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Published in the Russian Federation
European Researcher
H as been issued since 20 10 . ISSN 2219-8 229
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Vol. 93, Is. 4, pp. 260 -269, 20 15
DOI: 10 .1318 7/ er.20 15.93.260 www.erjournal.ru
Econom ic sciences
Экономические науки
UDC 33
D e cis io n Ma kin g Ba s e d On Ma n a ge m e n t In fo rm a tio n S ys te m a n d D e c is io n S u p p o rt S ys te m
1 Şükrü Ada
2 Mohsen Ghaffarzadeh
1-2 Ataturk University, Turkey 1 Associate Professor
E-m ail: sukruada@atauni.edu 2 PhD student
E-m ail: ghaffarzadeh.1361@gnail.co
Abs tra c t
Inform ation has becom e an essentialresource for m anaging m odern organizations. This is so because today’s business environm ent is volatile, dynam ic, turbulent and necessitates the burgeoning dem and for accurate, relevant, com plete,tim ely and econom ical inform ation needed to drive the decision-m aking process in order to accentuate organizational abilities to m anage opportunities and threat. MIS work on online m ode with an average processing speed. Generally, it is used by low level m an agem ent. Decision support system are powerful tool that assist corporate executives, adm inistrators and other senior officials in m aking decision regarding the problem . Managem ent Inform ation System s is a useful tool that provided organized and sum m arized inform ation in a proper tim e to decision m akers and enable m aking accurate decision for m anagers in organizations. This paper will discuss the concept, characteristics, types of MIS, the MIS m odel, and in particular it will highlight the im pact and role of MIS on decision m aking.
Ke yw o rd s : m anagem ent inform ation system s; decision support system s; decision-m aking.
In tro d u ctio n
Num ber of authors has discussed the role of inform ation system in decision m aking, Kostetsky was one of the first authors who wrote about the relationship between inform ation system s, system analyst and decision m aking in 1966. Managem ent inform ation system provides knowledge about the relative position of the organization and basic forces at work. It provides the right inform ation needed in decision m aking process and help the organizations control, planning and operational functions to be carried out effectively (Leonard, 20 0 8 ). Furtherm ore, Ajayi I.A. and Om irin, Fadekem investigated the use of m anagem ent inform ation system s in decision-m aking on long-term planning, short-term planning and budgeting in the South-West Nigerian
Universities. A stratified random sam pling technique was used to collect data and conclude that that there was a significant difference in the use of MIS for decision m aking on budgeting between Federal and State universities in favor of the Federal universities. The authors recom m end that the MIS units should be adequately financed and m aintained to ensure a free flow of inform ation and adequate use of MIS in decision-m aking on short-term and long-term planning as well as budgeting. Ali Safari and Asefeh Asem i have discussed two m ain inform ation system s, nam ely, MIS and DSS, its characteristics, relations, and connections of each concept to decision-m aking process. Srinivas Nowduri has the sam e consum ption about the relationship between MIS and decision m aking. Decision m aking process and its im pact on top level m anagem ent in a business organization was explained also with an em phasis on autom ated decision m aking. The study found that the dynam ic nature of MIS m akes it difficult for som e organizations to keep up with the principles, strategies, propositions or even ideas. Barry Chris, provide added a new conceptual fram ework for decision m aking and inform ation system s developm ent, sam e as another authors who analyzed the role of MIS in decision m aking. A fram ework was developed, com bining an analysis of decision m aking within the system s developm ent life cycle, key m odels of decision-m aking and the actors involved in the process of systedecision-m s developdecision-m ent. Barry Chris concludes that a deeper understanding of differing viewpoints on system s developm ent held by actors and other phenom ena can be illustrated with the fram ework. George H uber also draws a theory of effects of advanced inform ation technologies on organizational design, intelligent and decision m aking, the theory studied the effects that com puter- assisted com m unication and decision aiding technologies have on organizational design and decision m aking. H um ber focuses on technology that affects the quality and tim elines of decision m aking from one side and from the other side has prom pted changes in organizational design. On the other hand Felix Alvarado in his study "Com plem entary uses of Inform ation