3.1 Levels of Decision Making

Question 1

What are the 3 levels of decision making?

Answer 1

Executive / Strategic
Tactical / Managerial
Operational

Question 2

What are the factors that influence the decision taken at each of these levels

Answer 2

Different characteristics
Requirement of different data
Level of risk carried

Question 3

Describe the top level of decision making

Answer 3

Executive

Strategic decisions are made
Supported by Decision Support Systems (DSS)
Information is received from managerial and operational levels in a consolidated format showing only high level statistics and financial information

Question 4

Describe the middle level of decision making

Answer 4

Tactical / Managerial

Medium term planning - project management, staffing levels, team leadership
Greater level of detail than executive level
Short time frame - 6 to 18 months
Data drawn equally from internal & external sources
Risk is less than executive as it affects fewer resources
Awareness of current and future skills that exist within organisation and are available externally to ensure productive workforce

Question 5

Describe the bottom level of decision making?

Answer 5

Operational

Affects day to day running of individual activities within organisation
Based on set of rules that worker follows and requires little thought / individual initiative
Data drawn from internal sources
Risk is very low
Operational end of business - (1) sales - stock control, pricing, special offers, customer records, marketing data
(2) ways to increase turnover, goods available, arrange deliveries, ensure payment is made and customer accounts updated

Question 6

How are decisions made?

Answer 6

Any decisions which involve Information Systems, need to consider IS management as well as procurement