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DECISION MAKING BASED ON AND DECISION SUPPORT SYSTEM

Şükrü Ada Mohsen Ghaffarzadeh Associate Professor of Educational Management; Inspection, Planning, Economy, Ataturk University, Turkey PhD Student of Management Information , Ataturk University, Turkey Email: [email protected]/[email protected]

ABSTRACT:

Information has become an essential resource for managing modern . This is so because today’s business environment is volatile, dynamic, turbulent and necessitates the burgeoning demand for accurate, relevant, complete, timely and economical information needed to drive the decision-making process in order to accentuate organizational abilities to manage opportunities and threat. MIS work on online mode with an average processing speed. Generally, it is used by low level management. Decision support system are powerful tool that assist corporate executives, administrators and other senior officials in making decision regarding the problem. Management Information Systems is a useful tool that provided organized and summarized information in a proper time to decision makers and enable making accurate decision for managers in organizations. This paper will discuss the concept, characteristics, types of MIS, the MIS model, and in particular it will highlight the impact and role of MIS on decision making.

Key words: Management Information Systems, Decision Support Systems, Decision-making

INTRODUCTION term planning as well as budgeting. Ali Safari and Asefeh Asemi have discussed two Number of authors has discussed the main information systems, namely, MIS and role of in decision DSS, its characteristics, relations, and making, Kostetsky was one of the first connections of each concept to decision- authors who wrote about the relationship making process. Srinivas Nowduri has the between information systems, system same consumption about the relationship analyst and decision making in 1966. between MIS and decision making. Decision Management information system provides making process and its impact on top level knowledge about the relative position of the management in a business was organization and basic forces at work. It explained also with an emphasis on provides the right information needed in automated decision making. The study decision making process and help the found that the dynamic nature of MIS makes organizations , planning and it difficult for some organizations to keep up operational functions to be carried out with the principles, , propositions effectively (Leonard, 2008). Furthermore, or even ideas. Barry Chris, provide added a Ajayi, I. A. and Omirin, Fadekem new conceptual framework for decision investigated the use of management making and information systems information systems in decision-making on development, same as another authors long-term planning, short-term planning who analyzed the role of MIS in decision and budgeting in the South-West Nigerian making. A framework was developed, Universities. A stratified random sampling combining an analysis of decision making technique was used to collect and within the systems development life cycle, conclude that that there was a significant key models of decision-making and the difference in the use of MIS for decision actors involved in the process of systems making on budgeting between Federal and development. Barry Chris concludes that a State universities in favor of the Federal deeper understanding of differing viewpoints universities. The authors recommend that on systems development held by actors and the MIS units should be adequately financed other phenomena can be illustrated with the and maintained to ensure a free flow of framework. George Huber also draws a information and adequate use of MIS in of effects of advanced information decision-making on short-term and long- on organizational design,

