IT Applications Theory Slideshows
Organisational
Decisions and Systems
By Mark Kelly
mark@vceit.com
Vceit.com
Organisation Hierarchy
• A hierarchy (say “higher arky”) is an
arrangement where there are different levels
of authority or power.
• Organisations usually have a hierarchical
structure, where some people are more
powerful or important than others.
Typical hierarchy in organisations
Typical hierarchy in organisations
STRATEGIC
Typical management hierarchy in
organisations
STRATEGIC
TACTICAL
Typical management hierarchy in
organisations
STRATEGIC
TACTICAL
OPERATIONAL
STRATEGIC DECISION MAKERS
• The very highest level of the hierarchy
• Make very big decisions that:
– Must consider the whole organisation, not just
part of it
– Are expensive
– Are long-term (e.g. years)
– Could be disastrous if wrong
– Define the nature of the organisation
– Changes the organisation’s future
STRATEGIC DECISION MAKERS
Typical Strategic level job titles:
- Chairman
- President
- CEO (Chief Executive Office)
- Board of Directors
- General Manager
Tactical Management
• These people are still high-level, and make important
decisions in their own areas
• But they follow instructions from above: from the
strategic management.
• Tactical managers implement the decisions made at
the strategic level.
• They take a big idea and work out how to make it
happen
• Their decisions are usually limited to a sector of the
org (e.g. advertising, transport) rather than the
whole org.
Typical Tactical-Level Job Titles
•
•
•
•
•
•
Advertising manager
Personnel manager
Creative director
Manager of information systems
Communications director
Chief Financial Officer
Tactical decisions
• Implement strategic decisions
• Are medium-term (e.g. months, weeks)
• Are passed down to the next level of
management…
Operational Management
• Operational managers directly manage nonmanagement staff and the public.
• They make day-to-day decisions that are vital
to actually make things, sell things, provide
services.
• They are at the ‘coal face’ doing business and
making money.
Typical operational job titles
• Store manager
• Foreman
• Army Sergeant
Strategic Example
• The prime minister and parliament decide to
invade New Zealand.
• They are top-level STRATEGIC decisionmakers. They decide on a big, important, risky
moves.
Let’s invade New
Zealand
Strategic
• They do not carry out the invasion
themselves, but they take the big decision and
issue the order to the tactical managers.
Start the invasion,
General
I’ll get right
on it, Sir
…then
attack the
sheep here
and here
Tactical (continued)
• They muster troops
• They order the purchase of anti-sheep
weapons, ammunition, food, medical supplies
etc
• Each tactical
manager has
a specific
area of
responsibility
to focus on
Operational management
• But not even the general and colonels will be
wrestling sheep to the ground.
• They pass their orders to the operational
managers: the lieutenants and sergeants.
• These operational managers are command the
non-management personnel who actually get
the job done… the troops.
Operational management
• The captains tell the lieutenants which way to
lead their troops into the town.
• The lieutenants tell the sergeants which
buildings to take out.
• The sergeants choose which men will lead the
attack.
• The troops (non-management) actually do the
shooting.
Operational management
• Operational managers deal
directly with nonmanagement personnel.
• They are the final and vital
link in the chain of
command that leads to
action.
• Their decisions are
immediate and have a lead
time of mere days or hours.
Example 2
• Supershop, a statewide chain of grocery stores
wants to increase its profit.
• The board of directors discusses how to best
achieve this.
• They decide they will move into the pharmacy
sector and include chemist shops in their
stores.
• This is a big departure from their usual
business. It’s a strategic decision.
Tactical
• The directors instruct the tactical managers to
implement the decision.
• The personnel manager advertises for
pharmacists to be employed.
• The publicity manager plans a TV &
newspaper campaign to advertise the change.
• The facilities manager puts out tenders for the
construction work needed.
Operational
• The builders arrive at a local supermarket.
• The supermarket manager instructs staff to
reorganise shelving to allow the construction
of the pharmacy.
• The manager chooses and arranges training
for staff who will be working in the pharmacy.
Non-management
• Cheryl, the checkout chick, empties out the
shelves where the pharmacy will be built.
• Her decision-making is limited to “I’ll need to
get a trolley to take these cans to the other
shelves.”
Drawing the line
• Sometimes it’s hard to decide whether a
decision is strategic, tactical or operational.
• It can depend on the size of the organisation.
Drawing the line
• E.g. for Safeway, building a new million-dollar
store is a relatively minor tactical decision,
but for the manager of a single gift shop,
building a second store is a massive, strategic
decision.
Drawing the line
• Judge whether the decision will have a
significant impact on the organisation over
quite some time. That would be strategic.
Drawing the line
• If the decision is made to implement a
decision made by a higher-ranking person (but
it doesn’t actually achieve the end by itelf), it’s
tactical.
Drawing the line
• If a decision actually leads workers to doing
something that makes the plan work, it’s
operational.
IT APPLICATIONS SLIDESHOWS
By Mark Kelly
mark@vceit.com
vceit.com
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