As mentioned in the last post relating to the use of Information Systems (IS) for decision making, there are three types of decisions which IS can be used for. Each type relates to a different management level, i.e. Operational Management, Middle Management, and Senior Management, and are very simply categorized into:
- Structured Decisions
- Unstructured Decisions
- Semi-structured Decisions
In this post, I intend to define exactly what area each relates to and how IS benefits them.
First of all, Structured Decisions: These involve the operational levels of management, such as individual employees and teams. They relate to the most basic of decisions – routine, repetitive choices with set answers, requiring no extra thought or effort. IS is obviously of great use in this area as basic tasks, such as re-ordering stock, are done automatically. Due to this fact, employee’s time is freed up for more challenging work.
Secondly, Unstructured Decisions: These are far more complicated than the decision-making previously mentioned. IS can, of course, be used to aid these types of decisions, but they also require a great deal of personal effort on the part of the manager. They are the duty of senior management and involve long-term decisions which have an immense impact on the firm’s operation. IS can be used to help managers calculate potential outcomes of alternative choices, e.g. identifying whether to discontinue the production of certain products based on which are receiving the highest revenue. However, it is the user of IS themselves who must make the final choice.
And, finally, Semi-Structured Decisions: Involved in these types of decisions are a combination of the previous two forms. Certain parts of the problem may have a clear-cut answer, and can be aided by basic IS such as those mentioned under structured decision-making. Yet, they are not completely straight-forward. These decisions are undertaken by middle-management, who are actively involved in the process; a combination of IS and personal involvement is vital in this area. e.g. when calculating a budget, IS can be used to help do the basics such as calculating costs for different levels of production, or whether it is profitable to produce a certain product, but the decisions relating to the most profitable combination of products is down to the manager.
So, although it’s clear that decisions can be divided into the three different types described above, it is still evident that IS can be used to aid all categories.