Introduction
There are some metrics concerning decision-makers’ performance and decisions themselves: efficiency and effectiveness. As a rule, decision efficiency is defined by the number of resources consumed in a decision-making process. Such resources may include time, during which all advantages and disadvantages are considered, money, which decision-maker is paid for employees, office, space, office or another place, and others. It is necessary to mention that sometimes decisions should be made quickly, which makes time one of the most crucial resources. The time spent on this process is counted in minutes, starting with the input, receiving or stating a task to solve some issue, and ending with the output, when the decision is made. Overall, this metric evaluates a group’s or an individual’s performance: the fewer resources are used, the more efficient the decision will be.
Decision effectiveness focuses on the accuracy, profitability, and competitive performance of the action taken. According to Newgren, Stair, and Kuehn (1981), opportunity cost should be reflected by decision time and include a minor factor that encourages the usage of decision tools outside the frames of the considered case. In other words, effectiveness stands for the most optimal and beneficial for a company way to solve an occurred problem. According to Bakos and Treacy (1986), businesses often use Informational Technologies (IT) to perform the most profitable for their decision-making and find the most effective way for this. This means that IT tools are often used to help managers make effective decisions and increase competitive performance by elaborating a corporate strategy for their company. Overall, comparing decisions’ efficiency and effectiveness, one may claim that the former focuses on how the decision-maker performs, and the latter on what benefits the decision may lead to.
Achievement of Organizational Goals with IT and Internal Strategy
As was already mentioned above, IT tools are used in a company’s performance and decision-making process. Thus, one may claim that IT and Internal Strategy are designed to carry out the set goals and objectives in both efficient and effective ways. Optimal groups’ performance and profitable decisions are a subject of concern of internal strategy, which focuses on organizational structure and process. To begin with, organization structure studies potential alternatives to the organizational form at corporate and group levels and tries to choose between them in the most effective way to increase profits. Moreover, according to Perrow and Charles (1967), the organizational process focuses on how and by applying what systems the work is done. Therefore, there are two central objectives that any company has: increasing efficiency and effectiveness in organizational structures and processes.
Concerning the ways internal strategy and IT help achieve these goals over decision-making performance at the structural and processual levels, they usually differ in their focus, emphasis, and applicability. However, all these approaches have a similar formula, the essential step of which is that opportunities for using IT to improve the internal corporate strategy should be identified. It is worth mentioning that Rockart and Scott Morton (1984) created the value-added chain in their identification and description of potential benefits gained from IT applications to make organizational performance more efficient. According to Rockart and Scott Morton (1984), there are three types of opportunities leading to increasing competitive advantage: improving each value-adding function, linking with customers and suppliers, and launching new ventures.
Conclusion
To conclude, each company seeks to increase its decisions’ efficiency, evaluation of groups’ performance and amount of resources, and effectiveness, accuracy, and profitability of made decisions. These goals can be achieved at both structural and processual levels of organizations. For this, a company is usually recommended to use both IT and internal strategy opportunities, which may improve the value-adding function and help launch new ventures.
Reference List
Bakos, J. Y., & Treacy, M. E. (1986) ‘Information technology and corporate strategy: a research perspective.’ MIS quarterly, pp. 107-119.
Newgren, K. E., Stair, R. M., & Kuehn, R. R. (1981) ‘Decision efficiency and effectiveness in a business simulation.’ In Developments in Business Simulation and Experiential Learning: Proceedings of the Annual ABSEL conference (Vol. 8).
Perrow, C. (1967) ‘A framework for the comparative analysis of organizations.’ American sociological review 32, pp. 194-208.
Rockart, J. F. & Scott Morton, M. S. (1984) ‘Implications of changes in information technology for corporate strategy.’ Interfaces 14(1), pp. 84-95.