Information system is the integration of various technologies to meet the information of the users. Information on its own is not useful to the users, its only when applied in a meaningful way that they become relevant for any user. The blend of human factor and technology that allow the information gathering, processing, storing, using and disseminating information it so called information system. In the process of developing information system there are lot of factors that need to be take into account. One of them and not the least is decision making. Decision making is the process of selecting the right choices or compromises. But it not just about that 'unless a decision has 'degenerated to work', it is not a decision. It is a best a good intention' [Drucker, 1967]. The effective decision making is where alternatives are selected and then implemented to achieve a certain goal.
'Effective decisions result from a systematic process, with clearly define elements, that is handled in a distinct sequence of steps' [Drucker, 1967].
Get your grade
or your money back
using our Essay Writing Service!
In business content strategy is a 'goal directed action' that enable an organisation to stay ahead of the competition and achieved its business target.
The need for information on a regular basis is vital for decision making purposes, how do we make and used information? The choice of sources, provide an indication about the flow of an organisation.
The aim of this work is to provide user with solid fact that whether or not information should always be part of a strategic decision making. The work will be base on the work of three American university lecturers who have done some analytic work on the subject in their book "Information Technology Investment: Decision-Making Methodology" Schniederjans, Marc J. (Author) Hamaker, Jamie L. (Author) Schniederjans, Ashlyn M. (Author).
In the few lines below we will with references explain the importance of managers and decision making, specify the different types of information system available, emphasis on the importance of information system and finally link both information system and decision making by giving few examples were decision making played an importance part in information system.
Managers AND DECISION MAKING
Management is a series of decision making processes and is at the heart of executive activity in business [Cyert, 1956]. Managers need to think fast and straight when it comes to decision making especially in the current context where time represent and very precious assets and a least manageable commodity. After a period of research of over thirty years, Paul Hales(1986) identifies the "informational" as one of the manager roles. This comes as a support to the previous work done by Mintzberg(1973) defining the informational roles as a techniques of monitoring, filtering and disseminating information. Manager exclusive access to information and their special status and authority place them at a pivotal point of the organisation and allow them to take strategic organisational decisions.
Data are raw facts and have no meaningful to managers unless they been process to information. Drucker claims that managers still have to learn the usage of data and the interpretation of information.
ManagementÂ is, however an inherently problematic process.Â ManagersÂ must constantly improve their operations and performance, and must constantly respond and to new challenges effectively." (para. 10) (ESRC, 1993, emphasis added).
The crux of management tasks is decision making. Making a decision is never easy as there are many factors that need consideration before the decision can be taken. There is always a right course of action when a manager faces a problem. It difficult to make the right decision, manager choice is always conditional depending on their knowledge, assumptions and the willingness to make the decision successful. Let's take for take for example a manager on the verge of making a new marketing strategy. If the new strategy is adopted, it will provide the company with a higher sales return than the current strategy in place. But that new marketing strategy implies a higher risk and requires management monitoring. The decision to move forward for the new strategy will require from the manager his experience and knowledge, and also on the assumptions from the various information received regardless the new strategy. It therefore a choice base on different information and that information need to be at certain level of accuracy to determine the success of the strategy. Whether he decide to risk for a higher return will depends on how much he believed that this new strategy will be successful.
Always on Time
Marked to Standard
Managers can also make decision when a problem occurred, first they need to analyse the situation and then choose between alternative (including doing nothing). Analysing the situation help to understand the context in which manager have base their decision on. Because of the higher risk and uncertainty related to technology, climate, prices, institutions, and human relationships, manager need to have predictive information when making decision. Predictive information can be identified on various forms. What are the price expectations for the next year? Information related to yields, how much budget is available to upgrade the IT technologies. These are various predictive information that managers will required upon making decision regarding a matter.
Strategic decision making
Decisions are at the heart of any organization. Time will come when making decision can be very difficult, perplex and nerve-wracking. There various reason reasons why making decision can be difficult. Factors such as uncertainties, multiples objectives, lack of resource (information) and emotional state can influence highly decision making.
Strategic decisions are design for special purpose and are subject to great expectation from the person who is taking them. The future of the whole organisation might depend on the decision you are about to make.
Johnson and Scholes (2001) define an organizational strategy as: "The direction and scope of an organization over the long term: which achieves advantage for the organization through its configuration of resources within a changing environment to meet the needs of markets and to fulfill stakeholder's expectations".
Good decisionsÂ are made with less stress, and it is easier to explain the reasons for the decision that was made.Â Decisions should be made strategically.Â That is, one should make decisions skilfully in a way that is adapted to the end one wishes to achieve. To make strategic decisions requires that one takes a structured approach following a formal decision making process. Otherwise, it will be difficult to be sure that one has considered all the key aspects of the decision.