System s in Decision Making, Planning and Dem ocracy: An Exam ple in the Education Sector" describes the ongoing im plem entation of web intelligence tools in public education and other policy sectors in Guatem ala. Software tools were developed for use in business was adopted for planning and decision m aking in public institutions. The study sum m arizes the salient aspects of the experience so far of im plem enting and expanding what has been called the “Platform for Integrated Social Inform ation,” It discusses the issues this Platform raises as a resource for im proved public decision m aking, policy analysis and especially, as a prom ising but challenging tool for dem ocracy in the education sector. H owever, the world health organization has introduced a report by who study group it was about the role of research and inform ation system s in decision m aking for the developm ent of hum an resource for health, the study identified a num ber of problem s and noted causes of these problem s such as inefficient data definition and, lack of relevant inform ation and poor coordination of available inform ation on the other hand the study identified a positive factors that prom pt decision m aking such as problem awareness and easy availability of presented inform ation. The study group em phasized that strengthening decision m aking in the developm ent of hum an resource of health, by linking inform ation and research to decision m aking and prom pting relevant inform ation requires a coordinated approach.
In fo rm a tio n Sys te m
Inform ation system are constantly changing and evolving as technology continue to grow .Basically we have m an y types of inform ation system like m anagem ent inform ation system , decision support System , transaction processing system , expert system . But we discuss m anagem ent inform ation system and decision support system . In Managem ent inform ation
system these system assist lower level m anagem ent in problem solving and m aking decision (Manian, 20 11). They use the result of transaction processing and som e other inform ation also. It is
a set of inform ation processing functions. It should handle queries as quilt as they arrive. An im portant elem ent of m anagem ent inform ation system is database. In decision support system , they assist higher m anagem ent to m ake long term decisions. These types of system s handle unstructured or sem i structured decision .A decision is considered unstructured if there are no clear procedure for m aking the decision and if not all the factor to be considered in the decision can be readily identified in advance. The decision support system these are not of recurring nature. Som e recur infrequently or occur only once. A decision support system m ust very flexible. The user should be able to produce custom ized reports by giving particular data and form at specific to
particular situations. There are different views in determ ining the types of inform ation system s and their classifications. But in m ost categories, with titles such as: (Laudon and Laudon, 20 0 9)
Tra n s a ctio n P ro c e s s in g S ys te m ( TPS )
This is also referred to as data processing system . It perform s the essential role of collecting and processing the daily transactions of the organization. They serve at operational levels of the organization. Exam ples of transactions include purchase payroll, reservation, invoices, paym ents, shipping, registrations, orders and sales.
Exp e rt Sys te m ( Sp e c ia lis t) ( ES )
This is an extension of the decision support system . It is a program m ed decision-m aking inform ation system that captures and reproduces the knowledge and expertise of experts and then sim ulates the thinking or actions of that expert to help users with less expertise. These applications are im plem ented with Artificial Intelligence (AI) technology. Artificial intelligence is a com puter-based technology that has the ability to behave like hum ans, learn languages and em ulate hum an expertise and decision-m aking.
Offic e Au to m atio n S ys te m ( OAS )
This system supports a wide range of business activities. Office system s are applications designed to im prove workflow and com m unicate am ong workers regardless of their physical locations. Typical office system handles and m anages docum ent (through word processing, desktop publishing, docum ent im aging and digital filings), scheduling (through electronic calendars) and com m unication (through electronic m ail, voice m ail and video conferencing).
P e rs o n a l a n d W o rk Gro u p In fo rm a tio n S ys te m s ( W GSS )
Personal inform ation system is the system designed to m eet the needs of a single user while work group system is designed to m eet the needs of a workgroup and to increase the productivity of the group.
