Information

1
Chapter 7

• Information Decision Making

2
Planning Ahead Chapter 7

• How is information technology changing the
  workplace?
• What in the role of information in the management
  process?
• How do managers use information to make
  decisions?
• What are the steps in the decision-making
  process?
• What are the issues in managerial decsion making?

3
Information Technology the Changing Workplace

• Technology Terms to know
• Knowledge Worker
• Intellectual capital
• Electronic commerce
• Instant messaging

4
How IT Changes Organizations
People, teams and departments are better
connected by IT
Organizations are flatter as IT replaces
management levels
IT breaks barriers
Suppliers
Customers
Supply chain management is improved by
IT connections
Customer relationship management is improved by
IT connections
Strategic Partners
More things are done by outsourcing
and partnerships using IT
5
What is Useful Information?

• Criteria for Useful Information
• Timely
• High Quality
• Complete
• Relevant
• Understandable

6
Avoiding Common Information Systems Mistakes

• Dont assume more information is always better.
• Dont assume that computers eliminate the need
  for human judgment.
• Dont assume the newest technology is always
  best.
• Dont assume nothing will ever go wrong with
  your computer.
• Dont assume that everyone understands how the
  system works.

7.1
7
IT and the Managerial Roles
Decisional Roles Information used for
entrepreneurship, resource allocation,
disturbance handling, negotiation
Computer Literacy
Information Technology
Manager as information processing nerve center
Information Roles Information sought, received,
transferred among insiders and outsiders
Interpersonal Roles Information used for
ceremonies, motivation and networking
Information Literacy
8
Information Managerial Decisions

• What is problem solving?
• What is a decision?

9
Types of Managerial Decisions
Structured Problem
Programmed Decision
Non-programmed Decision
Unstructured Problem
CRISIS
10
Rules for Crisis Management

• Figure out what is going on.
• Remember that speed counts.
• Remember that slow counts, also.
• Respect the danger of the unfamiliar.
• Value the skeptic.
• Be ready to fight fire with fire.

7.2
11
The Decision Making Process
Step 1 Find define the problem
Step 2 Generate evaluate alternative solutions
Step 3 Make decision conduct ethics double-check
Step 4 Implement the decision
Step 5 Evaluate results
Repeat the process as necessary
12
Classical versus Behavioral Models of Managerial
Decision making
Classical Model
Behavioral Model

• Structured problem
• Clearly defined
• Certain environment
• Complete information
• All alternatives and
• consequences known
• Optimizing Decision
• Choose absolute best
• among alternatives

• Unstructured problem
• Not clearly defined
• Uncertain environment
• Incomplete information
• Not all alternatives and
• consequences known
• Satisficing Decision
• Choose first
• satisfactoryalternative

Rationality Acts in perfect world
Manager as decision maker
Bounded rationality Acts with cognitive
limitations
13
Issues in Managerial Decision Making

• Decision Making Errors Traps
• Heuristics
• Availability
• Representative
• Anchoring Adjustment
• Framing Error
• Escalating Commitment

14
Heuristics

• Availability Heuristic
• Occurs when people use information readily
  available from memory to assess a situation
• Representative Heuristic
• Occurs when people assess the likelihood of
  something happening based upon its similarity to
  a stereotyped set of occurrences
• Anchoring Adjustment Heuristic
• Involves making decisions based on adjustments to
  a previously existing value or starting point

15
How to Avoid the Escalation Trap

• Set advance limits on your involvement and
  commitment to a particular course of action
• Make your own decisions
• Carefully determine just why you are continuing a
  course of action
• Remind yourself of what a course of action is
  costing
• Watch for escalation tendencies

7.3
16
Ethical Criteria for Decision Making

• UtilityDoes the decision satisfy all
  stakeholders?
• RightsDoes the decision respect the rights and
  duties of everyone?
• JusticeIs the decision consistent with the
  canons of justice?
• Caring Is the decision consistent with my
  responsibilities to care?

17
Chapter 7 Review

• How is information technology changing the
  workplace?
• What in the role of information in the management
  process?
• How do managers use information to make
  decisions?
• What are the steps in the decision-making
  process?
• What are the issues in managerial decision making?