Presently globalization of markets has increased business competition thereby making the prices of goods and services affordable. Notably, the operational, tactical and strategic decision has played a significant role in the success of attaining objectives and goals of the firm. On the other hand, business information systems have also, increased the accuracy of decision-making because these models scientifically have been used to analyze various types data thereby providing accurate data. This paper, therefore, seeks to explain the different kinds of business decisions as well as to identify what types of an information system that suits each category. Additionally, the paper shall look into characteristics of various business decisions as well as provide a relevant example of each.
Operational business decisions are those decisions that occur daily and are usually short term in nature. Notably, this decision is administrative in nature and carries little risks with it; as such, its implementation is extremely fast. For instance, reordering of finished stock by an employee who works in an open cultural environment where exists highly level of exchange of information and have full mutual of trust can feel entitled to making such decision. Most importantly, this kind of decision-making process increases efficiencies in the company; as such, the set objectives and goals can be easily attainable within the set period. Important to note that open line of communication supports as well as encourage flow of correct information; as a result, the company gains competitive advantage in the industry
Operational business decisions such stock re-order has the following features:
It is short term in nature
The risk associated with it is minimal
Can be performed by any staff member that operates in open culture where a high degree information exchange exists as well as mutual trust among themselves.
They are administrative in nature
Their rate of implementation is very fast
The type of business information system that can fit operational business decision is a transaction-processing system. It is because this system is designed to capture and process daily data in real time. It can rely on barcode scanner technology to track the inventory thereby providing accurate information concerning the level of stock in the store. This type of system is used at operation decision-making level.
A tactical business decision is that decision that is put in place as a corrective measure to monitor long-term objective and goals of a company. Munirat, Yusuf, Mohammed Sanni, and Aina Olalekan, Kazeem expounded that a tactical decision refers to those plans that the management use as a contingency plan to correct misguided strategy that could threaten the organization performance (2014, 79). An example is a product redesign, and a company can frequently redesign its products as a tactic to meet consumers wants and needs. Through this, they can fail to understand their target market requirement. Departmental managers often carry out tactical business decision to promote efficiency in decision making translating into increased sales.
Features of a tactical business decision
They are medium term decision
Done at management level
Deals with less balky data
Act as a contingency action for long term decision
The type of information system that fits here is management information system; this is because this system provides a control oriented report in a program format at strategic, managerial as well as operational level. The kinds of decision at this stage are considered structured because most of the information has been filtered through the decision-making process. This type of system is designed to support managerial roles such as planning, coordination, controlling and directing. Notably, the system is programmed to collect data systematically and in a methodical manner, through this system the management can make an informed decision that promotes the company growth, unlike their rivals who have not adapted the system.
A strategic business decision is not only long term but also complex in nature; as a result, it requires higher degree keenness while analyzing a problem that company faces. Kivinen, Tuula, and Johanna Lammintakanen noted that strategic business decision refers to an executive function that deals with the analysis of complex information with the aim of making an informed decision (2013, 92). Additionally, it depends on long-term goals and objectives of the firm with the goal of increasing its competitiveness in the industry. Kivinen, Tuula, and Lammintakanenfurther explained that strategic business decision has an impact on various disciplines in the company such as finance, marketing, and management of human resource.
For instance, modification of a firms culture as a strategic business decision affects all stakeholders, and it is on the docket of the executive.
Features of a Strategic business decision include:
They are long term plans
They are involved in nature
Deals with accurate data
Are carried out by the executive
Deals with risky portfolios
The information system that fits this type of decision process is decision support system (DSS). DSS refer to a preprogrammed application that provides the users with a decision-oriented solution to both structure and unstructured decision that might come up unexpectedly(Khodashahri, Nastaran, and Masoome, 2013, 23). Additionally, this system uses sophisticated statistical techniques as well as mathematical models to provide interactive solutions. Examples of this system include bank loan management systems and financial planning system. The reason why this decision support system fits strategic business decision relates to its features because it depends on the executive support. Important to note, this system works under the under the user of an executive officer of a company.
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