Daft AISE Chp06 Final
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Transcript of Daft AISE Chp06 Final
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6-1
Managerial DecisionMaking and Information
Technology
Copyright 2006 by South-Western, a division of Thomson Learning. All rights reserved.
Chapter 6
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Learning Objectives1. Explain why decision making is an important component of
good management.
2. Explain the difference between programmed and non
programmed decisions and the decision characteristics of
risk, uncertainty, and ambiguity.
3. Describe the classical, administrative, and political models
of decision making and their applications.
4. Identify the six steps used in managerial decision making.
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Learning Objectives (contd.)5. Explain four personal decision styles used by managers.
6. Discuss the advantages and disadvantages of participative
decision making.
7. Identify techniques for improving decision making in
todays turbulent environment.
8. Describe the importance of information technology (IT) for
organizations and the attributes of quality information.
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Decisions and Decision Making A decision is a choice made from available
alternatives.
Decision making is the process of identifying
problems and opportunities and then resolving
them.
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Types of Decisions
Programmed decisions
situations that occur often enough to enable
decision rules to be developed.
Nonprogrammed decisions
are made in response to situations that areunique, are poorly defined and largely
unstructured.
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Decision Making Conditions
Certainty
all the information the decision maker needs is
fully available.
Risk
decision has clear-cut goals.
good information is available.
future outcomes associated with each
alternative are subject to chance.
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Decision Making Conditions (contd.) Uncertainty
managers know which goals they wish to
achieve.
information about alternatives and future
events is incomplete.
managers may have to come up with creative
approaches to alternatives.
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Decision Making Conditions (contd.) Ambiguity
by far the most difficult decision situation.
goals to be achieved or the problem to be
solved is unclear.
alternatives are difficult to define.
information about outcomes is unavailable.
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Ex. 6.1 Conditions That Affect the Possibility of
Decision Failure
Organizational
Problem
Problem
Solution
Low HighPossibility of Failure
Certainty Risk Uncertainty Ambiguity
Programmed
Decisions
Nonprogrammed
Decisions
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Three Decision Making Models
Classical Model
Administrative Model
Political Model
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Selecting a Decision Making Model
Depends on the managers personal
preference. Whether the decision is programmed or non-
programmed.
Extent to which the decision is characterized
by risk, uncertainty, or ambiguity.
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Classical Model
Based on economic assumptions
Is considered to be normative
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Assumptions of the Classical Model Accomplishes goals that are known and agreed
upon.
Strives for certainty by gathering complete
information.
Criteria for evaluating alternatives are known.
Decision maker is rational and uses logic.
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Administrative Model How managers actually make decisions in situations
characterized by non-programmed decisions, uncertainty,
and ambiguity.
Two concepts are instrumental in shaping the administrative
model.
bounded rationality: means that people have limits or boundaries
on how rational they can be.
satisficing: means that decision makers choose the first solutionalternative that satisfies minimal decision criteria.
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Political Model Closely resembles the real environment in
which most managers and decision makers
operate.
Decisions are complex.
Disagreement and conflict over problems
and solutions are normal.
Coalition building is important.
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Ex. 6.2 Characteristics of Classical, Administrative,
and Political Decision-Making Models
Classical Model Administrative Model Political Model
Clear-cut problem and goals.
Condition of certainty.
Full information about
alternatives and their outcomes.
Rational choice by individual
for maximizing outcomes.
Vague problem and goals.
Condition of uncertainty.
Limited information about
alternatives and their outcomes.
Satisficing choice for resolving
problem using intuition.
Pluralistic; conflicting goals.
Condition of uncertainty/ambiguity.
Inconsistent viewpoints; ambiguous
information.
Bargaining and discussion among
coalition members.
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Ex. 6.3 Six Steps in the Managerial Decision-Making Process
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Diagnosis Questions(Kepner & Tregoe)
What is the state of disequilibrium affecting us?
When did it occur?
Where did it occur?
How did it occur?
To whom did it occur?
What is the urgency of the problem?
What is the interconnectedness of events? What result came from what activity?
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Ex. 6.5 Personal Decision Framework
Situation:
Programmed/non-programmed
Classical, administrative,political
Decision steps
Decision Choice:
Best Solution to Problem
Personal Decision Style:
Directive
AnalyticalConceptual
Behavioral
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The Vroom-Jago ModelThe Model
Helps gauge the appropriate amount of participation for
subordinates.
LeaderParticipation Styles
Five styles available, depending on the situation.
Participation in decision making ranging from highly
autocratic to highly democratic.
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Participation in Decision Making
Diagnostic Questions
Decision significance
Importance of commitment
Leader expertise Likelihood of commitment
Group support for goals
Group expertise
Team competence
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Information Technology
The hardware, software, telecommunications,database management, and other technologiesused to store data and make them available inthe form of information for organizationaldecision making.
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Ex. 6.8 Characteristics ofHigh-Quality Information
Time
Timeliness
Currency
FrequencyTime Period
Content
Accuracy
Relevance
Completeness
ConcisenessScope
Performance
Form
Clarity
Detail
Order
PresentationMedia
Source: Adapted from James A. OBrien,
Introduction to Information Systems, 8th ed. (Burr
Ridge, Ill, Irwin, 1997),284-285.
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Ex. 6.9 Types of Information SystemsOperations Information Systems
Transaction-processing systems.
Process control systems.
Office automation systems.
Management Information Systems
Information-reporting systems.
Decision support systems.
Executive information systems.
Groupware.
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Ex. 6.10 Basic Elements of Management Information Systems
Operations
Information
Systems
Management
Information
Systems
Reporting
Systems
Decision
Support
Systems
Executive
Information
Systems
Groupware
Systems
Corporate
and
External
Databases
SOURCE: Adapted from Ralph M. Stair and George W. Reynolds, Principles
of Information Systems: A Managerial Approach, 4th ed. (Cambridge, Mass.:
Course Technology, 1999), 391.
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Management and Technology
Implications
Improved employee effectiveness.
Increased efficiency.
Empowered employees.
Information overload.
Enhanced collaboration.