What is Decision Making? Explain, with Examples, The Design of Information Systems That Support Structured Decision-making. Critically Discuss The Limitations of This Approach to is Design

A decision can be defined as a rational selection amongst alternatives. While management is seen as being responsible for making the more important decisions, every employee has to make decisions specific to his or her roles. Decision making can be divided into strategic decision making, management control decisions and operational control decisions. These three decisions are made by different levels of people in an organisation.

What is decision making? Explain, with examples, the design of information systems that support structured decision-making. Critically discuss the limitations of this approach to IS design. 


A decision can be defined as a rational selection amongst alternatives. While management is seen as being responsible for making the more important decisions, every employee has to make decisions specific to his or her roles. Decision making can be divided into strategic decision making, management control decisions and operational control decisions. These three decisions are made by different levels of people in an organisation.

Structured decisions are mostly made by the operational staff in any organisation. Operational staff are low level decision makers and theses decisions have lower risk of errors because in structured decisions, both the problem and solution are known. A design of information system that support structured decision making is the transaction processing system (TPS) produced using the decision making model (DMM).

TPS represents a class of information systems that support structured decision-making in an organisation. It keeps track of elementary activities and transactions like sales receipts, cash deposits, payrolls, etc. An organisation can have several different TPS. TPS collects, stores, modifies, and retrieves the transactions of an organisation. A transaction is an event that generates or modifies data that is eventually stored in an information system. To be considered a TPS, the system must pass the ACID test.

The ACID tests comprises of 4 components – atomicity, consistency, isolation and durability. Atomicity means that transactions must be completed in full or not at all. Each transaction is said to be atomic. If one part of the transaction fails, the entire transaction fails and the database state is left unchanged. Consistency ensures that any transaction the database performs will take it from one consistent state to another. Isolation refers to the requirement that no transaction should be able to interfere with another transaction at all. Basically, each transaction must be done independent of other transactions. Durability means that once transactions are completed, they cannot be undone.

There are two types of TPS – batch processing system and real time processing system. For batch processing systems, transactions are stored for processing at a later, pre-defined time. Examples would be payroll systems, billing systems, etc. On the other hand, real time processing systems have their transactions immediately processed and central databases are updated. Examples would be ATM, airline reservation systems, etc.

However, there are limitations to the DMM. The design limitation is that it is not possible to fully automate decision making for all decision. Unstructured problems still remain largely unprogrammable and this is the design limitation of the DMM. The implementation limitation is that the DMM ignores behavioural uncertainty (e.g. opportunism) that might affect the usage of the information system. Moreover, humans are still needed to manage exceptions, even for structured decisions.

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