Page 23 - DCAP208_Management Support Systems

Management Support Systems

Notes tasks that keep your business running. Decision making can’t wait for a schedule. In this unit, we
will discuss the concept of decision making.

2.1 Decision Making

Decision making is the act of choosing between two or more courses of action. However, it must
always be remembered that there may not always be a correct decision among the available
choices. There may have been a better choice that had not been considered, or the right information
may not have been available at the time. Because of this, it is important to keep a record of all
decisions and the reasons why decisions were made, so that improvements can be made in the
future. This also provides justification for any decision taken when something goes wrong. Hindsight
might not be able to correct past mistakes, but it will aid improved decision making in the future.

Decision making is a complex situation. To resolve the complexity, the decisions are classified
as programmed and non-programmed decisions. If a decision can be based on a rule, method or
even guidelines, it is called the programmed decision. If the stock level of an item is 200 numbers,
then the decision to raise a purchase requisition for 400 numbers is a programmed-decision-
making situation. The decision maker here is told to make a decision based on the instructions
or on the rule of ordering a quantity of 400 items when its stock level reaches 200.
If such rules can be developed wherever possible, then the MIS itself can be designed to make a
decision and even execute.
The system in such cases plays the role of a decision maker based on a given rule or a method.
Since the programmed decision is made through MIS, the effectiveness of the rule can be analyzed
and the rule can be revived and modified from time to time for an improvement. The programmed
decision making can be delegated to a lower level in the management cadre.
A decision which cannot be made by using a rule or a model is the non-programmed decision.
Such decisions are infrequent but the stakes are usually larger. Therefore, they cannot be delegated
to the lower level.

Notes The MIS in the non-programmed-decision situation can help to some extent, in
identifying the problem, giving the relevant information to handle the specific decision
making situation. The MIS, in other words, can develop decision support systems in the
non-programmed decision making situations.

Self Assessment

Fill in the blanks:

1. ...................... is the act of choosing between two or more courses of action.
2. If a decision can be based on a rule, method or even guidelines, it is called the ......................
decision.

3. A decision which cannot be made by using a rule or a model is the ...................... decision.

2.2 Definitions of Decision Making

According to James Stoner:
“Decision making is the process of identifying and selecting a course of action to solve a specific
problem.”

16 LOVELY PROFESSIONAL UNIVERSITY