Ma n a ge m e n t In fo rm a tio n S ys te m ( MIS )
The Managem ent Inform ation System (MIS) is a concept of the last decade or two. It has been understood and described in a num ber ways. It is also known as the Inform ation System , the Inform ation and Decision System , the Com puter- based inform ation System (Davis & Geist, 20 0 4). Definition of Managem ent Inform ation System s: The MIS is defined as a system which provides inform ation support for decision m aking in the organization (Barton & Parolin, 20 0 5). The MIS is defined as an integrated system of m an and m achine for providing the inform ation to support the operations, the m anagem ent and the decision m aking function in the organization (Bendoly, 20 0 8 ). The MIS is defined as a system based on the database of the organization evolved for the purpose of providing inform ation to the people in the organization. The MIS is defined as a Com puter based Inform ation System (Bresfelean, 20 0 9).
Figure 1. Sim ple View of MIS (Kum ar, 20 0 6, 45)
D e cis io n S u p p o rt S ys te m ( D S S )
Decision-m aking is an essential com ponent of organizational life. Decision m akers receive and analysis inform ation using m any different m edia, including traditional print, group and interpersonal inform ation exchanges and com puter-based tools Decision support system s (DSS) is a generic concept that describes inform ation system s that provide analytical m odelling and inform ation to support sem i-structured and unstructured organizational decision m aking. Com m on characteristics of DSS include:
-Problem structure, used in sem i-structured and unstructured decision context -Intended to support and augm ent decision m akers not replace them
-Supports m ost phases of decision-m aking process -Uses underlying data and m odel
-Interactive: DSS is designed to be an interactive decision aid
A decision support system (DSS) is an integrated set of com puter tools allowing a decision m aker to interact directly with com puter to retrieve inform ation useful in m aking sem i structured and unstructured decisions (Power, 20 0 2. Ezine, 20 10 . J am es, 1998). The Decision support system are able to help groups to m ake the decision .It should not be responsible for individual decision m aking. The Decision support system is easy to use. A user should not be required to be com puter operator to generate reports. It should be convenient for the user to use DSS (Singh & Sharm a, 20 12).
Figure 2. A Sim ple View of DSS ((Kum ar, 20 0 6, 75)
Figure 3. Types of Inform ation system s and organizational hierarchy (Gabriel, 20 12, 8 9)
Typ e s o f D e c is io n S u p p o rt Sys te m
There are a num ber of decision support system s. These can be categorized into five types: com m unications driven DSS, data driven DSS, docum ent driven DSS, knowledge driven DSS and m odel driven DSS. A com m unication driven DSS supports m ore than one person working on a shared task. Many collaborators work together to com e up with a series of decision to set in m otion a solution or strategy. Most com m unications driven DSSs are targeted at internal team s, including partners. The m ost com m ons technology used to deploy the DSS is a web or a client server. In general, groupware, bulletin boards, audio and video conferencing are the prim ary technologies for com m unication driven decision support. Data driven DSS m odel puts its em phasis on collected data that is then m anipulated to fit the decision m aker’s needs. This data can be internal, external and in a variety of form ats. This m odel em phasizes access to and m anipulation of a tim e series of internal com pany data and som etim es external and real tim e data. Sim ple file system s accessed by query and retrieval tools provide the m ost elem entary level of functionality. Most data driven DSSs are targeted at m anagers, staff and also product / service suppliers. It is used to query a database or data warehouse to seek specific answers for specific purposes. It is deployed via a m ain fram e system , client server link or via web. Docum ent driven DSSs are more comm on, targeted at a broad base of user groups. The purpose of such a decision support system is to search web pages and find docum ents on a specific set of keywords or search term s. This model uses com puter storage and processing technologies to provide docum ent retrieval and analysis. A docum ent driven DSS m odel uses docum ents in a variety of data type such as text docum ents, spreadsheets and database records to com e up with decisions and m anipulate the inform ation to refine strategies. The usual technology used to set up such decision support system s are via web or a client / server system . Knowledge driven DSSs are a catch-all category covering a broad range of system s covering users within the organization setting it up, but m ay also include others interacting with the organization. It is essentially used to provide m anagem ent advice or to choose products or services. Knowledge-driven DSS can suggest or recom m end actions to m anagers. These DSS are person-com puter system s with specialized problem -solving expertise. The expertise consists of knowledge about a particular dom ain, understanding of problem s within that dom ain, and skill at solving som e of these problem s. The typical deploym ent technology used to set up such system s could be client / server system s, the web, or software running on stand-alone PCs. Model driven DSSs are com plex system s that help analyses decisions or choose between different options. A model driven DSS em phasizes access to and m anipulation of financial, optim ization and / or sim ulation m odels. Sim ple quantitative m odels provide the m ost elem entary level of functionality. Model-driven DSS use lim ited data and param eters provided by decision m akers to aid decision m akers in analyzing a situation, but in general large data bases are not needed for m odel-driven DSS. These are used by m anagers and staff m em bers of a business, or people who interact with the organization, for a num ber of purposes depending on how the m odel is set up. These DSSs can be deployed via software / hardware in stand-alone PCs, client/ server system s or the web (Holsapple & Whinston, 20 0 6).
