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There are different types of decision, they include programmed decision and a non-programmed decision. There are different models for decision making such as classical economic model,administrative model and Herbert Simons model of decision making. For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/welingkarshybridDlp Join us on Facebook: http://www.facebook.com/welearnindia Follow us on Twitter: https://twitter.com/WeLearnIndia Read our latest blog at: http://welearnindia.wordpress.com Subscribe to our Slideshare Channel: http://www.slideshare.net/welingkarDLP
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Welingkar’s Distance Learning Division
I.T. for Management
CHAPTER-9
Role of information inDecision making
We Learn – A Continuous Learning Forum
Welingkar’s Distance Learning Division
Role of Information in Decision Making
Conceptual model of Decision Making• Managers deal with problems posing threats and
offering opportunities. • Managers can be problem avoiders, problem solvers, or
problem seekers. • Managers display systematic and intuitive problem-
solving styles. • Managers make decisions under conditions of certainty,
risk, and uncertainty. • Managers solve problems with programmed and non
programmed decisions. We Learn – A Continuous Learning Forum
Welingkar’s Distance Learning Division
Role of Information in Decision MakingTypes of Decision
• Certain Environment • offers complete information on possible action
alternatives and their consequences.
• Risk Environment • lacks complete information but offers probabilities of
the likely outcomes for possible action alternatives.
• Uncertain Environment • lacks so much information that it is difficult to assign
probabilities to the likely outcomes of alternatives.We Learn – A Continuous Learning Forum
Welingkar’s Distance Learning Division
Role of Information in Decision MakingTypes of Decision
• Decision • a choice among possible alternative courses of
action.
• Programmed Decision • applies a solution from past experience to a routine
problem.
• Non programmed Decision • applies a specific solution crafted for a unique
problem.We Learn – A Continuous Learning Forum
Welingkar’s Distance Learning Division
Role of Information in Decision Making
We Learn – A Continuous Learning Forum
Welingkar’s Distance Learning Division
Role of Information in Decision Making
Conceptual model of Decision makingClassical Economic model This nominative model is based on the following assumptions:• All decisions and outcomes are completely known• The model states that the decision maker always seeks
to maximize profit or utility• The decision maker is infinitely sensitive to difference in
utility among outcome• Decision making in the business context is nothing but a
set of tradeoffsWe Learn – A Continuous Learning Forum
Welingkar’s Distance Learning Division
Role of Information in Decision Making
Conceptual model of Decision makingAdministrative modelIt works on the concept of bounded rationalityIt assumes that the decision maker• Does not know all the alternatives and outcomes• Makes a limited search to discover a few satisfactory
alternatives• Makes a decision which satisfies his or her aspiration
The decision maker has to do a balancing act between the conflicting trade-off’s
We Learn – A Continuous Learning Forum
Welingkar’s Distance Learning Division
Role of Information in Decision Making
Conceptual model of Decision making• Human expectations and decision making• Humans display a variety of responses in decision-making• Anticipatory regret is a psychological response to alternatives,
it inhibits the decision maker from making a decision without contemplating the consequences.
• Decision making under psychological stress• This concept is important to the design of information
systems, because a decision support system to be used under conditions of decision conflict & may not effective unless it takes care of behavior under psychological stress
We Learn – A Continuous Learning Forum
Welingkar’s Distance Learning Division
Role of Information in Decision Making
Conceptual model of Decision makingHerbert Simons model of decision makingThis model divides the process into 3 phases• Intelligence phase• Searching the environment conditions calling for decision
data inputs are obtained ,processed & examined for clues that may identify problems or opportunities
• Design phase• Inventing ,developing possible course of actions
• Choice phase• Selecting one of alternative, or course of actions
We Learn – A Continuous Learning Forum
Welingkar’s Distance Learning Division
Role of Information in Decision Making
Herbert Simons model of decision making
We Learn – A Continuous Learning Forum
Welingkar’s Distance Learning Division
Role of Information in Decision Making
Herbert Simons model of decision making
• Step 1 is to identify and define the problem. • Step 2 is to generate and evaluate alternative
courses of action. • Step 3 is to decide on a preferred course of
action. • Step 4 is to implement the decision. • Step 5 is to evaluate results.
We Learn – A Continuous Learning Forum
Welingkar’s Distance Learning Division
Determining Information NeedData Flow Methods
End of Chapter 9
We Learn – A Continuous Learning Forum
