Information, Management and Decision-Making by pitbull99

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									           Information, Management and
                 Decision-Making

                                       Prof. Drakoulis Martakos

                                           University of Athens
                                       Department of Informatics
Dr. Panagiotis Kanellis                Email: martakos@di.uoa.gr


Business Consulting
Email: panagiotis.kanellis@gr.arthurandersen.com
Talk about...

❚   Schools of Management
❚   Decision Making
❚   Organizational Models of Decision Making
❚   IT and the Changed Management Process
Schools of Management

                            The Three Main Schools in Management Theory*

     School Name                                                 Main Emphasis
Technical-Rational                      Emphasizes the precision with which a task can be done, the
                                        organization of tasks into jobs, and jobs into production systems

Behavioral                              Emphasizes how well the organization can adapt to its external
                                        and internal environment

Cognitive                               Emphasizes how well the organization learns and applies know-
                                        how and knowledge, and how well managers provide meaning
                                        to new situations
*Most of the literature on management and organizational theory can be divided into three schools of thought: technical-rational,
behavioral, and cognitive
The Evolution of
Management Theory
                                               Technical-Rational




                                                                                 Total Quality Management
                     Reengineering
                     Value Chain Analysis



                                            Administrative/Bureaucratic School




                                                Scientific Management


                                                         Classical                 Contemporary              Postmodern
                                                     Classical 1900                   Contemporary
                                                         1880              1920         1940    1960       1980   2000

                                                                          Human Relations


    Sensemaking                                                                     User Acceptance

      The Learning
      Organization
                                                                                      Systems Structural

              Structuration
              Theory                                                                      Strategic IS

                                                                                    Network Organizations

    Cognitive                                                               Virtual                      Behavioral
             Knowledge-based firms                                          Organizations

                              Datamining
                              Organizational Knowledge
The Technical-Rational
Perspective

❚ Organization as a closed mechanical
  system (‘watchlike’ mechanism)
❚ Role of manager to design a more perfect
  mechanism by closely studying and
  redesigning the parts (jobs, tasks, people
  and machinery)
The Behavioral
Perspective

❚ Organization as an open, biological
  organism
❚ Role of manager is to assist the
  organization in its quest for survival by
  continually redesigning the organization
  so it can “fit” or adapt to its environment
The Behavioral Model of
Management Activities

❚   High volume, high speed work
❚   Variety and fragmentation
❚   Current Issues, ad hoc, specific
❚   Complex web of interactions, contacts
❚   Strong preference for verbal media
❚   Control of the agenda
Mintzberg’s Managerial Roles
and Supporting IS

                Managerial Roles and Supporting Information Systems

 Role                    Behavior               Support Systems

 Interpersonal roles
 Figurehead                                     None exist
 Leader                  Interpersonal          None exist
 Liaison                                        Electronic communication systems
 Informational Roles
 Nerve center                                   Management Information Systems
 Disseminator            Information            Mail, office systems
 Spokesman               processing             Office and professional systems
 Decisional Roles
 Entrepreneur                                   None exist
 Disturbance handler     Decision               None exist
 Resource allocator      making                 DSS systems
 Negotiator                                     None exist
Postmodern Era:The
Cognitive View

❚ Organization as a knowing, sentient organism
❚ Role of manager is to use his or sense-making
  ability to properly define the situation of the
  organization so it can act (perceive problems
  and define solutions), and to build the
  information- and knowledge processing
  organizational infrastructure
Postmodern era: The
Knowledge-Based View
                                               Environment

                                       Knowledge       Information

                                                  Chaos




                        Information & Knowledge Processing Structures




   Existing stock of explicit
                                                                        Organizational knowledge
        organizational                  Tacit information and                                        ACTIONS
                                +                                =      base: routines, structures
       information and                  knowledge; Know-how
                                                                           alliances, behavior
          knowledge

                                                                                                     Consequences

           Origins                         Learning                        Utilization




                                       THE ORGANIZATION
Levels of Decision Making

❚   Strategic decision making
❚   Management control
❚   Knowledge-level decision making
❚   Operational control