Journal of Management Research and Analysis, January – March 2015;2(1):98-107 98 Ghaffarzadeh S. A. M. Decision Making Based On Management Information System… intelligent and decision making, the support System , transaction processing theory studied the effects that computer- system, expert system .But we discuss assisted and decision management information system and aiding technologies have on organizational decision support system. In Management design and decision making. information system these system assist lower level management in problem solving Humber focuses on that and making decision ( Manian,2011). They affects the and timelines of decision use the result of transaction processing and making from one side and from the other some other information also. side has prompted changes in organizational design. On the other hand Felix Alvarado in It is a set of his study " Complementary uses of functions. It should handle queries as quilt Information Systems in Decision Making, as they arrive. An important element of Planning and Democracy: An Example in management information system is the Education Sector" describes the database .In decision support system, they ongoing implementation of web assist higher management to make long tools in public education and other term decisions. These types of systems sectors in Guatemala. Software tools were handle unstructured or semi structured developed for use in business was adopted decision .A decision is considered for planning and decision making in public unstructured if there are no clear procedure institutions. The study summarizes the for making the decision and if not all the salient aspects of the experience so far of factor to be considered in the decision can implementing and expanding what has been be readily identified in advance. The decision called the “Platform for Integrated Social support system these are not of recurring Information,” It discusses the issues this nature. Some recur infrequently or occur Platform raises as a resource for improved only once. A decision support system must public decision making, policy analysis and very flexible .The user should be able to especially, as a promising but challenging produce customized reports by giving tool for democracy in the education sector. particular data and format specific to However, the world health organization has particular situations. There are different introduced a report by who study group it views in determining the types of was about the role of research and information systems and their information systems in decision making for classifications. But in most categories, with the development of human resource for titles such as: (Laudon and Laudon, 2009) health, the study identified a number of problems and noted causes of these Transaction Processing System (TPS) problems such as inefficient data definition and, lack of relevant information and poor This is also referred to as data coordination of available information on the processing system. It performs the essential other hand the study identified a positive role of collecting and processing the daily factors that prompt decision making such as transactions of the organization. They problem awareness and easy availability of serve at operational levels of the presented information. The study group organization. Examples of transactions emphasized that strengthening decision include purchase payroll, reservation, making in the development of human invoices, payments, shipping, registrations, resource of health, by linking information orders and sales. and research to decision making and prompting relevant information requires a Expert System (Specialist) (ES) coordinated approach. This is an extension of the decision INFORMATION SYSTEM support system. It is a programmed decision-making information system that Information system are constantly captures and reproduces the knowledge changing and evolving as technology and expertise of experts and then continue to grow. Basically we have many simulates the thinking or actions of that types of information system like expert to help users with less expertise. management information system , decision These applications are implemented with Journal of Management Research and Analysis, January – March 2015;2(1):98-107 99 Ghaffarzadeh S. A. M. Decision Making Based On Management Information System…

Artificial Intelligence (AI) technology. and to increase the productivity of the is a computer-based group. technology that has the ability to behave like humans, learn languages and emulate Management Information System (MIS) human expertise and decision-making. The Management Information Office Automation System (OAS) System (MIS) is a concept of the last decade or two. It has been understood and This system supports a wide range of described in a number ways. It is also business activities. Office systems are known as the Information System, the applications designed to improve workflow Information and Decision System, the and communicate among workers regardless Computer- based information System( of their physical locations. Typical office Davis & Geist, 2004). Definition of system handles and manages document Management Information Systems: The MIS (through word processing, desktop is defined as a system which provides publishing, information support for decision making in document imaging and digital filings), the organization (Barton & Parolin, 2005). scheduling (through electronic calendars) The MIS is defined as an integrated and communication (through electronic system of man and machine for providing mail, voice mail and video conferencing). the information to support the operations, the management and the decision making Personal and Work Group Information function in the organization(Bendoly, 2008). Systems (WGSS) The MIS is defined as a system based on the database of the organization evolved for the Personal information system is the purpose of providing information to the system designed to meet the needs of a people in the organization. The MIS is single user while work group system is defined as a Computer based Information designed to meet the needs of a workgroup System (Bresfelean, 2009).

Figure 1: Simple View of MIS (Kumar, 2006, 45)

Decision Support System (DSS) and information to support semi-structured and unstructured organizational decision Decision-making is an essential making. Common characteristics of DSS component of organizational life. Decision include: makers receive and analysis information using many different media, including - Problem structure, used in semi- traditional print, group and interpersonal structured and unstructured decision information exchanges and computer-based context tools Decision support systems (DSS) is a - Intended to support and augment generic concept that describes information decision makers not replace them systems that provide analytical modelling Journal of Management Research and Analysis, January – March 2015;2(1):98-107 100 Ghaffarzadeh S. A. M. Decision Making Based On Management Information System…

- Supports most phases of decision- structured and unstructured decisions making process (Power, 2002,. Ezine, 2010. James, 1998). - Uses underlying data and model The Decision support system are able to help - Interactive: DSS is designed to be an groups to make the decision .It should not interactive decision aid be responsible for individual decision making .The Decision support system is A decision support system (DSS) is easy to use .A user should not be required an integrated set of computer tools to be computer operator to generate reports allowing a decision maker to interact .It should be convenient for the user to use directly with computer to retrieve DSS(Singh & Sharma, 2012). information useful in making semi

