MIS: Decision Making

1
MIS Decision Making

• Decision-making process
• Concepts
• Behavioral models decision-maker
• Behavioral models organizational
• Stress and decision-making
• Methods and rules
• Implications for system design

2
Decision-making process

• Herbert Simon Phases
• Intelligence
• Design
• Choice
• Rubenstein Haberstroh problem recognition,
  alternatives analysis, choice, implementation,
  follow-up

3
Intelligence Design Phases

• Problem finding finding a difference between
  desired and actual
• Problem formulation clarify and reduce
  complexity
• Development of alternatives
• A creative process
• Examples brainstorming, scenarios, analogies,
  checklists, process templates

4
Concepts of Decision Making

• Situational dimensions
• Knowledge of outcomes (certainty, uncertainty,
  risk)
• Programmed or nonprogrammed
• Criteria
• Normative (decision-maker seeks optimal outcome)
• Descriptive (decision-maker seeks satisficing
  outcome)
• Level of impact

5
Behavioral Models of the Decision-maker

• Classical (normative)
• Assumes knowledge of all outcomes and
  alternatives
• Seeks to maximize profit or utility
• All differences in utility are recognized
• Administrative (descriptive)
• All alternatives outcomes are NOT known
• Search limited to discovery of a few satisfactory
  alternatives
• Choice based on satisfying aspiration level
• Expectations
• Commitment theory, theory of cognitive
  dissonance, anticipatory regret

6
Behavioral Models of the Organization

• Assumes administrative (satisficing) model and
  attempt to explain behavior of decision-makers in
  an organizational context
• Major explanations
• Quasi-resolution of conflict (via local
  rationality, rules, sequential attention to
  goals)
• Uncertainty avoidance
• Problemistic search (only the recognition of a
  problem will stimulate search for solutions)
• Organizational learning (org. is adaptive over
  time)
• Incremental decision making (changes from status
  quo are small)

7
Decisions Made Under Stress Are Not As Good

• Coping patterns (or strategies)
• Choice of coping pattern based on risks of change
  vs no change, how realistic it is to expect a
  better solution, time constraints
• Incomplete search and appraisal result from
  hypervigilance and defensive avoidance
• Groupthink - can be collective defensive
  avoidance

8
Some Methods for Choosing an Alternative

• Optimization techniques (under certainty)
• Payoff matrices, decision trees (under risk)
• Utility and indifference curves
• Ranking or weighting
• Statistical inference
• Game theory

9
Use of Decision Rules

• Important to document decision rules
• for communication to new employees
• e.g., manuals, instructions, report formats
• logic flowchart
• decision tree

10
Implications for IS Design

• IS must support
• all phases of decision process
• programmed and nonprogrammed decision making
• both optimizing and satisficing behavior
• search processes and adaptive learning
• decision-making under stress (prespecified
  responses to be invoked in time of crisis)
• alternative decision procedures
• a high-quality decision process