20 October [email protected] ACHIEVING BUSINESS SUCCESS THROUGH INFORMATION TECHNOLOGY

20 20October 20 20October1010

[email protected]@buu.ac.th 11

ACHIEVING BUSINESS SUCCESS ACHIEVING BUSINESS SUCCESS THROUGH INFORMATION THROUGH INFORMATION

TECHNOLOGYTECHNOLOGY

ACHIEVING BUSINESS SUCCESS ACHIEVING BUSINESS SUCCESS THROUGH INFORMATION THROUGH INFORMATION

TECHNOLOGYTECHNOLOGY

321450321450 Management Management of of I nf or mat i on I nf or mat i on

TechnologyTechnology

321450321450 Management Management of of I nf or mat i on I nf or mat i on

TechnologyTechnology

Chapter 4Chapter 4

The Value Added by Informatio The Value Added by Informatio n Systems n Systems

Asst. Prof. Wichai Bunchua Asst. Prof. Wichai Bunchua- E mail : [email protected] E mail : [email protected]

http://http://www.informaticswww.informatics.buu.ac.th/~wich.buu.ac.th/~wichaiai



Deming’s Deming’s Four Four WWaysays of of Increasing QualityIncreasing QualityDeming’s Deming’s Four Four WWaysays of of Increasing QualityIncreasing Quality

Four ways an organization can increase its quality



The role of feedback in makin The role of feedback in makin g changes g changes



A model of the value added by inf A model of the value added by inf ormation systems ormation systems



How Information Systems How Information Systems Add Value to Managers Add Value to Managers



The nature of managemen The nature of managementt

The management is a complicated one Manager live in a world of tensions;

they must constantly balance a variety of visions, needs, and constraints.

They have their own visions of the organization’s future, but they are pulled, too, by the visions, needs, and hopes of others who have vested interests.



How managers spend their How managers spend theirtimetime

Managers talk and listen; the overwhelming majority of management time is spent in verbal communication.

From Mintzberg’s research Scheduled meeting 59 % Unscheduled meeting 10 % Telephone call 6 % Tours 3 % Desk work 22 %



Adding Value to Managem Adding Value to Managem ent with Information Syste ent with Information Syste

msms


msms Characteristics of managers

Social - Spend two thirds of time in meetings Have many brief encounters Constantly attempt to gain informatio

n Consider traditional MIS reports as not

too important




msms


msmsConclusion - Systems considered valuable Must offer useful support in additional to

produce reports That help them communicate quickly and

effectively, especially in meetings That aid in assimilating and monitoring

information that aid the executive processes –

particular decision making



How Information Systems Ad How Information Systems Ad d Value to Ploblem Solving an d Value to Ploblem Solving an

d Decision Making d Decision Making



Ploblem Solving and Decisi Ploblem Solving and Decisi on Making on Making

Problem solving and d ecisionmaking are two of the most important activites in business

Problem solving processes involves five activites (see Figure 4-11)

Decision making is a subset of problem solving; it consists of the first three stages.



PPrr oblem Solving oblem Solving

Problem solving processes involves five activites

Problem investigation Develop alternatives Select an alternative Implement the solution Monitor



PPrr oblem Solving oblem Solving

First, an investigation is conducted to gather information about the problem. Particulars of the problem are identified; the problem is defined; and the constraints, problem scope,

and problem environment are described



PPrr oblem Solving oblem Solving (cont.)(cont.)

Next, a number of alternative problem solutions are developed

These alternatives are then evaluated, and, in the next stage, one is selected.

In the fourth stage, the selected alternative is implemented

Finally, after implementation, the situation is monitored and the problem solution is modified



Components ofComponents of P Prr oblem Solvi oblem Solvi ng ng ProcessProcess



Decision Making Decision Making

Decision making is a subset of problem solving; it consists of the first three stages.

