B0H4M

1. B0H4M CHAPTER 13

2. Information, Technology , and Management WHAT IS USEFUL INFORMATION? • Data. • Raw facts and observations. • Information. • Data made useful for decision making. • Information drives management functions. • Characteristics of useful information: • Timely. • High quality. • Complete. • Relevant. • Understandable.

3. Information needs of organizations. • Information exchanges with the external environment: • Gather intelligence information. • Provide public information. • Information exchanges within the organization: • Facilitate decision making. • Facilitate problem solving.

4. Basic information system concepts: • Information system. • Use of the latest IT to collect, organize, and distribute data for use in decision making. • Management Information System (MIS). • Specifically designed to meet the information needs of managers in daily decision making.

5. 13.2 Information and Managerial decisions • Managerial advantages of IT utilization • Planning advantages. • Better and more timely access to useful information. • Involving more people in planning. • Organizing advantages. • More ongoing and informed communication among all parts of the organization. • Improved coordination and integration

6. Managerial advantages of IT utilization (cont.): • Leading advantages. • Improved communication with staff and stakeholders. • Keeping objectives clear. • Controlling advantages. • More immediate measures of performance results. • Allows real-time solutions to performance problems.

7. A performance deficiency • Actual performance being less than desired performance. • A performance opportunity • Actual performance being better than desired performance. • Problem solving • The process of identifying a discrepancy between actual and desired performance and taking action to resolve it. • A decision • A choice among possible alternative course of action.

8. Problem-solving approaches or styles: • Problem avoiders. • Inactive in information gathering and solving problems. • Problem solvers. • Reactive in gathering information and solving problems. • Problem seekers. • Proactive in anticipating problems and opportunities and taking appropriate action to gain an advantage.

9. Systematic versus intuitive thinking. • Systematic thinking approaches problems in a rational, step-by-step, and analytical fashion. • Intuitive thinking approaches problems in a flexible and spontaneous fashion. • Multidimensional thinking applies both intuitive and systematic thinking. • Effective multidimensional thinking requires skill at strategic opportunism.

10. Cognitive styles. • Sensation Thinkers emphasize the impersonal rather than the personal and take a realistic approach to problem solving. • Intuitive Thinkers are comfortable with abstraction and tend to be idealistic. spontaneous fashion. • Intuitive Feelers prefer broad and global issues and are comfortable with intangibles. • Sensation Feelers emphasize analysis and human relations and tend to be realistic and prefer facts.

11. Programmed decisions. • Applies a solution from past experience to a routine problem • Nonprogrammed decisions. • Applies a specific solution created for a unique problem

12. Crisis decision making. • A crisis involves an unexpected problem that can lead to disaster if not resolved quickly and appropriately. • Rules for crisis management: • Figure out what is going on. • Remember that speed matters. • Remember that slow counts, too. • Respect the danger of the unfamiliar. • Value the skeptic. • Be ready to “fight fire with fire.”

13. Decision environments: • Certain environments. • Offer complete information about possible action alternatives and their outcomes. • Risk environments. • Lack complete information about action alternatives and their consequences, but offer some estimates of probabilities of outcomes for possible action alternatives. • Uncertain environments • Information is so poor that probabilities cannot be assigned to likely outcomes of known action alternatives.

14. 13.3 The Decision-Making Process Five-step decision-making process: • Identify and define the problem. • Generate and evaluate possible solutions. • Choose a preferred course of action and conduct the “ethics double check.” • Implement the decision. • Evaluate results.

15. Types of heuristics for simplifying decision making: • Availability heuristic. • People use information “readily available” from memory as a basis for assessing a current event or situation. • Representativeness heuristic. • People assess the likelihood of something happening based upon its similarity to a stereotyped set of occurrences. • Anchoring and adjustment heuristic. • People make decisions based on adjustments to a previously existing value or starting point.

16. 13.4 Issues in Managerial Decision-Making • Framing Error. • The tendency to evaluate and resolve a problem in the context in which it is perceived – either positively or negatively. • Confirmation Error. • the tendency to focus only on information that confirms a decision already made.

17. Escalating commitment. • The tendency to increase effort and apply more resources to a course of action that is not working. • Ways to avoid the escalation trap: • Set advance limits and stick to them. • Make your own decisions. • Carefully determine why you are continuing a course of action. • Remind yourself of the costs. • Watch for escalation tendencies.

18. Creative Decision making: • Creativity is the generation of a novel idea or unique approach that solves a problem or crafts an opportunity. • creativity is more likely when decision makers are highly task motivated. • Organizations should create an environment that supports and encourages creativity.

19. Potential advantages of group decision making: • Greater amounts of information, knowledge, and expertise are available. • More action alternatives are considered. • Increased understanding and acceptance of outcomes. • Increased commitment to implement final plans.

20. Potential disadvantages of group decision making: • Pressure to conform. • Minority domination may occur. • Decision making takes longer.

21. When group decision making works best: • Individual lacks expertise or information. • Problem is unclear and hard to define. • Acceptance by others needed for effective implementation • Time is sufficient for group involvement.

22. Ethical decision making. • Any decision should meet “ethics double check.” mentioned in step 3 of the decision-making process. • How would I feel if my family found out about this decision? • How would I feel if this decision were published in the local newspaper? • Any discomfort in answering these questions indicates the decision has ethical shortcomings.

23. Ethical decision making (cont.) • Considering the ethics of a proposed decision may result in better decisions and prevention of costly litigation. • Ethical decisions satisfy the following criteria: • Utility. • Rights. • Justice. • Caring.