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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 buseness organisations.

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Solution

An organisation consists of various interdependent decision making units at every level of management and department. All these separate departments take decisions for their respective fields to achieve the desired common organisational objectives. The organisation as a whole needs to set its targets, draft plans and formulate various policies. These activities are based on the information (in form of data) regarding the past experiences and expected future conditions. It is on the basis of this information that an organisation allocates its resources and attempts to accomplish its determined targets. Thus, it can be said that on one hand, information facilitates the decision making process while on the other hand, decisions took in the past acts as a pool of information in the future.

In this aspect, information forms the most crucial part of today's business environment. In this context, Transaction Processing System (TPS) has emerged as crucial component of the business operations. Transaction Processing System (TPS) refers to a computerised system that records, processes, validates and stores routine transactions that occur in various functional areas of a business on daily basis. This system facilitates the decision making in a business organisation through the following processes.

1. Data Collection- The TPS collects all the required data to complete one or more transactions. The data can be collected either manually or through other devices such as scanners and point of sale equipments.

2. Data Editing- The system checks the data for its accuracy, correctness and completeness.

3. Data Validation- It refers to a process, where TPS verifies the data for its correctness and rectifies the errors, if detected.

4. Data Manipulation- TPS performs the process of calculation, then processes and analyses the inputted data on a pre-set design.

5. Data Storage- It places or stores the data in one or more database.

6. Output Generation- TPS helps in creating and generating reports and also presents the reports generated in a pre-designed format either as hardcopy or softcopy.

7. Query Support- TPS provides a mechanism enabling its users to raise a query upon the stored data and extract the required information in required format as and when the need arises.


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