Organization Structure, Information Flows and Decision Making

Abstract

The author looks at defining the management process as an open system of information flows and decision making. An organization, through its planning and budgeting processes, establishes a certain capacity for making decisions at different levels. This capacity is affected by both errors in the information flows and decision making, as well as the time and frequency of the processing. In this article, the author chose to focus on the time and frequency risks of the organization's capacity to make decisions. A hypothetical example was used to see if simulation analysis techniques were useful in assessing such risk. The example demonstrated the usefulness of such techniques in the example and the identification of actions to reduce the risk of exceeding the organization's decision capacity.