Figure 2: A Simple View of DSS ((Kumar, 2006, 75)

Figure 3: Types of Information systems and organizational (Gabriel, 2012, 89)

Types of Decision Support System supports more than one person working on a shared task. Many collaborators work There are a number of decision together to come up with a series of decision support systems. These can be categorized to set in motion a solution or . Most into five types: driven communications driven DSSs are targeted at DSS, data driven DSS, document driven internal teams, including partners. The most DSS, knowledge driven DSS and model commons technology used to deploy the DSS driven DSS. A communication driven DSS is a web or a client server. In general, Journal of Management Research and Analysis, January – March 2015;2(1):98-107 101 Ghaffarzadeh S. A. M. Decision Making Based On Management Information System… groupware, bulletin boards, audio and or software running on stand-alone PCs. video conferencing are the primary Model driven DSSs are complex systems technologies for communication driven that help analyses decisions or choose decision support. Data driven DSS model between different options. puts its emphasis on collected data that is then manipulated to fit the decision A model driven DSS emphasizes maker’s needs. This data can be internal, access to and manipulation of financial, external and in a variety of formats. This optimization and / or simulation models. model emphasizes access to and Simple quantitative models provide the most manipulation of a time series of internal elementary level of functionality. Model- company data and sometimes external driven DSS use limited data and and real time data. Simple file systems parameters provided by decision makers to accessed by query and retrieval tools provide aid decision makers in analyzing a the most elementary level of functionality. situation, but in general large data bases Most data driven DSSs are targeted at are not needed for model-driven DSS. These managers, staff and also product / service are used by managers and staff members suppliers. of a business, or people who interact with the organization, for a number of purposes It is used to query a database or depending on how the model is set up. data warehouse to seek specific answers These DSSs can be deployed via software for specific purposes. It is deployed via a / hardware in stand-alone PCs, main frame system, client server link or via client/server systems or the web(Holsapple web. Document driven DSSs are more & Whinston, 2006). common, targeted at a broad base of user groups. The purpose of such a decision Difference of MIS and DSS support system is to search web pages and find documents on a specific set of MIS and DSS are two abbreviations keywords or search terms. This model that are often heard in the field of Business uses computer storage and processing Management. They differ in a few aspects. technologies to provide document retrieval It is important to know that MIS stands for and analysis. A document driven DSS Management Information Systems whereas model uses documents in a variety of data DSS stands for Decision Support Systems. type such as text documents, spreadsheets It is interesting to note that MIS is a type of and database records to come up with link that assists in the communication decisions and manipulate the information between managers of various disciplines in to refine strategies. The usual technology a business firm or an organization. On the used to set up such decision support whole it plays a very important role in systems are via web or a client / server building up communication among the system. Knowledge driven DSSs are a catch- corporate people. DSS on the other hand is all category covering a broad range of an improvement of the concept of MIS. It is systems covering users within the true that both of them differ in terms of organization setting it up, but may also their focus. DSS focuses more on include others interacting with the . It is all about senior organization. It is essentially used to management in a firm providing innovative provide management advice or to choose vision. On the other hand MIS focuses more products or services. Knowledge-driven DSS on the information gathered and the can suggest or recommend actions to information that has poured from different managers. These DSS are person-computer quarters. Experts on managerial behavior systems with specialized problem-solving say that DSS focuses more on decision expertise. The expertise consists of making. knowledge about a particular domain, understanding of problems within that MIS on the other hand focuses more domain, and skill at solving some of these on planning the report of various topics problems. The typical deployment concerned with the organization that would technology used to set up such systems assist the managers to take vital decisions could be client / server systems, the web, pertaining to the functioning of the organization. One of the finest differences Journal of Management Research and Analysis, January – March 2015;2(1):98-107 102 Ghaffarzadeh S. A. M. Decision Making Based On Management Information System… between MIS and DSS is that MIS focuses Decision - making is the process by on operational efficiency whereas DSS which organizational members choose focuses more on making effective decision specific course of action in response to or in other words helping the company to do threats and opportunities (George and the right thing. Flow of information is from Jones, 1996: 428). Good decision result both sides, up and down in the case of MIS. in courses of actions that help an On the other flow of information is only individual, group or organization to be upward in the case of DSS. In the case of effective, the opposite is its reverse. Every DSS the report can be flexible whereas in organization grows, prospers or fails as a the case of MIS the report is usually not result of decisions made by flexible. MIS is characterized by an input of It is members; and decision according to large volume of data, an output of summary Daft (2001: 399) can be risky and uncertain reports and process characterized by a without any success. Simon (1984), a simple model. On the other hand DSS is leading authority in management decision- featured by an input of low volume of data, making considers that decision making an output of decision analysis and a comprises four principal phases: process characterized by interactive model. Experts would also say that MIS is a - Intelligence- searching the primary level of decision making whereas environment for conditions calling for DSS is the ultimate and the main part of the decision making. decision. This is one of the most talked - Design- inventing, developing and about different between the two. analyzing possible courses of actions. This involves processes to understand As a matter of fact MIS is all about the problem, to generate solutions and theory whereas DSS is all about practice testing of solutions for feasibility. and analysis. An organization should - Choice- selecting an alternative or employ both the systems effectively (Pride course of action from those variables. and Ferrell, 2006). - Review - assessing past choices. This model was later incorporated by Decision - Making George Huber into an expanded model of the entire problem-solving process (see figure 4).

