How organizations use Information Systems – Types of decisions:
This week we will look at the types of decisions made by each operational level in common organizations, that is Executive/Strategic Level, Managerial Level and Operational Level (see diagram 1 below):
There are 3 primary different types of decisions made by eachlevelnamed above, with many information Systems used to make various decisions at these levels, namely:
– Structured Decisions
– Un-Structured Decisions
– Semi-Structured Decisions
I will now look at each of these types of decisions, giving more detail and examples where applicable:
Many structured decisions involve definitive procedures that need answering, for example if a customer of a bank wishes to apply for a mortgage or loan. The sales rep must then check whether the customer meets certain criteria for this credit loan. These structured decisions are therefore very repetitive, regularly the same and in general, routine. As a result, they do not need to be treated as new each time! Mainly used by majority of employees in a company.
Unstructured decisions are decisions that are very important to an organization, used mainly by top management and senior managers. These decisions do not have a routine, or well documented procedure for making them and are novel and of course, non-routine. An example of an unstructured decision that needs to be made could be; Should we produce a new product for a certain market segment?
Within these three types of decisions is a hybrid of both structured and un-structured decisions. Semi-Structured decisions is used when only part of a certain problem has a clear-cut answer which is provided by accepted procedure. This type of decision has elements of both types of previous decisions and is used primarily by many middle managers in organizations as opposed to employees and senior managers. For example: Why is order fulfillment report in dublin showing a serious decrease