Types of Decisions and the Decision-Making Process

Posted: November 1st, 2019

A company recently invested in information systems for efficient operations and strategic positioning in the industry. as an IT graduate with knowledge in the management of information systems, using the question below, discuss how you would assist the firm in the following:
1. what are the different types of decisions and how does the decision making process work?2. how do information systems support the activities of managers and managers and management decision making?3. how do business intelligence and business analytics support decision making?4. how do different decision making constituencies in an organization use business intelligence?5. what is the role of information systems in helping people working in a group make decision more efficiently?

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Types of Decisions and the Decision-Making Process:
There are typically three types of decisions made within an organization: operational, tactical, and strategic decisions.
Operational decisions are routine and repetitive decisions that support day-to-day activities. They are usually made by lower-level managers and employees and involve structured data and predefined procedures.

Tactical decisions are medium-term decisions that focus on allocating resources, coordinating activities, and achieving specific objectives. These decisions are made by middle-level managers and require both structured and semi-structured data, along with some analytical skills.

Strategic decisions are long-term decisions made by top-level executives. They involve setting organizational goals, formulating strategies, and making significant investments. Strategic decisions rely on unstructured data, external information, and the expertise of managers.

The decision-making process typically involves several steps, including problem identification, data gathering, analysis, evaluation of alternatives, and implementation. Information systems play a crucial role in facilitating these steps by providing relevant data, analytical tools, and communication channels.

Support of Information Systems for Managerial Activities and Decision Making:
Information systems support managers at different levels of an organization by providing timely, accurate, and relevant information for decision making. Here are a few ways information systems assist in managerial activities:
a. Data Storage and Retrieval: Information systems store vast amounts of data, which can be accessed and retrieved quickly. This helps managers gather the necessary information for decision making.

b. Data Analysis and Reporting: Information systems provide tools and techniques to analyze data, generate reports, and present information in a meaningful way. This enables managers to gain insights into the organization’s performance and make informed decisions.

c. Communication and Collaboration: Information systems facilitate communication and collaboration among managers and teams. They provide platforms for sharing information, exchanging ideas, and coordinating activities, which enhances decision-making processes.

d. Decision Support Systems (DSS): DSS are specialized information systems that assist managers in making complex decisions. They incorporate analytical models, data visualization, and simulations to support decision making under different scenarios.

Role of Business Intelligence (BI) and Business Analytics in Decision Making:
Business intelligence refers to the process of collecting, analyzing, and presenting business information to support decision making. Business analytics, on the other hand, involves the use of statistical and quantitative methods to derive insights from data. Here’s how BI and business analytics support decision making:
a. Data Integration and Analysis: BI systems consolidate data from various sources, such as internal databases, external market data, and social media, to provide a comprehensive view of the business. Analytics tools then analyze this data to uncover patterns, trends, and relationships.

b. Performance Monitoring: BI systems track key performance indicators (KPIs) and provide real-time dashboards and reports. Managers can monitor performance metrics and identify areas that require attention or improvement.

c. Predictive and Prescriptive Analytics: Business analytics techniques, such as predictive modeling and optimization, help managers forecast future trends, identify potential risks, and optimize decision outcomes. This assists in making more informed and proactive decisions.

Use of Business Intelligence by Decision-Making Constituencies:
Different decision-making constituencies within an organization can leverage business intelligence in various ways:
a. Executives and Top-Level Managers: Executives utilize BI to gain strategic insights, monitor overall organizational performance, and make high-level strategic decisions.

b. Middle-Level Managers: Middle managers utilize BI to track departmental performance, allocate resources efficiently, and make tactical decisions related to their specific areas of responsibility.

c. Frontline Managers and Employees: BI empowers frontline managers and employees with access to real-time operational data, enabling them to make informed decisions related