Question

What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

*List and describe the different levels of decision making and decisions making constituencies’ in organizations. Explain how their decision making requirements differ.

*Distinguish between an unstructured, semi structured, and structured decision.

*List and describe the stages in decision making.

*Compare the descriptions of managerial behavior in the classical and behavioral models.

*Identify the specific managerial roles that can be supported by information systems.

Answer 1

Decision making is the process of choosing best alternative for reaching objectives.Managers make decision affecting the organization daily and communicate these decisions to other memebers in the organization. There are three types of decisions.

1.Structured Decision

2.Unstructured Decision

3.SemiStrructured Decision

The managerial activities consists the functions of planning, organizing, coordinating, deciding, and controlling. The managers’ real activities are highly fragmented, variegated, and brief in duration and that managers shy away from making grand, sweeping policy decisions. Information technology provides new tools for managers to carry out both traditional and newer management roles, enabling them to monitor, plan, and forecast with more precision and speed than ever before and to respond more rapidly to the changing business environment. Information systems have been most helpful to managers by providing support for their roles in disseminating information, providing liaisons between organizational levels, and allocating resources. However, information systems are less successful at supporting unstructured decisions. Where information systems are useful, information quality, management filters, and organizational culture can degrade decision making.

Levels of Decision Making:

There are three levels of decision making

1.Senior Management

2 Middle Management

3. Operational Management.

Decision makjing constituenets:

Senior management is allowed to take unstructured decisions.

Middle management is allowed to take semi structured decisions.

Operational management is allowed to take structured decisions.

Decision making requirements:

Senior managers are allowed to take decisions such as capital budget,long term goals,entrance and exit from market.

Middle managers are allowed to take decisions such as departmental budget,marketing plan and website enhancement.

Operational managers are allowed to take decisions such as credit and offers for customers,restock inventory .

Structured Decision

A structured decision is one in which the phases of thedecision-making process (intelligence, design, and choice) have standardized procedures, clear objectives,and clearly specified input and output. There exists a procedure for arriving at the best solution.Operational managers allowed to take structured decisions.These Decisions are repetitive and routine.

Unstructured Decision:

An unstructured decision is one where not all of the decision-making phases are structured and human intuition plays an important role Senior managers are allowed to take unstructured decisions.These Decsions are long term future.

Semi-Structured Decision:

. A semi structured decision has some, but not all, structured phases where standardized procedures may be used in combination with individual judgment.Middle managers are allowed to take semi structured decisions.These decisions are short term future.

Stages in Decision Making:

Decision making steps this model depicts are as follows:

1. Identify an existing problem
2. List possible alternatives for solving the problem   
3. Select the most beneficial of these alternatives.   
4. Implement the selected alternative.
5. Gather feedback to find out if the implemented alternative is solving the identified problem.

There are two types of managerial roles played by managers.

1.Classical model

2.Behavioral Model.

Classical Model:

(i) The approach is logical and full of reasoning,

(ii) Economic man always identifies clearly the ends to which he wants to reach and the means which are available for the purpose,

(iii) The manager knows of various alternatives available and will be in a position to evaluate them rationally.

(iv) The manager is supposed to be objective, not allow any bias, preference, liking or disliking in decision making process,

(v) Manager should try to reach goals with positive attitude.

(vi) A manager must have a clear understanding of the existing environment.

Behavioral model

(i) A manager may not have access to all type of required information or information may not be available,

(ii) A rational decision-making requires the search and analysis of various alternatives before reaching a decision. In real situation time available to a decision maker may not be sufficient to go through the rational process. A decision may have to be taken immediately without going through various formalities,

(iii) There may be a situation where multiple and conflicting objectives may be involved, a process of compromise and adjustment becomes necessary for taking decisions rather than rationality,

(iv) Decisions are made to be implemented in future. The future environment is full of complexities and uncertainties and cannot be predicted with a high degree of accuracy. A manager may have to accommodate the changing situations in decision making process,

(v) The problem requiring a solution may be complex and unstructured, it may not be defined with rationality. In such situations a manager may rely on intuition than on rationality,

(vi) The organizational variables such as philosophy, multiplicity of goals, existence of informal goals, power structure may be taken into account while taking decisions. A manager may have to make certain adjustments while taking decisions, even defying the norms of rationality.

Managerial Roles

Information systems support the liaison, nerve center, disseminator, spokesperson, and resource allocator roles. Currently information systems do not support the figurehead, leader, entrepreneur, disturbance handler, and negotiator roles. Information systems are the strongest at the informational role and the weakest at the interpersonal and decisional roles.