Strategic, Tactical and Operational 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.

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.

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.

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.

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.

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.

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:

It has been suggested that there are eight areas into which environmental information may be grouped:

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.

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.

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.

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.

Data base systems process and store internal and external information in order to provide the organizations memory.

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.

These provide computer - based support for semi - structure decision - making. Facilities include statistical analyses, forecasting, investments, appraisal models and so on.

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.

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:

Characteristics	Strategic Level	Tactical level	Operational level
Source	Largely External	Internet and External	Largely Internal
Scope	Very wide	Intermediate	Narrow and well defined
Level of detail Currency	Board and aggregated	Aggregated to some extent	Detail
Timeliness	Historical and forecast	Recent	Very recent
Frequency of use	Nut urgent	Fairly up - to - date	urgent and up - to - date
Required Accuracy	Infrequent	Regular (monthly/weekly)	Frequently (daily/hourly)
	low	Fairly accurate	High accurate

 

Relevant Articles: What Is Information Types Of Resources Why Information is Managed? Functions of Information: Characteristics of Information Social Characteristics of Information Qualitative Information and Quantitative Information Primary Information and Secondary Information Formal and Informal Information Strategic, Tactical, and Operational Information Planning Control and Operating Information Future Present and Past Information External and Internal Information