Figure 4: process of Decision - Making (Renolds, 2003, ppt65)

Types of Decisions alternatives. A somewhat more sophisticated view includes the process of constructing the A simple view of decision making is alternatives (i.e., give a problem statement, that it is a problem of choice among several developing a list of choice options). A Journal of Management Research and Analysis, January – March 2015;2(1):98-107 103 Ghaffarzadeh S. A. M. Decision Making Based On Management Information System… complete picture includes a search for product, personnel appointments, opportunities for decisions (i.e., discovering etcetera. Whether decision is of the that there is a decision to be made). A programmed or non-programmed type, manager of company may face a choice in it depends hugely on inputs from which the options are clear (e.g., the choice management information systems. of a supplier from among a existing suppliers). She may also face a problem for Having good decision choices which she designs creative decision options guarantees viable decision in organizations (e.g., how to market a new product so that (Vital and Shivraj, 2008; and Jawadekar, the ports are maximized). Finally, she may 2006). Rhodes (2010) avers that MIS gives work in a less reactive fashion and view managers quick access to information. This decision problems as opportunities that can include interaction with other decision have to be discovered by studying the support systems, information inquiries, operations of her company and its cross referencing of external information and surrounding environment (e.g., how can she potential data mining techniques. At other make the production process more evident). instances, MIS also is said to have revolutionized decision-making process There is much anecdotal and some through automated systems, through such empirical evidence that structuring decision systems, managers no longer rely on 24hour problems and identifying creative decision service from workers, instead, machines are alternatives determine the ultimate quality to be programmed to do things, such as of decisions. Decision support systems aim routine decisions, in place of humans mainly at this broadest type of decision (Jarboe, 2005). In his thinking, Adebayo making and in addition to supporting choice, (2007) stressed that MIS provides they aid in modeling and analyzing systems information that is needed for better (such as complete organizations), identifying decision on issues affecting organizations decision opportunities, and structuring regarding humans and material resources. decision problems .Simon (1984) classified Lucey (2005:179) argued MIS supplies decisions into two broad categories information explores alternatives and according to the extent that the process of provides support where the manager takes decision-making can be pre-planned: the decision or the MIS takes the decision itself, especially the routine operational - Programmed Decision: these are decisions. decisions made using standard rules, procedures or quantitative methods. Decision and MIS To make a programmed decision, the decision maker uses a performance Development of information and program, a standard sequence of communication technologies as change behavior that organizational members structures of societies, it also affected task follow routinely whenever they of manager’s making decision. Many encounter a particular type of problem organizations prepare them self for effective or opportunity (George and Jones and efficient use of new information and :429). For example, inventory control communications technologies. Information decisions, machine loading decisions, and communication technology has two scheduling, etcetera. benefits for organization. First, it enables - Non-programmed Decisions: this type organizations and managers to easily if decision deals with unusual or acquire data. This will cause further support exceptional situations. They are the decision making process. Second, the decisions made in response to novel use of information and communication problems and opportunities. This type technology enables organizations to have of decision according to Lucey (2005: better operate in a global competitive 171), is associated with high degree of environment and make effective decision uncertainty, cannot be delegated to low making. Information and communication levels, may involve things, but always technology improve the quality of decision involves people. Examples: merger, making that is crucial factor for acquisitions, launching of new organization. Cause dramatic changes in