Making good strategic decisions is learnable and teachable through an effective, efficient, and systematic process known as the decision-making process. This structured and well-focused approach to decision-making is achieved by the modelling process, which helps in reflecting on the decisions before taking any actions. Remember that: one must not only be conscious of his/her purposeful decisions, one must also find out the causes for which they are made.Â There is no such thing as "free-will". Those who believe in their free wills are in fact ignorant to the causes that impel them to their decisions.Â There is no such thing as arbitrary in any activity of man, least of all in his decision-making. Just as he has learned to be guided by objective criteria in making his physical tools, so he is guided by unconscious objective criteria in forming his decision in most cases.
The simplest decision model with only two alternatives, is known asÂ Manicheanism, which was adapted by Zarathustra (B.C. 628-551), and then taken by all other organized religions. Manicheanism is the duality concept, which divides everything in the world into discrete either/or and opposite polar, such as good and evil, black and white, night and day, mind (or soul) and body, etc. This duality concept was a sufficient model of reality for those old days in order to make their world manageable and calculable. However, nowadays we very well know that everything is becoming and has a wide continuous spectrum. There are no real opposites in nature. We have to see the world through our colourful mind's eyes; otherwise we do not understand complex ideas well.
DIFFERENT TYPES OF INFORMATION SYSTEM
Organisation depending on their types used different types of information system available on the market. Each system is used for different purpose.
Managers used information for the planning and decision making. Information will varies at each level of the organisation. At the operational level we only concern with day to day management information of the business (transaction processing system, routine reports). Management level seek the medium term, this are mainly internal source of information where trends, summary report are used for short term decision (management information system). At the tactical managers seek information for long-term decision making (Decision support system, Executive information system).
This Essay is
a Student's Work
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.Examples of our work
These are various types of information used by organisation depending on their size and their need. Each system helps managers in decision making and represents an indispensable tool for them.
Transaction processing management (TPS): as we said before this routine reports information that will help managers in their day to day management of a business. They design to process routine transaction efficiently and accurately. An organisation can have various "TPS" depending on the purpose.
Billing systems to send invoices to customers
Systems to calculate weekly and monthly payroll and tax
Production and purchasing systems
Stock control systems to process all movements of stocks
point-of-sale - capture sales data at cash register
Management Information System (MIS): MIS used data captured by the TPS and summarise them into a series of management report for short term decision making. An example those report could quarterly sales figures, quarterly cost report etc...
Decision Support System (DSS): DSS are design to help senior management in the decision regarding issues where there is some uncertainty about the outcomes. DSS provide information, models, and analysis tools for managers and support semi-structured and unstructured decisions. DSS information are often complex and sophisticated, they required some senior knowledge. An example of a DSS would be a 5 year operating plan.
Executive Information System (EIS): also known as Executive Support System (ESS) design to provide executive information and help senior management make strategic decisions. This is a summary of the key information (internal and external) used in the organisation. EIS/ESS are very expensive to run and required extensive stuff to operate.
On the top of those different information system we identify there are also few other information system that operate within organisation such as Office automation system (OAS) that provide effective way to process personal and organisational data. They are design to help personnel to perform better their task and reduce paper wastage. There is also Knowledge Work System (KWS) design to help technical staff in their modelling function; an example of KWS can be CAD/CAM (computer aided design/manufacture).
Importance of information system
Alexander the great said once "data, data, data! I'm surrounded by data. Can't anyone give me the information i really need?" This statement was made during war by Alexander as he seeks information regarding enemy position. But this need couldn't be satisfy always.
The rapid growth of information technology has highlighted the importance of the information system in organisation today. Every part of organisation relay on information. Not any type of information but precise and accurate information that will enable a long term decision.
Organisations are demanding more from their Information Systems (IS) groups than ever before  . As well as "better and more disciplined provisioning of IT services to ensure smooth operation" (Johnson, Hately, Miller, & Orr, 2007, p. 595), IS is expected to respond with agility
in light of new business opportunities, to demonstrate responsible financial management, and satisfy external customers through on-line systems as well as internal staff and management  .
There are three main functions associated with information system.
Operations: IS at the operational level aim to maintain and supports the use of corporate information systems.
Systems Development: aim to develop and implement corporate information system.
Support: the aim of IS at the support level is to provide assistance to users and support IT infrastructure.
Information System involves the intersection of people, processes, technology and organizations to improve individual, group and organizational outcomes (Info Systems J (2010) 20, 297-315). Accordingly, Information System researchers need to find ways to improve both IT-specific and organization-specific artefacts. Virtual groups are an emerging example of organization artefacts, driven by the prevalence of off-shoring and the massive shift towards a digital global economy (Info Systems J (2010) 20, 297-315).
Strategic Decision making and information system
Developing an IS requires broad knowledge of the intended domain, exacting knowledge of data structures and processing logic, and disciplined knowledge of how best to develop software (Iivari et al., 2004).
Information system at the strategic level helps senior managers in their decision making. Mintzberg and Al (1976) imply that one of the main features of decision making is their lack of structure. IS are information design to access unstructured decision making. Senior managers in their quests of profit for business will then be able to make long term planning strategy on trends, budgets forecast, cost budgeting etc...
