LECTUREPEDIA - Ajarn Paul Tanongpol, J.D.; M.B.A.;B.A.; CBEST
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LECTUREPEDIA - Ajarn Paul Tanongpol, J.D.; M.B.A.;B.A.; CBEST
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CHAPTER 3: Information and Decision Making
1. INFORMATION TECHNOLOGY AND THE NEW WORKPLACE a. Work and electronic office b. How information technology is changing organizations c. How information technology is changing business
2. INFORMATION AND INFORMATION SYSTEM a. What is useful information b. Information needs of organizations c. Development in information systems d. Information systems and the manager’s job
3. INFORMATION AND DECISION MAKING a. Types of managerial decision b. Decision conditions c. How managers approach decision
4. THE DECISION-MAKING PROCESS a. Steps in decision making b. Behavioral influence on decision making c. Individual and group decision making d. Ethical decision making
5. KNOWLEDGE MANAGEMENT AND ORGANIZATIONAL LEARNING a. What is knowledge management? b. Organizational learning
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1. INFORMATION TECHNOLOGY AND THE NEW WORKPLACE 1. Information is data made useful for decision making.
2. Intellectual capital is the collective brain power of shared knowledge of workforce.
3. Computer competency is the ability to understand and use computers advantageously.
4. Information competency is the ability to utilize computers and information technology to locate, retrieve, evaluate, organize, and analyze information for decision making.
5. Information technology is computer hardware, software, networks and databases supporting information utilization. b. Work and electronic office 1. Progressive organizations re doing whatever they can to streamline work, improve operating efficiencies, and make overall improvements in the workplace through the use of technology.
2. Firms are continually investing in technology obtain and maintain competitive advantage. Outmoded way of doing business will drive you out of the market. In order to survive and compete effectively, your company has to be technologically up-to-date.
3. Technology helps in the following areas: 1. Speed to market 2. Quick response 3. Fast cycle time 4. Time-based competition
c. How information technology is changing organizations 1. Information technology is breaking down the barriers by making communication easier, immediate, inexpensive, and important. IT makes the organization more effective and efficient, as well as more competitive.
2. IT allows all functional units in the company to share information. This facilitates information flow. Computers do the job of carrying data and information among and across levels.
3. In addition to internal benefits, companies also exploit IT for maintaining relationship with external elements, i.e. customer relationship management.
d. How information technology is changing business 1. Electronic commerce is the buying and selling goods and services through the use of the Internet.
2. Dot-com life cycle 1. Secure an on-line identity 2. Establish web presence 3. Enable e-commerce (payment platform) 4. Provide e-commerce and customer relationship management 5. Utilize service application model
3. E-commerce is developing rapidly. It is one of the forces of globalization that opens the world at large to competition and business opportunity.
2. INFORMATION AND INFORMATION SYSTEM ¦ Information systems use IT to collect, organize and distribute data for use in decision making.
a. What is useful information 1. Timeliness 2. Quality 3. Completeness 4. Relevance 5. Understandability
b. Information needs of organizations 1. Managers need intelligence information to interact with outside stakeholders.
2. Winning strategies requires information about events and condition outside of the organization.
3. Higher level managers use information for strategic purpose. Mid and lower level managers use information for operational purpose.
4. IT allows speed and empowerment. IT allows top management to better control operations. IT allows lower level managers to make decision better in their daily activities.
c. Development in information systems 1. Decision support systems o DSS allow computers help organize and analyze data for problem solving.
2. Expert systems o ES allows computers to mimic the thinking of human experts for applied problem solving. o There are some pros and cons in the use of ES. Some said it de-skill managers from actually using their human ability to solve problems. Supporters of ES said it helps free ip manager’s time and allow managers more time to spend on other issues.
3. Intranet and extranets o Intranets are computer networks used for communication and data sharing within an organization.
o The goal of intranets is to promote more integration across the organization and improve operations efficiency and quality.
i. Enterprise-wide networks: use IT to move information quickly and accurately within an organization.
ii. Extranets are computer networks for communication between the organization and its environment.
d. Information systems and the manager’s job 1. Planning advantages o MIS allows better and more timely access to useful information, and involving many people in the planning process.
2. Organizing advantages o All parts of the organization make informed decision. This helps better coordination and integration.
3. Leading advantages o MIS allows better and more frequent communication with all organization members and key environmental stakeholders.
4. Controlling advantages o MIS allows more immediate and complete measurement of performance results and real-time solution to performance problems.
3. INFORMATION AND DECISION MAKING 1. Performance deficiency: results turn out to be less than what was originally expected.
2. Performance opportunity: results turn out to be better than what was originally expected.
b. Types of managerial decision o Problem solving involves identifying and taking action to resolve problems. o Decision is a choice among possible alternative courses of action.
There are two types of managerial decision: a. Programmed decision: applied experience from the past to a routine problem.
b. Non-programmed decision: applied a specific solution crafted for a unique problem.
§ In time of crisis, non-programmed decision must be made. Crisis is an unexpected problem that can lead to disaster if not resolved quickly and appropriately. Depending on technology too much may lead to crisis if the system breaks down.
§ The ability to handle crises is the ultimate test of the managerial abilities.
c. Decision conditions 1. Certain environment offers complete information on possible alternatives and their consequences.
2. Risk environment lacks complete information, but offers “probabilities” of the likely outcomes for possible action alternatives.
3. Uncertain environment lacks so much information that it is difficult to assign probabilities to the likely outcomes of alternatives.
d. How managers approach decision 1. Systematic thinking: approach problems in a rational and analytical fashion.
2. Intuitive thinking: approach problems in a flexible and spontaneous fashion.
3. Strategic opportunities: focus on the long-term objectives while being flexible in dealing with short-term problems.
Strategic opportunism is the ability to remain focused on long-term objectives while being flexible enough to resolve short-term problems and opportunities in a timely fashion.
4. THE DECISION-MAKING PROCESS a. Steps in decision making 1. Identify and define problem 2. Generate and evaluate possible solution o Benefits o Costs o Timeliness o Accessibilities o Ethical soundness
3. Choose solution o Classical decision model § Clearly define problem § Know all alternatives and consequences § Choose optimum alternative
o Behavioral model § Problem not clearly define § Limited knowledge of alternative & consequences § Choose satisfactory alternative
o Judgmental heuristic approach § You remember information in your head – heuristic § Comparison with similar circumstance § Adjust past knowledge to current situation
4. Implement the solution 5. Evaluate result
b. Behavioral influence on decision making 1. Heuristics are strategies for simplifying decision making 2. Escalating commitment is the continuation of a course of action even though it is not working.
c. Individual and group decision making 1. Individual decision: time and quality is the guidance. Know cost and benefits; assets and liabilities. Good managers don’t rely on one way or the other; they switch back and forward between individual and group decision making.
2. Group decision: there are social pressures to conform. The more the people in the decision making process, the longer the time it takes to arrive at a solution.
d. Ethical decision making
5. KNOWLEDGE MANAGEMENT AND ORGANIZATIONAL LEARNING a. What is knowledge management? 1. Knowledge management is the processes using intellectual capital for competitive advantage. 2. Companies now have Chief Knowledge Officer to recognize learning process and to make sure that an organization’s portfolio of intellectual assets and pool of knowledge are well managed and continually enhanced.
b. Organizational learning 1. Mental model: everyone sets aside old way of thinking.
2. Personal mastery: everyone becomes self-aware and open to others.
3. Systems thinking: everyone learns how to learn the organization works.
4. Share vision: Everyone understands and agrees to the planned action.
5. Team learning: everyone works together to accomplish the plans.
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