A typical hierarchical business will have three (3) broad levels of organizational decision-making from the top to the bottom. Each organizational level exhibits different information requirements characteristics in terms of the decision timeframes, certainty, risk, responsiveness, information structure and application of technology. These decision-making levels are characterized by information systems that are different in design and composition because of the level-specific goals of the information systems at each level of the hierarchy. The decision-making levels are highly significant in terms of system thinking, since the purpose of processing data is to produce information for decision making.
1. Discuss the nature and type of information required at each level of decision making within a typical organization hierarchy.
Link this to the various Information systems used by organizations such as Transaction Processing, Management Information and Executive Decision Support systems.
1: operational information
a. Lower level management
b. Transactional processing system (TPS)
c. Day-today operations or activities
d. Leger entries or journal entries
e. Follow established policy or guidelines
f. Easy decision
g. Structured decision/programme decision
h. Operation information is required in decision such as credit granting
2: Tactical information
i. Middle level management
j. Management information system(MIS)
k. Decision support system(DSS)
l. Semi-structured decision
3: Strategic information
m. Top level management or highest level of management
n. Decision support system
o. Executive information system
p. Future oriented
q. Understand decision non-programming decision
r. Ill-defined and difficult decision
s. It contains many variables
t. Strategies: information is required in decision such as merger or acquisition
2. Consider and suggest three possible information sources that could be used to provide data and information for decision making.
Consider how such sources of information may be extracted from the environment and how reliable these information sources are.
Internet sources e.g. Stock level or inventory level, database –required by the lower level management – more for operation
External sources e.g. economics outlook of a country – required by the highest level of management – more for planning purpose
Primary sources of information
Secondary sources of information
Tertiary sources of information (Anon., n.d.)
3. What are the desired qualities of information at each level of the organizational hierarchy?
Discuss the granularity aspects of information for the different levels of management in an organization.
Qualitative characteristics of information – information has qualities and it depends on
1. Accurate – freedom of errors
2. Complete – nothing should be omitted
3. Relevance – level of management
7. Timeliness – information has time values – information that is current, the values increase. On the other hand, information that is older, the values decrease.
4. Are these desirable characteristics different at each level or are there any common desirable characteristics?
What is the significance of detailed versus consolidated data to management at the different levels of management?