D iffe re n c e o f M IS a n d D S S
MIS and DSS ar e two abbr eviations th at ar e often h eard in th e field of Busin ess Man agem en t. Th ey differ in a few aspects. It is im por tant to kn ow th at MIS stands for Man agem en t In for m ation System s wh er eas DSS stan ds for Decision Support System s. It is in ter estin g to note th at MIS is a type of lin k th at assists in th e com m un ication between m an agers of var ious disciplin es in a busin ess firm or an or gan ization. On th e wh ole it plays a ver y im por tant role in buildin g up com m un ication am ong th e cor por ate people. DSS on th e oth er h an d is an im provem en t of th e concept of MIS. It is true th at both of th em differ in term s of th eir focus. DSS focuses m ore on leadership. It is all about sen ior m an agem en t in a fir m pr oviding in n ovative vision. On th e oth er h an d MIS focuses m or e on th e in form ation gath er ed and the in for m ation th at h as pour ed from differ ent quar ter s. Experts on m an ager ial beh avior say th at DSS focuses m or e on decision m akin g. MIS on th e oth er h and focuses m or e on plan n in g th e r epor t of var ious topics concer n ed with th e or gan ization th at would assist th e m an ager s to take vital decisions pertain ing to th e fun ction ing of th e or gan ization. On e of th e fin est differ ences between MIS an d DSS is th at MIS focuses on oper ation al efficien cy wh er eas DSS focuses m or e on m akin g effective decision or in oth er words h elping th e com pan y to do th e righ t thin g. Flow of in for m ation is from both sides, up an d down in th e case of MIS.
On th e oth er flow of in form ation is on ly upward in th e case of DSS. In th e case of DSS th e r epor t can be flexible wh er eas in th e case of MIS th e r eport is usually n ot flexible. MIS is ch ar acterized by an in put of large volum e of data, an output of sum m ar y r epor ts an d process ch ar acterized by a sim ple m odel. On th e oth er han d DSS is featur ed by an in put of low volum e of data, an output of decision an alysis an d a process ch ar acter ized by in ter active m odel. Experts would also say th at MIS is a pr im ar y level of decision m akin g wh er eas DSS is th e ultim ate and th e m ain part of th e decision . This is on e of th e m ost talked about differen t between th e two. As a m atter of fact MIS is all about th eor y wh er eas DSS is all about pr actice an d an alysis. An organ ization should em ploy both th e system s effectively (Pr ide an d Fer r ell, 20 0 6).
D e cis io n -Ma kin g
Decision-m aking is the process by which organizational m em bers choose specific course of action in response to threats and opportunities (George and J ones, 1996: 428). Good decision result in courses of actions that help an individual, group or organization to be effective, the opposite is its reverse. Every organization grows, prospers or fails as a result of decisions m ade by
It is m em bers; and decision according to Daft (20 0 1: 399) can be risky and uncertain without any success. Sim on (1984), a leading authority in m anagem ent decision- m aking considers that decision m aking com prises four principal phases:
-Intelligence- searching the environm ent for conditions calling for decision m aking.
