Table of Contents
Relevant
Precision
Usefulness
Promptness
Completeness
There are usually three types information required to support the decision-making within an organization hierarchy. This includes the operational information for operations, the tactical data for mid-levels and the strategic data for top-levels.
What information is required at each level of the hierarchy?
Operational Information
As such activities are normally controlled and run by the lower levels of management, operational information is required by the lower management (Arrowsmith,James, 2013). The lower levels are responsible for running and controlling such activities (Arrowsmith and James, 2013). Lower-level manager also uses information from the marketing department to control sales representative performance. In most cases, operational information refers to those activities which are intended to be measured according to specific standards. Majority of operational information comes from internal data sources, such as records of performance. Operational data is not highly predictive, and therefore has a limited horizon. Operations support systems are an information system which relates to such information. Operations Support Systems, or OSS, are information systems that produce a number of products for management purposes. They can be used to process business transactions, control production processes, or support inter-company collaborations. The systems do not concentrate on a single information product. Management information systems are required to process the information. & Kadir,2013)
Information on tactical information
Middle-level man!management can use tactical information for issues like allocating resources, establishing controls and assisting the top level plans of an organisation. Middle-level management requires information on alternative sources of funding and their uses, as well as potential opportunities to deploy surplus resources into short-term securities. Information of this type is often predictive, but focuses on the short-term. It can be a mixture of current information and historical information, which can be sourced from both internal and outside sources. Management support systems and management information systems are information systems which deal with this information. Management Information Systems (MIS) and Management Support Systems (MSS) produce reports that managers can use to make daily decisions. Information is most often processed so that it meets the needs of both the operational level and the tactical level, and the decision making is well defined and structured (Anon. 2014).
Information about strategic information
The strategic information helps to determine and evaluate these options so that the managers can make wise choices which are better than those of their competitors. Strategic information can help managers make decisions that are more advantageous than those made by their competitors. Managers use strategic information to set goals, establish priorities, initiate new programs and implement acquisition policies. Managers at the top can use data about the amount of money needed to support ongoing and future company projects over the long-term in order for them to decide whether or not the company should be listed on the market or receive a loan. Strategic information is predictive, relying heavily on outside data, long-term, and summarized. Sometimes, it may include hypotheses. The strategic information does not only refer to external information. In the old days, strategic information was only considered to be information about the external environment. In recent years, it has become clear that internal data is as crucial to a strategy’s success or failure. Information systems that provide strategic information include:
Decision Support System(DSS) is an information system that uses computers to provide interactive information support during the process of decision-making. DSS support business decisions by using analytical models and well-structured database, as well as the judgments and insights of a typical manager.
Executive Information Systems and Executive Support Systems (ESS), also known as Executive Support Systems or Executive Information Systems, are systems of information that combine the best of MIS & DSS. The information is displayed in a way that suits the executive’s preferences, for example a personal user interface. Each type plays a part in enhancing the effectiveness and efficiency management. All managers need different amounts of information. It is only natural, therefore, that even the CEO of a firm uses some operational information. It is the ratio of the various types of information required to meet the needs of upper, middle, and lower management levels.
Daily, decision makers have access to a number of sources for information both internally and externally to aid in the process of making decisions (Dragan Sutevski,2013). Information sources can include: data-driven reports or analyses, advice and recommendations presented in committees, as well documents from departments or the government.
This is the best way for management to get the information they need in a timely manner.
Data-driven Reports Managers today rely heavily on reports and data from software. This software provides financial and other information that can be used to make important decisions. These programs will allow the management to track all departmental activities and information. These reports include monthly financial statements for departments, reports on specific liabilities and reports on accounts receivables aging.
Committees are a good source of information and can present analysis and advice. The context provided by these presentations allows the management to make better decisions. Minutes of committee meetings can provide the information needed for making decisions. Important departmental documents or documents from the government. Government documents made public can also help in decision-making. These speeches were delivered to the parliament. These documents give the management a better understanding of potential and possible changes.
The information received by each level in the hierarchy is characterized differently, but the traits that make it relevant and useful are the same (Thakur D., 2012). These are the desired characteristics that are common to each level in the organization hierarchy.
Relevance Information must be pertinent to the decision that the manager will make. Effective MISs will use data to transform into meaningful forms and make decisions. An MIS can show a manager the profit margin and sales volume for various pricing scenarios based on the data from previous years.
Accuracy The accuracy and efficiency of a MIS are largely determined by the information it contains. The accuracy and calculation of the data will determine the quality of the information. Data sources will affect the accuracy and reliability of the resulting information. MIS databases often include historical performance data, and this can serve as a valuable indicator of accuracy and reliable output.
Usefulness While the MIS information may be accurate and timely, its usefulness will be determined by whether it is able to help the manager make a specific decision.
Information about employee performance is far more valuable and important. For example, if the manager has to decide which employee to dismiss due to poor economic conditions, it is vital and relevant to know the cost-savings that will result from the firing of this employee. MIS must make information useful and easily accessible.
Timeliness Management has to take decisions on the future of their organization based off data, particularly when evaluating current trends. The data must be current to ensure that the decision reflects the actual situation and is accurate in predicting the future performance of the company. If the data is delayed, it may lead to inaccuracies if they are old. In the top management, it is important to have this trait.
Completeness The information presented must be complete and relevant in order to make an informed decision. Missing data will result in a partial display of information. Management can either fill in the gaps or take decisions based on the information that is missing. Information that is not presented in a complete manner can result in decisions that are not as effective as expected. In lower-level organizations, people tend to need more detail to understand information. When information is compiled at a higher level, its granularity changes and becomes coarser. Upper management may find it difficult to dig deeper into a document that is aggregated to discover possible problems.
It is possible to make a gross error when manually summarizing multiple spreadsheets.
Q5. For the lower level of management, the decision-making processes is about selecting the best options. There are many alternatives in every organization.
For the middle level of management: Implementation of managerial function. Without decision making, various managerial functions such as planning and controlling cant be conducted. The middle management level: Implementation and implementation of managerial functions: Planning, controlling and other managerial functions, like decision making, cannot be performed without it. In contrast, an employee who engages in making decisions will perform the task through the decision-making functions. The middle management has a major impact on the implementation of strategic policies at the top management level. Top level management: Planning and policy are determined by decision-making. Top management must make decisions in order to plan. Top management’s decision-making has a major impact on planning.
Decisions are made by different people and functions within the organization or company. In a competitive world, organizations and companies can only survive if they make the right and correct decisions. Correct decisions will help to ensure the success of a business. All levels of management: The decision can be used to evaluate managerial performance. It is clear that a manager who makes a correct decision is capable, qualified and efficient. When a manager makes a bad decision, they are disqualified. It is because of this that decision-making can be used to assess the performance of a manager.
