which a firm might state one of its objectives: To increase our market share by at least 3.5% in the next fiscal year. This is when the leader is in the best position because of clarity of knowledge to make the decision. However, the fact remains that todays complex world in which most organisations operate makes it increasingly difficult for a single manager to make complex decisions independently. Similarly, when inventory of raw materials occurs. It is a goal-oriented process and provides solutions . Lower level managers are used in the preliminary stages of the decision process. According to Simon, programmed decisions are those which involve simple, common, frequently occurring problems that have well-established and understood solutions. For example, the final criterion used to select a plant site might be its proximity to the managers home town. Similarly, the financial manager has to decide whether to invest in a new plant or to lease. A management information system (MIS) is a computer system consisting of hardware and software that serves as the backbone of an organization's operations. Writers on organisations have suggested that creativity is needed at this stage in developing various possible alternatives for consideration. 7. Intuition, judgement and experience always play a very important role in decision-making under uncertain conditions. the "gate-keeping" role of MIS in decision making and overall well-being of the organization. Managers in the not-for-profit and public enterprises are faced with a similarly wide range of decisions. 5. Group-think a phenomenon in which the time for group cohesiveness and consequence becomes stronger than the desire for the best possible decision may occur. Some decisions may be made hurriedly and thus prove to be ineffective. MIS - Management Information System DSS - Decision support system ESS - executive support system Stages of Decision making Making decisions consists of several different activities that take place at different times. When making a decision managers have a purpose. For all these reasons, the satisfying process plays a major role in decision-making. Levels Decision making Organization levels that comprise of strategic, management, knowledge, and operational levels of the organization classify decision-making. Fig.8.4 gives an indication of the relative number of each type of decision made at each level in the organisations. The decision-making is a fundamental prerequisite of each of the foregoing process, the job of MIS is facilitating decisions necessary for planning, organizing and controlling the work and. This chapter focuses on the specialized systems that firms use to achieve better decision making: management information systems (MIS), decision-support systems (DSS), group decision-support systems (GDSS), and executive support systems (ESS). Management Information System (MIS) is a professional and academic discipline concerned with the strategic, managerial and operational activities involved in the gathering, processing, storing , distributing and use of information and its associated . ii. In such a situation a programmed decision that is a decision to advertise the product in accordance with budget guidelines may prove to be wrong. This complexity arises from the complexity and dynamism of todays organisations and their environments. The risks of each alternative must be considered. It may even mean selecting the best method for going out of business or terminating a contract. Level 2: I decide with your input. All the previous steps have been of a preparatory nature and it is in this step that the manager finally decides what to do. The chief approach to formulating the data collection process is the design of management information systems. https://shadowing.ai That is, decisions are made within the context of, and influenced by, the objective or set of objectives defined by the decision maker. level. Non-programmed decisions, as Stoner has put it, are those that are out of the ordinary or unique. Such a response refers to the reaction of the organisation and its individual members to an alternative that has been chosen. Such decisions obviously involve long-term planning and policy formulation. This often creates additional problems (which are often of a complex nature) because of shared power, bargaining activities and need for compromise present in most group decisions. In other words, managers hardly enjoy any discretion in matters involving programmed decisions set managers, decide what to do. Managers should also recognise that even when all alternatives have been evaluated as precisely as possible and consequences of each alternative weighed, it is likely that unanticipated consequences will also arise. A 0.001% increase in market share satisfies the objective, as does a 1% increase, or 10% increase. 4. Managers in every organisation are faced with these three types of decisions, viz., technical, managerial and institutional. Such decisions can be placed into three broad categories: technical decisions, managerial decisions and institutional decisions. 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