-Design- inventing, developing and analyzing possible courses of actions. This involves processes to understand the problem , to generate solutions and testing of solutions for feasibility.
-Choice- selecting an alternative or course of action from those variables.
-Review - assessing past choices. This m odel was later incorporated by George H uber into an expanded m odel of the entire problem -solving process (see figure 4).
Figure 4. Process of Decision-Making (Renolds, 20 0 3, ppt 65)
Typ e s o f D e c is io n s
A sim ple view of decision m aking is that it is a problem of choice am ong several alternatives. A som ewhat m ore sophisticated view includes the process of constructing the alternatives (i.e., give a problem statem ent, developing a list of choice options). A com plete picture includes a search for opportunities for decisions (i.e., discovering that there is a decision to be m ade). A m anager of com pany m ay face a choice in which the options are clear (e.g., the choice of a supplier from am ong a existing suppliers). She m ay also face a problem for which she designs creative decision options (e.g., how to m arket a new product so that the ports are m axim ized). Finally, she m ay work in a less reactive fashion and view decision problem s as opportunities that have to be discovered by studying the operations of her com pany and its surrounding environm ent (e.g., how can she m ake the production process m ore evident). There is m uch anecdotal and som e em pirical evidence that
structuring decision problem s and identifying creative decision alternatives determ ine the ultim ate quality of decisions. Decision support system s aim m ainly at this broadest type of decision m aking and in addition to supporting choice, they aid in m odeling and analyzing system s (such as com plete organizations), identifying decision opportunities, and structuring decision problem s. Sim on (198 4) classified decisions into two broad categories according to the extent that the process of decision-m aking can be pre-planned:
-Program m ed Decision: these are decisions m ade using standard rules, procedures or quantitative m ethods. To m ake a program m ed decision, the decision m aker uses a perform ance program , a standard sequence of behavior that organizational m em bers follow routinely whenever they encounter a particular type of problem or opportunity (George and J ones :429). For exam ple, inventory control decisions, m achine loading decisions, scheduling, etcetera.
-Non-program m ed Decisions: this type if decision deals with unusual or exceptional situations. They are decisions m ade in response to novel problem s and opportunities. This type of decision according to Lucey (20 0 5: 171), is associated with high degree of uncertainty, cannot be delegated to low levels, m ay involve things, but always involves people. Exam ples: m erger, acquisitions, launching of new product, personnel appointm ents, etcetera. Whether decision is of the program m ed or non-program m ed type, it depends hugely on inputs from m anagem ent inform ation system s.
H aving good decision choices guarantees viable decision in organizations (Vital and Shivraj, 20 0 8 ; and J awadekar, 20 0 6). Rhodes (20 10 ) avers that MIS gives m anagers quick access to inform ation. This can include interaction with other decision support system s, inform ation inquiries, cross referencing of external inform ation and potential data m ining techniques. At other instances, MIS also is said to have revolutionized decision-m aking process through autom ated system s, through such system s, m anagers no longer rely on 24hour service from workers, instead, m achines are to be program m ed to do things, such as routine decisions, in place of hum ans (J arboe, 20 0 5). In his thinking, Adebayo (20 0 7) stressed that MIS provides inform ation that is needed for better decision on issues affecting organizations regarding hum ans and m aterial resources. Lucey (20 0 5:179) argued MIS supplies inform ation explores alternatives and provides support where the m anager takes the decision or the MIS takes the decision itself, especially the routine operational decisions.
