Strategic, Tactical and Operational
a. Strategic Information:
Definition and Explanation:
Senior management to help in the formulation of long term plans uses strategic information. Strategic information may be used to improve the organization's awareness of its environment and its competitive position. It will not be in a great deal of detail, but will cover a wide range of topics. Because much of strategy making is novel and unstructured, formal information have a limited role especially in the processing of information. Such information includes overall profitability, the profitability of different segments of the business, future market prospectus, the availability and cost of raising new funds, total cash need and capital equipment needs.
Characteristics of useful strategic information:
1. Largely External:
Although some external information will always required, the critical and most difficult strategic problems concern the external environment. For example, competitor's performance and actions, economic trends, technology changes, market changes, political factors and so on.
2.Largely Concern With The Future:
Strategic planning is concerned with the medium to long - term future, so trends, forecast, and assessments, are vital. Information on past performance is of secondary importance.
3. Qualitative As Well As Quantitative:
Much strategic planning and decision making requires quantitative information but in additional qualitative options, judgment, insights and observations are often vitally important, especially for political and social factors.
4. Largely Informal:
Systematic information processing has a place in strategic planning but informal information is more effective and sensitive to environmental disturbance. Research has shown that over formal systems at the strategic level make the organization less adaptable and responsive. They involve discussions, chats, telephone calls letters and memoranda.
5. Boundary Free:
Lower level information tends to be confined to a specific functional area or activity. At the strategic level there must be no artificial boundaries and information must be board ranging, aggregated and reflect a holistic view of the organization.
6. Environmental Scanning:
A key difference between strategic management and other levels is the emphasis on the environment. Strategic planning and decision making is essential for understanding the environment and predicating key changes, trends and influences on the organization in the future. The process, by which information is gathered about the environment , whether by formal or informal means, is known as scanning four types of scanning can be identified:
Types of Scanning:
Types of Scanning
||Where the manager explores generally with no specific purpose in mind
||Where the manager, influenced by experience or some trigger, recognizes, certain events or items of information, but need specific search.
||Informal directed scanning
||Where manager actively looks for specific information or information for a specific purpose but in an informal and unstructured fashion.
||Where specially designed procedures or systems seek specific information or information about a specific problems.
Types of Environmental Information:
It has been suggested that there are eight areas into which environmental information may be grouped:
||Economic and financial data
||Growth rates, interests rates, tax, GDP forecast, financing and Banking projection.
||Threats from new products, competitors, substitutes, new pricing and marketing strategies.
||Government polices and influences, industrial and trade polices.
||Implications of recent proposed legislation, legal restraints (chain) on trade/market/products
||Changing attitude, culture, educational standards, buying patterns, and available, of labor.
||Technological changes and developments and their implications for the organization, availability and effectiveness, of equipment, software and expertise.
||Marketing and consumer data analyzed to region and county.
||Materials and energy data
||Availability and likely costs of raw materials and energy.
Sources of Environmental Information:
Of course, much scanning is done outside the organization but internal sources are also important and should not be ignored. The following lists are examples of possible sources of information about the environment.
||The organizational employees
||Contact with customers and suppliers, social contacts, Membership of professional associations, attendance at courses and conferences, all form of professional and industrial contacts.
||The organizational contacts
||Trade and commerce associations, local and central government departments, customers, suppliers, bankers.
||Books, business periodicals and magazines, local and national press, government reports and statistics, annual reports, television, correspondence, Internet.
||Conferences, seminars, committees.
||Consultants, academies, special surveys, market research.
b. Tactical Information:
Tactical or middle level management is the broadest spectrum of management. manager at this level face complexity and uncertainty and require judgment, insight and much interpersonal skill to carry out their tasks. Both formal and informal information flows are essential and there is much less reliance on computer dominated systems, although computer based decision support systems can provide valuable assistance.
In broad terms, tactical information is used by middle management to decide how the resources of the business should be employed, and to monitor how they are being, and have been, employed. Such information includes productivity measurements (output per man or per machine hour) budgetary control or variance analysis reports, cash flow forecasts, profit results, and short terms purchasing requirements within a particular department of the organization.
Types of Tactical Level MIS:
Much of the information used by middle management comes from informal sources and is gathered, assessed, analyzed and judged by the manager personally. In addition, the managers is supported by formal MIS, which are increasingly computer based.
Four types of formal MIS can be identified.
1. Control System:
Control systems monitors and report on the organizations activities. Most of the information used comes from internal sources but key external factors must also be scanned, for example, competitors' actions, raw material prices, new legislation, industrial relation trends, and so on.
2. Data Base Systems:
Data base systems process and store internal and external information in order to provide the organizations memory.
3. Enquiry Systems:
Enquiry systems allow interrogations of database between planned and actual. These may be internal to organizations or commercially available external database, which are often useful as the background of forecasting.
4. Decision Support Systems:
These provide computer - based support for semi - structure decision - making. Facilities include statistical analyses, forecasting, investments, appraisal models and so on.
c. Operational Information:
Definition and Explanation:
Operational management is concerned with the implementation and control of the - to -day activities of the organization. Their activities are highly dependent on formal MIS dealing almost exclusively with internal information. In the payroll office for example, operational information relating to day rate labor will include hour worked each week by each employee, his rat of pay per hour, detail of his deductions, and for the purpose of wages analyses details of the time each man spent on individual job during the weak.
In this example, the information is required weekly, but more urgent operational information, such as the amount of raw materials being input to a production process, may be needed detail, hourly, or in the case of automated production, second by second. Effective and efficient information, processing is essential since monitoring is constant, data volumes are often high in response is needed rapidly, often in real time. At the operational level many decisions are structured and are frequently incorporated into computer. Hence many operational information system are computer based.
Information at the operational level, whether manual or computerized are file processing system. Their inputs are operational transactions and their outputs are reports (for example, a purchases order for material), action documents (for example, what is balance on debtors account?). As mentioned earlier that many operational levels systems are computer based. A major design question, which arises, is the selection of the mode of computer processing. Should this be batch processing or real - time processing.
This selection may be categorized by the following factors:
||On - Line, Real Processing
- Data volume are high.
- There are large files.
- data processing efficacy is important.
- Periodic reporting/action are sufficient to meet operational demands.
- On demand service required: (Hotel reservation, travel agencies, theater booking).
- Short action time span: (Stock exchange transactions, foreign exchange dealing).
- immediate data validation critical: (factory floor data collection).
- Short activity life cycle: (Newspaper distribution, handling of perishables)
Real time processing needs careful design. Being transaction driven the system must be reliable and cope with all contingencies and conditions. Also the system must respond swiftly even under pressure otherwise it well be discredited and cease to make a positive contribution to efficiency.
Characteristics of each of these types of information are summarized in following table:
||Internet and External
||Narrow and well defined
|Level of detail Currency
||Board and aggregated
Aggregated to some extent
||Historical and forecast
|Frequency of use
||Fairly up - to - date
||urgent and up - to - date