Decision making can be classified as either structured or unstructured. Why is top level management more associated with unstructured decisions, while the lower level has more contact with structured decisions?
Top Management
The top level of management deals with decisions that are the broadest in scope and cover the widest time frame. Typical titles of managers at this level are chief executive officer (CEO), chief operating officer (COO), chief financial officer (CFO), treasurer, controller, chief information officer (CIO), executive vice president, and senior partner. Top managers include only a few powerful people which are in charge of the four basic functions of a business-marketing, accounting and finance, production, and research and development. Decisions made at this level are unpredictable, long range, and related to the future, not just past and/or current activities. Therefore, they demand the most experience and judgment. Examples of unstructured decisions include deciding five year goals for the company, evaluating future financial resources, and deciding how to react to the actions of competitors.
Lower management
The largest level of management, lower (operational) management, deals mostly with decisions that cover a relatively narrow time frame. Lower management, also called supervisory management, actualizes the plans of middle management and controls daily operations-the day to day activities that keep the organization humming. Most decisions at this level require easily defined information about current status and activities within the basic business functions-for example, the information needed to decide. This information is generally given in detail reports that contain specific information about routine activities. These reports are structured, so their form can usually be predetermined. Daily business operations data is readily available, and its processing can be easily computerized. Managers at this level typically make structured decisions. A structured decision is a predictable decision that can be made by following a well defined set of predetermined, routine procedures.
DSSs include knowledge-based systems. A properly designed DSS is an interactive software-based system intended to help decision makers compile useful information from a combination of raw data, documents, personal knowledge, or business models to identify and solve problems and make decisions.
· WWhy information must be managed properly by the levels of management?
Information is needed for decision making at all levels of management.
Managers at different organizational levels make different types of decisions, control different types of processes, and have different information needs.
Three classical levels of management include:
o Strategic (top management)
It entails specifying the organization's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs.
o Tactical (middle management)
Middle, or tatical, managers receive strategic decisions from above as general directives. Using those directives as guidelines, they develop tatics to meet those strategic directives. That is, they make decisions concerning how and when specific resources will be utilized. Usually, a middle manager will be responsible for several operational managers.
o Operational (lower management)
Operational managers are responsible for daily operations. They make decisions concerning a narrow time span about the deployment of small groups of clerical and/or shop floor workers.
· InInformation needed by the manager must have a value that is: up to date, detailed and accurate. Try to explain the purpose of these points and give examples of your answers!
o Accurate (information which is reasonably determined to be factually correct)
o Up To Date ( reflecting the latest information or changes)
o Detail (true information including all the facts)
· TTry to describe what information is needed by the managerial level in carrying out its functions in terms of planning, organizing and controlling
o Planning
The planning function establishes goals and objectives to pursue during a future period. It spans all levels of management. Top managers are involved in strategic planning that sets board, long-range goals for an organization. These goals become the basis for short-range, annual operational planning; during which top and middle managers determine specific departmental objectives that will help the organization makes progress toward the broader, long-range goals.
Ex: General Manager determines the objectives, policies and plans of the hotel.
o Organizing
Organizing is management’s plan for obtaining the objectives of the establishment throught the arrangement of position, job tasks and people.
Ex: HOD analyzes job description and set the tasks for each position.
o Controlling
The process of control is to measure progress, compare it with plans or standards and take corrective action.
Ex: Front office supervisor supervises all front desk procedures (reservation, reception, operator, etc) set by the higher management.
A system is a collection of elements or components that are organized for a common purpose. It has 10 characteristics :