D e cis io n a n d MIS
Developm ent of inform ation and com m unication technologies as change structures of societies, it also affected task of m anager’s m aking decision. Many organizations prepare them self for effective and efficient use of new inform ation and com m unications technologies. Inform ation and com m unication technology has two benefits for organization. First, it enables organizations and m anagers to easily acquire data. This will cause further support the decision m aking process. Second, the use of inform ation and com m unication technology enables organizations to have better operate in a global com petitive environm ent and m ake effective decision m aking. Inform ation and com m unication technology im prove the quality of decision m aking that is crucial factor for organization. Cause dram atic changes in levels of the organization, including organizational leadership and strategy, and even m em bers behavior. The inform ation and com m unication technology has becom e an essential com ponent in the process of decision m aking in organization and m anagers at all levels increasingly get help from inform ation and com m unication technologies (Feizi & Moghadassi, 20 12). No doubt m odern inform ation and com m unication technologies provide the field of inform ation m anagem ent system . Inform ation and com m unication technology enables collect, analyze and evaluate data and transferring them from one point to another and cause instant access to inform ation, Reduce costs, Produce better, Carefully, Coordination, Leading tim e, im proved control and will lead to better services. No doubt, m anagem ent has been a necessity for hum an since past, If you consider different m anagem ent activities can be clearly seen that the essence of all the m anagem ent activities is m aking decision. Decision m aking is an integral com ponent of m anagem ent. In each task, the m anagem ent is so sm art. In determ ine organization's policies, developm ent objectives. Organization design, Choice, Assessm ent and m anagem ent practices in all form s, Decision-m aking are one of the m ain fundam ental pillars. In a sim ple definition, decision m aking is choose a way between different paths (Alvani, 20 12).
MIS a n d D e cis io n Makin g P ro ce s s
According to Obi (20 0 3), MIS is useful in the area of decision m aking as it can m onitor by itself disturbances in a system , determ ine a course of action and take action to get the system in control. It is also relevant in nonprogram m er decisions as it provides support by supplying inform ation for the search, the analysis, the evaluation and the choice and im plem entation process of decision m aking. Adebayo (20 0 7) stressed the need for MIS in decision m aking as it provides inform ation that is needed for better decision m aking on the issues affecting the organization regarding hum an and m aterial resources(Reddy,20 0 9).
MIS is an organization – wide effort to provide decision m aking process inform ation. The system is a form al com m itm ent by executive to m ake the com puter available to all m anagers. MIS sets the stage for accom plishm ents in the other area, which is DSS, the virtual office and knowledge based system s. The m ain idea behind MIS is to keep a continuous supply of inform ation flowing to the m anagem ent. Afterwards, by data and inform ation gathered from MIS, decisions are m ade (Asem i & Safari, 20 11).
MIS m ay be viewed as a m ean for transform ation of data, which are used as inform ation in decision-m aking processes. Figure 1 shows this understanding about inform ation as data processed for a definite purpose (Lucey, 1997).
Figure 5. MIS and decision m aking process (Ajayi, 20 0 7, 97)
Figure 6. Phases of Decision Making and IS (Ajayi, 20 0 7, 45)
Co n c lu s io n
The role of inform ation in decision m aking cannot be overem phasized. Effective decision m aking dem ands accurate, tim ely and relevant inform ation. MIS provides accurate and tim ely inform ation necessary to facilitate the decision-m aking process and enable the organizations planning, control, and operational functions to be carried out effectively. MIS also plays the crucial
role of providing a wide range of stream lined options from which decision-m akers are able to m ake their preferred choices and this ensures that whatever choices are m ade by decision m akers, the outcom e, m ore often than not, becom es positive. This, as a m atter of fact, is the reason why m any decision m akers tend to prefer using MIS tools when m aking tough business choices. MIS as renowned concept, having good decision choices guarantees viable decisions in our businesses. From the above discussion we can say that decision support system focus on decision m aking whereas m anagem ent inform ation system (MIS) focus on inform ation. In Managem ent inform ation system it works on online m ode but in decision support system it works on real tim e m ode. The m anagem ent support system supports m edium level of data but in decision support system it supports huge volum e of data. The m anagem ent support system uses low supports of graphics but in decision support system it uses large support of graphics. The m anagem ent inform ation system focus only on fully structured task or routine for decision but decision support system focuses on structure as well as sem i-structured data. Beside the above differences both MIS and DSS are core of an inform ation system satisfying the requirem ent of different levels of m anagem ent.
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