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Mis chapter 2 infomation, management and decision making
1. Chapter II
Chapter 2:
Information, Management and Decision Making:
Part A ( 1.5 hours) –
Models of Decision Making - Classical, Administrative and Herbert Simon's
Models
Part B (1.5 hours) - Attributes of information and its relevance to Decision
Making - Types of information
2. Chapter II
Chapter 2:
Information, Management and Decision Making:
Part A ( 1.5 hours) –
Models of Decision Making - Classical, Administrative and Herbert Simon's
Models
3. Decision Making
• Decision: a reasoned choice among alternatives
• Examples:
– Where to advertise a new product
– What stock to buy
– What movie to see
– Where to go for dinner
Decision Making: a process of choosing among
alternative courses of action for the purpose of
attaining a goal or goals
• Decision making vs. problem solving?
• ART or SCIENCE?
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4. Business Decision Aspects
Typical Business Decision Aspects
• Decision may be made by a group
• Several, possibly contradictory objectives
• Hundreds or thousands of alternatives
• Results can occur in the future
• Attitudes towards risk
• “What-if” scenarios
• Trial-and-error experimentation with the real system: may result
in a loss
• Experimentation with the real system can only be done once
• Changes in the environment can occur continuously
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5. LEVELS OF DECISION MAKING
1. STRATEGIC: Long-term objectives; resources; policies
2. MANAGEMENT CONTROL: Monitor use of resources; performance
3. KNOWLEDGE-LEVEL: Evaluate potential innovations; knowledge
4. OPERATIONAL: How to carry out specific day-to-day tasks
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6. Nature of Decision
• Structured Problems
– Routine and repetitive with standard solution
– Well defined decision making procedure
– Given a well-defined set of input, a well defined set of output is
defined
• Semi-structured Problems
– Has some structured aspect
– Some of the inputs or outputs or procedures are not well defined
• Unstructured Problems
– All phases of decision making process are unstructured
– Not well defined input, output set and procedures
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7. Decisions Types
Following are the types of Decision
1. Programmed/Structured Decisions
2. Semi Programmed/Structured Decision
3. Non Programmed Decisions
Structured
Unstructured
Level of decision making - Scope
Strategic
Managerial
Operational
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8. Programmed/Structured Decisions
Nature of Programmed/ Structure Techniques used for taking these
Decision: decision:
1. They are Routine/Structure 1. Habit
2. They are repetitive/short term 2. Standard Operating Procedures
3. Definite procedure is to be (SOP)
followed 3. Organizational
4. There are laid down norms Hierarchy/structure
5. Situations are known 4. Operational research
6. They are taken at lower or 5. Computers
operating levels in the
organization.
10. Non -Programmed/un-structured Decisions
Nature of Non-programmed/ Techniques used for taking these
unstructured Decision: decision:
1. Innovative 1. Judgment
2. New/complex situations 2. Intuition
3. Important and critical 3. Business acumen
4. Strategic 4. Complex/ specially designed
5. Long- term computer programmes
5. Training executives
11. INFO SYSTEMS, LEVE, DECISIONS
ORGANIZATIONAL LEVEL
TYPE OF
DECISION OPERATIONAL KNOWLEDGE MANAGEMENT STRATEGIC
STRUCTURED ACCOUNTS
RECEIVABLE
ELECTRONIC PRODUCTION
SCHEDULING COST OVERRUNS
TPS
OAS MIS
SEMI- BUDGET
STRUCTURED PREPARATION
PROJECT DSS
SCHEDULING
FACILITY
LOCATION
KWS ESS
UNSTRUCTURED PRODUCT DESIGN NEW PRODUCTS
NEW MARKETS
12. Decision Making Process
1. Recognizing and defining the situation
2. Identifying alternatives
3. Evaluation alternatives
4. Selecting the best alternative
5. Implementing the chosen alternative
6. Follow-up and evaluation
13. INDIVIDUAL MODELS OF DECISION MAKING
1. RATIONAL: Comprehensive rationality; evaluate all alternatives
2. SATISFICING: Bounded rationality; choose first “good” alternative
3. MUDDLING (mixed/confused): Successive comparison; marginal changes
4. PSYCHOLOGICAL: Cognitive types; manages differ in how they make
choices
14. ORGANIZATIONAL MODELS OF DECISION MAKING/ Decision Making Styles
1. RATIONAL ACTOR: Maximize organization’s benefits
2. BUREAUCRATIC: Follow standard operating procedures (SOP)
3. POLITICAL: Key groups compete and bargain
4. “GARBAGE CAN”: Organizations not rational; solutions accidental
5. Heuristic: is a method to help solve a problem, commonly an informal method. It is
particularly used to rapidly come to a solution that is reasonably close to the best possible
answer, or 'optimal solution'.
