MIS STRUCTURE BASED ON DECISION MAKING

One of the major responsibilities of managers is processing of information and making decisions. Information systems are developed to help the managers in their decision making process. The ultimate purpose of MIS to make decisions at all levels of operations based on information flow. If decisions can not be automated through MIS design, the objective becomes one of providing information to improve the decision making ability of the managers.

The decision making process is based on the support of MIS in the organization. The manager must be aware of a problem before a decision is made. A problem exists when the real situation is different from the expected one. After the problem has identified, the causes of the existence of the problem must be identified and then the solution to the problem has to be found. The habit of making decisions based on the problem solving process consist of the following:-

• Define the problem

• Identify the alternatives

• Choose the best alternatives

The problem solving methodology explained above is also suitable to explain process of decision making. The decision making process involves the following four stages namely Intelligence, Design, Choice and Implementation.

INTELLIGENCE STAGE

Intelligent stage consist of identifying and understanding the problem occurring in the organization. This stage includes the process of searching the environment and identifying the events and conditions requiring decisions. In other words this stage is related with the identification and formulation of the problem which is to be solved by the decisions. This is really a difficult stage in decision making because a slight error in formulating the problem may result in decisions.

DESIGN STAGE

In the stage the decision maker evaluates all possible course of action. The design stage involves the gathering of all possible the course of action to solve a problem. The executives design all possible solution to the problem considering the strength and weakness of the organization.

CHOICE STAGE

Under this stage, manager select the most favorable course action from different alternatives and monitors its implementation. In other words choice is concerned with the selection of the most appropriate solution from different alternatives.

IMPLEMENTATION

During implementation stage, decision is put into effect. Once an alternative is chosen, it is implemented. The annual process of decision making ends with this stage. After choosing an appropriate alternative, the decision must be converted into a reality.

Each of these decision making stages require different types of information. In the intelligent stage the decision maker collects information from both internal and external sources. The design stage of decision making involves developing and evaluating alternative course of action. A major consideration introduced by simon for this stage is whether the decision situation is programmable or nonprogrammable, or, more popularly, structured or unstructured

PROGRAMMED AND NONPROGRAMMED DECISIONS

It is very important to distinguish between two types of decisions namely programmed and non-programmed. A program is a plan for the automatic solution of a problem. There are simply a set of instructions to accomplish a given task

PROGRAMMED OR STRUCTURED DECISIONS

A programmed or structured decisions is one in which decisions rules are applied. These decisions are routine and repetitive. A predetermined decision rules or algorithms are worked out so that every time the situation occurs, a new analysis not required. Office supplies, inventory reorder and preparation of pay rolls are examples of structured decisions.

The necessary guidelines and rules required for taking such decisions are available in the form of a procedure manual to the users. The important characterstics of structured decisions are follows:-

1. These decisions are well defined, repetitive and routine in nature.
2. Pre determined decisions rules or algorithms are used.
3. These decisions can be delegated to lower level employees.
4. The cost of taking such decisions is low.
5. Decisions can be made with the help of computer.

It is easy to provide information system support for these types of decisions. Many structured decisions can be made by the system itself, eg rejecting a customers order if the customers credit with the company is less than the total payment of the order. However, managers have information that the system doesn’t have. For eg ,the customers order is not rejected because alternative payment arrangements have been made with the customer.

In other cases the system may make only part of decisions required for a particular activity. For eg ,it may determine the quantities of each inventory item to be recorded ,by managers may select the most appropriate vendor for the item on the basis delivery lead time ,quality and price

NONPROGRAMMABLE OR UNSTRUCTURED DECISION

These types of decisions are occasional and unique in nature.There are no pre defined procedures available to solve the problem for each occurrence. Introduction of a new product, purchasing of fixed assets are some of the examples of this type of decisions.

Due to the absence of decision rule the executive have to make use of problem methodology which in turn depends on human judgements.This approach to problem solving is known as system approach to problem solving. Computers cannot make unstructured decisions. But it can be used as an aid to process large volume of business data.the following are the important characterstics of non programmed decisions.

• They are occasional and unique in nature. Hence they are not repetitive.
• No pre defined procedures are available to solve problems.
• Management has to depend on problem solving methodology to take decisions.
• These decisions cannot be deligated.
• The cost of taking decisions us comparatively high.

GROUP DECISION MAKING

It is another important aspect of managerial decision making. We know that in almost cases, decisions are not made by a single individual alone. Most decisions in the real world are made by groups of people. They sit together, discuss the problem, and find suitable solutions.

The success of group decision making depends on the following factors

• The nature and characteristics of the group.
• The objectives for which the group is functioning.
• The decision making context
• The use of computer based information system such as electronic meeting systems and group decision support system.
• The decision making process adapted by the people.
• Various results obtained out of group decision making process.

METHOD OF GROUP DECISION MAKING

• Each number of the group gives his own ideas about a problem.
• When the individual ideas are presented in the groups without any discussions.All individual ideas are thus listed before the group.
• After that the members of the group ranks all these ideas presented by all members in the group.
• On the basis of such a rank list a suitable decision is made.

Various computer based information systems are available to increase the effectiveness of group decision making such as group decision support system (GDSS) and electronic meeting system (EMS)

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