As we see information system plays a major part in the decision making of any business.
At an IBM hosted conference, Ackerman, a respected farm management economist, stated that:
"The advances that have taken place in calculating equipment and methods make it possible to determine the relationship between ultimate yields, time of harvest and climatic conditions during the growing season. Relationship between the perspective and actual yields and changing prices can be established. With such information at hand the farmer should be in a position to make a decision on his prediction with a high degree of certainty at mid-season regarding his yield and income at harvest time." 
Two main perspectives of decision making can be identify as some literature have been drawn on the subject regarding this issue.
The first approach "the normative mode of strategic choice"(Andrews, 1971) suggest that managers need to analyse the business external environment and conditions (Pearce & Robinson , 1983), then list all the opportunities and threats , strengths and weaknesses that can be found and from draw up required strategy. This approach is design to achieve the business purpose of the organisation (Porter, 1980). In this approach information follow a straight forward series of steps and process where objectives and goals are used to evaluate alternatives.
The second approach "external control perpectives"(Romanelli & Trushman, 1986) imply that the success of any strategic decision making will be influence depends mostly on the external environment factors of the business. External factors are then more likely to influence the objectives and the goal of the business.
Both external and internal sources of data provide solid ground for the business to build a robust information system that will helps managers make strategic and accurate decision.
Information system helps managers monitored the performance of the business and provide them with a tool that helps in the strategic decision making.
At the end of this work, after supporting my argumentation with references, it is clear that decision making play an essential role in information system. Information itself is the bedrock of organisation as we often say; it is then important that the decision managers making regardless the information system should be at the high level of concern as in return the tool they are using to provide that decision is derived from the information system.
Decision making are influence by organisation structure, whether the organisation is central or decentralise, the decision managers are making will be different.
In decentralise organisation, decision making is spread through the organisation. And it is more effective as managers can respond effectively to local problem. It also frees senior manager to focus on strategic companywide issues and ensure that various operating units are responsive to meet local needs.
In centralise organisation, decision making is held by senior management and implemented to lower division managers. This cause issue of lengthy decision making and time consuming issues.
After this essay it is fair to say that information is vital in the strategic decision making of any business. Information plays an important part in any business as the business relies on them to achieve their goal. Managers need information, any action or decision are base on information from various level of the organisation. This small figure show how important is information system in any organisation.
Make decision take action
Analyse, Formulate, recommendation, present result
Collect and store data
The act of measurement
Barabba, V.P. (1991). "Through a Glass Less Darkly," Journal of the American Statistical Association, Vol. 86, No. 413, pp. 1-8.
House, William C. (1983). Decision Support Systems - A Data-Based, Model-Oriented User-Developed Discipline. Petrocelli Books, Inc. New York, NY.
Keller, Gerhard and Thomas Teufel (1998) SAP R/3 Process-Oriented Implementation, Addison Wesley Longman, New York, NY.
Namchul Shin "The impact of information technology on the
Financial performance of diversified firms"
Decision Support Systems 41 (2006) 698- 707
Information Systems Department, School of Computer Science and Information Systems, Pace University, New York, NY 10038, United States
Stephen B. Harsh "Management information systems" Department of Agricultural Economics, Michigan State University (27/04/2004)
Richard Heeks "Failure, Success and Improvisation of Information Systems Projects in Developing Countries" Development Informatics, Working Paper Series, Paper No. 1, January 2002
Juran, Joseph M, Godfrey, A. Blanton. "Measurement, information, and Decision Making" Blacklick, OH, USA: McGraw-Hill Professional Book Group, 2001 P3. http://site.ebrary.com/lib/staffordshire/doc?id=5002834&ppg=3
Shrianjani Marie (Gina) de Alwis, Susan Ellen Higgins, Nanyang Technological University, Singapore "Information as a tool for management decision making: a case study of Singapore" Information Research, Vol. 7 No. 1, October 2001.
Faith-Michael E. "Fuzzy-enhanced multi-criteria decision, analysis model for evaluating university, Academics' research output"
Information Knowledge Systems Management 7 (2008) 273-299 IOS Press
Carol Pollard and Aileen Cater-Steel, "ITIL Implementations in U.S. and Australian Companies: An Exploratory Study Factors of Successful ITIL Implementations in US and Australian Companies".
Information Systems Management, J 26: 164-175
Copyright Â© Taylor & Francis Group, LLC
ISSN: 1058-0530 print/1934-8703 online
Paul Benjamin Lowry, Dongsong Zhang, Lina Zhou & Xiaolan Fu
"Effects of culture, social presence, and group composition on trust in Technology-supported decision-making groups""
Info Systems J (2010) 20, 297-315
Steve Sawyer, Patricia J. Guinan & Jay Cooprider "Social interactions of information systems development teams: a performance perspective"
Info Systems J (2010) 20, 81-107