Role of Decision Support System For Decision-Making Process in Global Business Environment

Decision Support System:

A decision support system is an integrated set of computer tools that allow a decision maker to interact directly with the computer to retrieve information useful for making semi-structured and unstructured decisions. Examples of these decisions include things like merger and acquisition decisions, plant expansion, portfolio management of new products and marketing decisions.

Decision making is a basic management activity. It can be conceptualized as consisting of four stages: intelligence, design, choice and implementation.

Important aspects of the decision support system:

1) The most important consideration is the ease of decision support system – its ability to allow non-technical people to deal with it directly. The biggest and most persistent problem with computers has been their flexibility, their inability to let the person who actually needs the data deal directly with the computer.

2) The ability to access information should not be limited to only part of an organization or only to specific management or professional groups. Instead, the resource should be distributed to all people and part of an organization that needs it without wide access; the power of the Advanced Distributed Processing System will be untapped, as they typically have done in the past.

3) The ideal decision support system in sharp contrast to previous application design method should not be a ‘system’ in the strict sense at all. Rather, it should be a highly adaptable decision support generator that can easily be used by professionals to quickly design data support protocols to suit each decision-making process. This adaptive tool should allow rapid design changes if the original design does not exactly match a person’s information gathering style or needs.

4) In order to adequately support the human element, this highly adaptive support capability must be able to provide access to operational data and as well as to summary data already processed by application programs designed for other specific operational tasks. Equally important, this tool should give the professional access to an organization’s raw data, and it should allow access to be performed in one step using a single uncomplicated procedure or command and without having to re-enter non-summary data.

5) The organizations need to access original data sometimes because efficiency is related to how well the original data is organized in the system; The decision support generator must be able to interface with a real DBMS. It should also be able to access standard ‘flat’ files indirectly using the host computer’s power to facilitate both the user interface and data access without changing existing files.

6) The decision support generator should let the user decide whether to display information on the CRT screen for immediate use or to print it for later use. The best way to achieve such a flexible data presentation is through a workstation. The workstation for management or professional information would include a keyboard, screen and interface for a printer that could print anything from straight text to graphics such as pie charts, bar charts and line charts.

7) The support tool must interface with several different systems and functions, it must be compatible with all of them, the tool should provide users with a single easily used language to access to manipulate and present data in a way that best supports the end user.

8) To facilitate formatting and manipulation of displayed data, the decision support generator should ideally be able to interface with word processing software. With this capability, DSS becomes the critical link between data processing and office automation, integrating both functions into an easily used, straightforward, extremely powerful system.

Characteristics of decision making in the global business environment:

Business strategy / decision making characteristics

Multinational: (decentralized federation) Resolution on decentralization to subsidiaries, informal relationship between head office and subsidiaries

International: (Coordinated Federation) More vital decision and knowledge generally developed at headquarters and transferred to subsidiaries

Globally: (centralized federation) Decisions made at the center of knowledge developed and retained at the center

Transnational: (integrated network) Decision making and knowledge generation by units

Managers and decision support system:

A daily leader of a leader, like hundreds of short activities of great variety, requiring rapid attention shift from one question to another, very often initiated by new problems. A manager maintains a complex web of contacts outside and inside the organization. A successful manager is not flooded with attacks on these activities: he or she maintains a personal agenda. Effective managers, as such, secrete their own informal structure within the corporate structure, and they use this network to stay informed and influence others. It has been noted that the proactive leader makes a special effort to develop a long-term vision and a long-term agenda.

The need for types of information produced by the decision support system has always been present. Decision support systems have become primarily popular because of their ability to meet this need. Today, the availability of computer hardware, the advent of the database management system in the 1970s provided means for storing and managing large amounts of data, a large increase in the number of software packages containing the features of a decision support system. Finally, many MBAs that were trained in analytical techniques now reach the middle and upper tier of companies. These individuals know how to use the tools provided by the decision support system. So, in most of the organization, executives used the computer-based computing applications. This leads to developing the decision support system in business.

A broad view of perception is that modern decision making is a very structured process. According to this view, management makes decisions by collecting and analyzing all relevant information, reviewing all possible alternatives, and then calmly and rationally choosing the course of action that provides maximum benefits with minimal risk.

Managers play three types of roles in the performance of their functions. Interpersonal roles are mainly based on personal interactions; in some cases computer controlled communication media may be used. Information and decision-making roles are supported by various information systems that make information accessible, assist in decision-making and act as a means of communication.

All leadership roles have an element of decision making: the decision-making roles are the ones where this is the crucial aspect. The manager gathers the resources in a new way. Decision support system helps an entrepreneur to consider options, choose one and plan for its implementation. Managing disruptions is part of management control. Resource allocation is the essence of planning and decision support systems have become indispensable in many organizations for their purposes.

The leader is a problem solver and the basic activity of problem solving is decision making. Decision making is the process of identifying a problem, developing an alternative solution, and selecting and implementing one of them. An experienced manager recognizes a problem similar to what he or she has already encountered. The intuitive understanding of a problem often relies on such an ability to establish an analogy. The system’s approach to problem solving helps manage complexity.

Decision support system in the organizational environment:

Organizations that have been the most successful in implementing DSS have much in common. They have a well-established, well-controlled and well-structured data processing system that provides transaction processing data needed for DSS. Such organizations have spent the extra money and staff needed to maintain a research and development focus. All departments in the organization have communicated with key computer groups. Entire departments have sufficient confidence to initiate and manage system projects. The central computer groups have several employees who either came from all other departments. Educational and training programs are used by the organizations to build mutual understanding between departments and the computer group.

Features offered by DSS:

1) Support decision making in poorly structured situations where, due to the lack of structure, the problem is not suitable for full computerization and yet requires computer assistance to access and process large volumes of data.

2) Help quickly get the volume results needed to reach the decision.

3) Use the ad hoc mode to fit the user’s current needs, as opposed to operating in a generally planned manner, as the management reporting system does.

4) Support different stages of decision making.

5) Promote high quality decision making by encouraging decisions based on the integration of available information and human judgment.

6) Offer flexibility as opposed to a predetermined usage pattern – making it easy to accommodate the individual decision-making style.

7) Facilitates the implementation of decisions that often intersect across departmental boundaries.

8) Support group decision, especially through Group DSS (GDSS).

9) Give managers the opportunity to gain a better understanding of their business by developing and working with models.

conclusion:

With the last several years, `computers have been increasingly used in areas such as financial management, production analysis, short-term planning and geographical analysis. In today’s business world, computers are used for decision making as a decision support system. Decision support systems are types of management information system whose main goal is to support a human decision maker during the decision making process. The strength of DSS lies in supporting decision making in situations where both human judgment and the power of the computer are required. DSS primarily supports strategic, tactical and operational planning.

Properly designed and integrated, DSS becomes a very powerful support tool that increases the productivity of professionals at all organizational levels in all departments. It can effectively expand the organization’s current staff by reducing its workload and thereby increasing productivity. And with modern technology and advanced software tools, it can bring us even closer to bridging the chasms and operations reaching the worlds. These features can offer today’s organizations that are more pressured than ever before to maximize efficiency while reducing costs with unprecedented benefits in utilizing and managing both their human and computer resources.

reference:

1) “Management Information System” by Viladimir Zwass

2) “The Nature of Organizational Decision Making and Design of Decision Support System” by George .P Huber.

3) “Introduction to Business Data Processing” by Lawrence S. Orillia

4) “Management Information System” by James O. Hicks JR