Simon, one of the pioneers of decision science called these three stages intelligence, design, and choice

The third stage, the selection of an alternative, is referred to as choice selection



Decision Making Models Decision Making Models Decision Making Models Decision Making Models

Classical decision theory Behavioral decision theory

Bounded rationality model Contextual rationality model Constrianed results model



Classical Classical DD ecision ecision TTheoryheory Classical Classical DD ecision ecision TTheoryheory

Classical decision theory It assumes that managers are

always rational, that they have perfect information about the problem and its alternatives, and that they have a complete specification of the objectives to be maximized.



Behavioral Behavioral DD ecision ecision TTheorheoryy

Behavioral Behavioral DD ecision ecision TTheorheoryy

Behavioral decision theory It assumes that the decision makers

have imperfect knowledge about the problem and its alternatives; and that they are unable or unwilling to make a rational assessment of the best possible decision.

Simon used the term b ounded rationality to refer the behavior of decision makers working within the limits of their knowledge of the problem and their ability or willingness to make rational decisions



Contextual Contextual RR ationality ationality MMododelel

Contextual Contextual RR ationality ationality MMododelel

James March defined the term Contextual rationality model

This model recognizes that people making decisions under pressures in a complex environment involving many decisions and multiple criteria for each, with limited knowledge and time.

Most decisions occur in an ambiguous environment; the specific issues involved may be unclear, the relationship to the solution alternatives may be indirect, and the whole process occur in a political environment.



Constrianed Constrianed RR esults esults MModelodel Constrianed Constrianed RR esults esults MModelodel

Constrianed results model O’Reilly stated that the decision

making process often works backwards.

Instead of freely identifying alternatives and rationally selecting them, decision makers begin by identifying one or a few outcomes that they deem acceptable. They then constrain the decision process so that it will generate one of these results.



Adding value to decision m Adding value to decision m aking with information syst aking with information syst

emsems

Adding value to decision m Adding value to decision m aking with information syst aking with information syst

emsems The goal of information is to improve

the quality of decisions and their resulting problem solving

To do this, information systems facilitate activity in each of the five stages. Consider two of the models

Information systems and bounded rati onality decision making

Information systems and constrained results decision making



Information systems and bou Information systems and bou nded rationality decision mak nded rationality decision mak

inging

Information systems and bou Information systems and bou nded rationality decision mak nded rationality decision mak

inging



Group Group DD ecision ecision MMakakinging

Group Group DD ecision ecision MMakakinging



Group decision making Group decision making Group decision making Group decision making

Most of decision making assumes that decisions are made by a sole, authoritarian individual In the military In some medical situations In tightly controlled group

Mostly in business is not done by a single individual, instead by groups



Advantages of Group decis Advantages of Group decisionion--makingmaking

Advantages of Group decis Advantages of Group decisionion--makingmaking

Greater group commitment to the decisio n and its implementation

Better group understanding of the proble m and the rationale for the decision

Improved communication to implementors

Reduced likelihood of descriptive activity at implementation

More comprehensive consideration of the problem and related issues



Disadvantages of Group de Disadvantages of Group decisioncision--makingmaking

Disadvantages of Group de Disadvantages of Group decisioncision--makingmaking

More time consuming Greater cost (of the decision, not ne

cessarily of the problem solution) Inappropreate influence of group dy

namics (domination, rigidity, groupthink)

Tendency toward compromise soluti ons of poor quality



Information Systems and C Information Systems and C ompetitative Advantage ompetitative Advantage


A number of different ways that information systems can add value to organizations and to individuals Add value to both processes and products. Can be used for both innovation and

improvement in product quality and process quality

Can be used to falicitate management and to enhance problem solving and decision making





Porte and Millar, “Competitative Advantage”

The information revolution is affecting competit ative in three vital ways:

It changes industry structure and, in so doing, alters the rule of competition

It creates competitative advantage by giving c ompanies new ways to outperform theirs rival

s It spawns whole new businesses, often from wi

thin a company’s existing operations.



Questions?Questions?Questions?Questions?



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20 October [email protected] ACHIEVING BUSINESS SUCCESS THROUGH INFORMATION TECHNOLOGY