Question

'An organisation is a collection of interdependent decision-making units that exists to pursue organisational objectives'. In the light of this statement, explain the relationship between information and decisions. Also explain the role of Transaction Processing System in facilitating the decision-making process in business organisations.

Answer 1

An organisation comprises of different types of units involved in decision making. Every department takes individual decisions to achieve the desired shared objectives of organisation. An organisation needs to draft plans, set common target and devise policies. All such activities are based on the information (data) which is derived from past experience and anticipating future conditions. On the basis of such information an administration assigns resources and works towards achieving targets. Therefore, it can be said that information helps in decision making, and previously taken decisions creates a source of information in future.

Transaction processing systems are an important part of business operations. They are involved in processing of transactions of a business. The different processes involved are:

1. Collecting Data: The role of TPS is to collect data which may be in the form of manual entry, point of sale machines and scanners.
2. Editing Data: Checking the data for the correctness, accuracy
3. Validation of Data: Verifying data and rectifying errors if detected.
4. Manipulating Data: Processing and analysing of data based on pre-designated design.
5. Storage of Data: The process of storing of data so that it can be accessed anytime.
6. Report Generation: This involves creating reports and presenting data in a designated format which can either be hardcopy or softcopy.
7. Query Support: It refers to users of TPS who can raise a query and extract the same data to get meaningful report.