Journal of Management Research and Analysis, January – March 2015;2(1):98-107 104 Ghaffarzadeh S. A. M. Decision Making Based On Management Information System… levels of the organization, including organizational leadership and strategy, and According to Obi (2003), MIS is even members behavior. The information useful in the area of decision making as it and communication technology has become can monitor by itself disturbances in a an essential component in the process of system, determine a course of action and decision making in organization and take action to get the system in control. It is managers at all levels increasingly get help also relevant in nonprogrammer decisions as from information and communication it provides support by supplying information technologies (Feizi & Moghadassi, 2012). No for the search, the analysis, the doubt modern information and and the choice and implementation process communication technologies provide the of decision making. Adebayo (2007) stressed field of information . the need for MIS in decision making as it Information and communication technology provides information that is needed for enables collect, analyze and evaluate data better decision making on the issues and transferring them from one point to affecting the organization regarding human another and cause instant access to and material resources(Reddy,2009). information, Reduce costs, Produce better, Carefully, Coordination, Leading time, MIS is an organization – wide effort to improved control and will lead to better provide decision making process services. No doubt, management has been information. The system is a formal a necessity for human since past, If you commitment by executive to make the consider different management activities computer available to all managers. MIS sets can be clearly seen that the essence of the stage for accomplishments in the other all the management activities is making area, which is DSS, the virtual office and decision. knowledge based systems. The main idea behind MIS is to keep a continuous supply Decision making is an integral of information flowing to the management. component of management In each task, Afterwards, by data and information the management is so smart. In determine gathered from MIS, decisions are made organization's , development (Asemi & Safari, 2011). objectives. Organization design, Choice, Assessment and management practices in MIS may be viewed as a mean for all forms, Decision-making are one of the transformation of data, which are used as main fundamental pillars. In a simple information in decision-making processes. definition, decision making is choose a way Figure 1 shows this understanding about between different paths (Alvani, 2012). information as data processed for a definite purpose (Lucey, 1997). MIS and Decision Making Process

Figure 5: MIS and decision making process (Ajayi, 2007, 97)

Journal of Management Research and Analysis, January – March 2015;2(1):98-107 105 Ghaffarzadeh S. A. M. Decision Making Based On Management Information System…

Figure 6: Phases of Decision Making and IS (Ajayi, 2007, 45)

CONCLUSION business choices. MIS as renowned concept, having good decision choices guarantees The role of information in decision viable decisions in our businesses. From the making cannot be overemphasized. Effective above discussion we can say that decision decision making demands accurate, timely support system focus on decision making and relevant information. MIS provides whereas management information system accurate and timely information necessary (MIS) focus on information. In to facilitate the decision-making process and Management information system it works on enable the organizations planning, control, online mode but in decision support system and operational functions to be carried out it works on real time mode. The management effectively. MIS also plays the crucial role of support system supports medium level of providing a wide range of streamlined data but in decision support system it options from which decision-makers are able supports huge volume of data. The to make their preferred choices and this management support system uses low ensures that whatever choices are made by supports of graphics but in decision support decision makers, the outcome, more often system it uses large support of graphics. The than not, becomes positive. management information system focus only on fully structured task or routine for This, as a matter of fact, is the decision but decision support system why many decision makers tend to prefer focuses on structure as well as semi- using MIS tools when making tough structured data. Beside the above

Journal of Management Research and Analysis, January – March 2015;2(1):98-107 106 Ghaffarzadeh S. A. M. Decision Making Based On Management Information System… differences both MIS and DSS are core of an requirement of different levels of information system satisfying the management.

REFERENCES

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