On the contrary, some decisions may be taken after much deliberation and careful consideration of alternatives. It is a goal-oriented process and provides solutions . Unexpected cost increases a less-than-perfect fit with existing organisational subsystems, unpredicted effects on cash-flow or operating expenses, or any number of other situations could develop after the implementation process has begun. Operations Research. It is possible to assess the acceptability and efficacy (efficiency) of a proposed solution by considering the anticipated responses to it. So managers must ensure that those who are responsible for implementation have some stake financial or otherwise in the success of the solution. Group decision-making has its merit and drawbacks. Fig.8.4 gives an indication of the relative number of each type of decision made at each level in the organisations. Assessing the effect of possible future changes in the environment is an essential step in decision-making. A manager has always to take decisions of one sort or another. This is more so in those situations involving complex problems where no one member is a specialist in the problem area. Copyright 10. Content Filtration 6. Decisions are made in the best interest of the organization. Prohibited Content 3. The quality of decision-making at all levels of the Organisation can be improved with the support of an effective and efficient management information system (MIS). 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). So more effective alternatives are not considered. True, participation in problem solving by organisational members should increase their receptiveness to the chosen alternative.. Feedback is a necessary component of the decision process, providing the decision maker with a means of determining the effectiveness of the chosen alternatives in solving the problem or taking advantage of the opportunity and moving the organisation closer to the attainment of its goals.. Use of computer: Complex process: Economical: Variety: Future-oriented: Flexible: What are the basic functions of MIS? In fact many of the operations research techniques developed during the last few decades are methods of determining the relative efficiency of various alternatives. Good MIS ensures good decision making just in the same way bad MIS drive the making of bad decisions. However, decision-making is usually most closely associated with the planning function, inasmuch as it is an important tool for most planning activities. The Nature of Decision Making 3. These are basic activities relating directly to the work of the organisation. The generation of various possible alternatives is essential to the process of decision-making. The normative model of decision-making considers constraints that may arise in making decisions, such as time, complexity, uncertainty, and inadequacy of resources. Decision-Making at Different Levels in the Organisation: A study of the decision-making in different organisations reveals that the three types of decisions listed above are not evenly spread throughout the organisation. 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. Usually each alternative has to be assessed to determine its feasibility, its satisfactoriness, and its consequences. Level Two: The Leader Makes the Decision with Input from Key Individuals/Stakeholders. Management information system is a system, which is designed to provide information to various organizational levels, to assist them in decision-making. This complexity arises from the complexity and dynamism of todays organisations and their environments. A significant constraint is, of course, lack of adequate resources. Managers are faced with a wide range of decisions on any given day. Management Control Level: Organize 3. They are also limited by less-than-complete information and knowledge. Problem formulation seems to be the most neglected aspect of the decision-making process. Managers rarely consider all possible alternatives to the solution of a problem. Business managers have to make various types of decisions. Thus when a situation calls for a programmed decision managers must ultimately make use of their own judgement. As implementation of solution proceeds, organisation members should be able to modify the solution based on what they learn during implementation. Similarly, the financial manager has to decide whether to invest in a new plant or to lease. Meaning of MIS 2. 4. For example, in research and development management has to decide whether to pursue one or multiple design strategies. The Delphi Technique 5. In addition to strategic, tactical, and operational decision-making, business intelligence supports the three types of decision-making. See Fig.8.7. In fact, Simons view of the modern manager is different from the views of other writers on management. It does require wisdom and experience to evaluate several alternatives and select the best one.. The main objective of information systems is helping decision makers by providing accurate and time based information helping them in making the right decisions in turbulent . As the final step in the decision-making process, managers should be very sure to evaluate the effectiveness of their decision. The information system assists the mid- and high-level management of an organization by analyzing huge volumes of unstructured data and accumulating information that can . Evaluation of Alternatives and Selection of a Course of Action. Every organization needs to make decisions at one point or other as part of managerial process. Thus managerial decisions are grouped as: (a) Strategic decision The core activities of Oil India Ltd. would be exploration, drilling, refining and distribution. Otherwise it may cease to exist. Lower level managers are used in the preliminary stages of the decision process. 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 . Similarly, when inventory of raw materials occurs. Further, he argues that the individual can be rational in terms of the organisations goals only to the extent that he is able to pursue a particular course of action, he has a correct conception of the goal of the action, and he is correctly informed about the conditions surrounding his choice. Content Guidelines 2. MIS comprises of three elements: Management, Information and System. Privacy Policy 9. 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. An MIS gathers data from multiple online systems, analyzes the information, and reports data to aid in management decision-making. Management Information Systems will help achieve a high level of efficiency in a company's management operations. For example, in case of a multi-product firm like the Godrej, the company policy may put a ceiling on the advertising budget for each product. Levels of Decision Making (On decisions that affect the group) 1. A state of uncertainty refers to a situation in which the decision maker does not know what all the alternatives are, and the risks associated with each, or what consequences each is likely to have. Whatever may be the nature and dimension of the problem at hand, the manager has to decide what actions need to be taken or has to arrange for others to decide. 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. MIS helps organize such information, so decision making becomes easier right from simple low-level decisions to strategic plans made at the top level of management. The leader decides with input from others. According to this model, decision-making is characterized by Limited information processing - A person can manage only a limited amount of information. For a manager the ability to make the best professional decision is the key to success. vii) Management information system helps an organization to achieve a competitive advantage. There are various reasons for such resistance such as insecurity, inconvenience and fear of the unknown. In short, the concept of bounded rationality refers to boundaries or limits that exist in any problem situation that necessarily restrict the managers picture of the world. Perhaps the most important step in decision-making process is to develop alternative courses of action to deal with the problem situation. Act) and the economic viability of setting up a Second Mumbai Airport. It is perhaps easiest for managers to make programmed decisions.. Top management typically develops the strategic plans. There is no denying the fact that programmed decisions limit the freedom of managers to a considerable extent. Determine why this decision will benefit your customers or fellow employees. When managers know with certainty what their possible alternatives are and what conditions are associated with each alternative, a state of certainty exists. The manager does not operate in a certain environment. Fourthly, managers can communicate decisions and their rationale to their own work groups. The Decision-Making Context 5. The ESS is the major recipient of data from the lower-level systems which is mainly used in unstructured decision-making. Leader decides and communicates decision to the group (Leader does require group member input) 3. Managers may simply be unwilling to ignore their own motives and therefore not be able to continue searching after a minimally acceptable alternative is identified. Every organisation has written or unwritten policies that simplify decision-making in a particular situation by limiting or excluding alternatives.. It is supporte by the use of the management tools of planning and control. This is an important step because situation definition plays a major role in subsequent steps. This is partly a matter of determining how the problem that is being addressed came about. For example, when an important equipment breaks down, the manager has to decide whether to repair or replace it. Management information system (MIS) Definition. 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). Such boundaries include limits to any managers knowledge of all alternatives as well as such elements as prices, costs and technology that cannot be changed by the decision maker.. 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