6. Analytic
7. Autocratic
8. Democratic
9. Consultative (with individuals or groups)
10. Combinations and variations
15. Decision Making Models
A. Classical Model: Collecting all required information and taking the decision in
the best interests of the organization.
B. Administrative Model: Collecting all required information and taking the
decision may not be in the best interests of the organization but it will be in the
best interest of managers.
C. Herbert Simon Model:
16. The Herbert Simon’s Model
The decision Making process consists of following phases:
1. Intelligence phase: thinking of the problem as it comes
a) Societal Environment
b) Competitive Environment
c) Organizational Environment
2. Design Phase: this consists for inventing, developing and analyzing the likely solutions
a) Understanding the problem
b) generating the solution
c) Testing the feasibility of solution
3. Choice Phase: Selecting the specific alternative or solution
4. Implementation : Put decision into effect; allocate resources; control
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Relevance of this model:
1) Provide the decision process
2) It provide the base for designing the MIS
Limitation of this model:
1) It is specifies the decision process and will not go beyond choice
2) This model does not includes the feedback phase and corrective action.
17. Chapter II
Chapter 2:
Information, Management and Decision Making:
Part B (1.5 hours) - Attributes of information and its relevance to Decision
Making - Types of information
18. Information
David and Olson Defines,
“Data that has been processed into a form that is
meaningful to the recipient and it is of real or
perceived value in current or prospective actions or
decisions”
INPUT PROCESS OUTPUT
FEEDBACK
19. Overview
Information Systems help companies achieve
their goals.
How do they do it?
1. By processing raw data into information
2. IS can add value to information by enhancing
the attributes (11 of them).
20. 11 Attributes of Information
Usability Delivery
1. Timely
1. Relevant
2. Accessible
2. Simple
3. Secure
3. Flexible
4. Economical
Quality
1. Accurate
2. Verifiable
3. Complete
4. Reliable
21. Information Spectrum
• Data processing Information
• Information intelligence Knowledge
• Knowledge experience Wisdom
22. Information Process
1. Capturing - recording of events and transactions
2. Verifying - validation and checks for correctness
3. Classifying – specific categories
4. Arranging/Sorting – building sequencing
5. Summarizing – combining and aggregate
6. Calculating –Arithmetical and logical computation
7. Storing –storage media
8. Retrieving – searching and accessing the information
9. Reproducing – duplicating or copying of data.
10.Communication – transferring the data from one to another
11.Deleting/purging – removal or deleting the data
23. Types of Information
A. Hierarchical
1. Information needed for Strategic Level
2. Information needed for Tactical Level
3. Information needed for Operational Level
B . Planning and Controlling Perspective
1. Information needed for Planning
2. Information needed for Controlling
3. Information needed for solving problems
4. Information needed for execution
24. Sources of Information
1. Primary Source :
a) First hand information received directly from the users, customers,
employees ( survey , meeting, discussion, interviews etc.)
2. Secondary Sources
a) Published :Government publications, Journals, Newspapers,
Monographs and textbooks, Reference works, Audio Visual, Electronic
media etc
b) Unpublished: Human sources, Dissertations / Theses, Reports, Grey
literature, Information on the Internet Email
25. Human as information Processor
memory
Input from Output
Mental Channels
Sensory Channels response
Processing
Receptors
Inputs Outputs
28. Information requirement
Information requirement is a detailed statement of the information needs that a system must
satisfy. It involves identifying who needs what information, where, when and how.
Information required at different level in the organization:
1. Organizational Level information requirements - Organization level information for
planning, controlling and managing purpose. To get the information we need to
a) Defining sub-systems,
b) Developing managers sub system , and
c) Defining and evaluating the information requirement by sub system
2. Data Base Requirements: Organizing and defining the data class, data types in the
computer system
3. Application level information requirements: Unit level , department level, process level,
information, form level information.
a) Behaviors or role based requirements
b) Technical requirements
29. Techniques for Assessing information Requirements
1. Asking questions
2. Deriving From an existing information system
3. Ends-means analysis : analyzing the end use of the information and then getting
the information requirements
4. Critical Success Factors (CSFs): Collecting all the factors affecting and then collect
the information requirement
5. Business System Planning (BSP): this is the organization wise information
requirements which includes all units, functions, processes and data elements.