Types of Decisions
❚ Unstructured decisions
❚ Structured decisions
Stages of Decision Making

       ta e   e is n a in , fo a n e u m n n u p rtin
      S g sinD c io M k g In rm tio R q ire e t, a dS p o g
                          fo a n y te s
                        In rm tio S s m
 ta e f e is n a in
S g o D c io M k g      fo a n q ire e t
                      In rmtio re u mn      x m le y te
                                           Ea p Ss m
  tellig ce
In en                  xce tio o g
                      E p nrep rtin        MIS

 e n
D sig                  im la n ro type
                      S u tio p to          S, W
                                           D SK S

 h ice
Co                      h t-if” u tio
                      ‘W a sim la n         S ; rg o e
                                           D S la em d ls

  p m n tion
Im le e ta             ra h      a
                      G p ics, ch rts       C n a fra e e n s
                                           P a dm in m d cisio aid
Individual Models of
Decision Making
                         Models of Individual Decision Making

Name                Basic Concept               Inference Patterns
Rational Model      Comprehensive Rationality   Establish goals, examine all alternatives and
                                                choose the best alternative
Satisficing Model   Bounded Rationality         Establish goals, examine a few alternatives, and
                                                choose the first alternative that promotes the goals
Muddling            Successive Comparison       Examine alternatives to establish a mix of goals and
                                                consequences; choose policies that are marginally
                                                different from those of the past
Psychological       Cognitive Types             All decision-makers choose goals, but they differ in
                                                terms of gathering and evaluating information.
                                                Systematic thinkers impose order on perceptions
                                                and evaluation; intuitive thinkers are more open to
                                                unexpected information and use multiple models
                                                and perspectives when evaluating information.
                                                Neither is more rational than the other
Organizational Models of
Decision Making
                             M o d e ls o f O r g a n iz a tio n a l D e c is io n M a k in g

Nam e                    B a s ic C o n c e p t                    In fe r e n c e P a tte r n s
R a tio n a l A c to r   C o m p re h e n s iv e ra tio n a lity   O rg a n iz a tio n s s e le c t g o a ls , e x a m in e a ll a lte rn a tiv e s
                                                                   a n d c o n s e q u e n c e s , a n d th e n c h o o s e a p o lic y th a t
                                                                   m a x im iz e s th e g o a l o r p re fe re n c e a c tio n
B u re a u c ra tic      O rg a n iz a tio n a l o u tp u t        G o a ls a re d e te rm in e d b y re s o u rc e c o n s tra in ts a n d
                         S ta n d a rd O p e ra tin g              e x is tin g h u m a n a n d c a p ita l re s o u rc e s ; S O P s a re
                         P ro c e d u r e s                        c o m b in e d in to p ro g ra m s , p ro g ra m s in to re p e rto ire s ;
                                                                   th e s e d e te rm in e w h a t p o lic ie s w ill b e c h o s e n . T h e
                                                                   p rim a r y p u rp o s e o f th e o rg a n iz a tio n is to s u r v iv e ;
                                                                   u n c e rta in t y re d u c tio n is th e p r in c ip a l g o a l. P o lic ie s
                                                                   a re c h o s e n th a t a re in c re m e n ta lly d iffe re n t fro m th e
                                                                   p a s t.
P o litic a l            P o litic a l O u tc o m e                O rg a n iz a tio n a l d e c is io n s re s u lt fro m p o litic a l
                                                                   c o m p e titio n ; k e y p la y e rs a re in v o lv e d in a g a m e o f
                                                                   in flu e n c e , b a rg a in in g , a n d p o w e r. O rg a n iz a tio n a l
                                                                   o u tc o m e s a re d e te rm in e d b y th e b e lie fs a n d g o a ls
                                                                   o f p la y e rs , th e ir s k ills in p la y in g th e g a m e , th e
                                                                   re s o u rc e s th e y b rin g to b e a r, a n d th e lim its o n th e ir
                                                                   a tte n tio n a n d p o w e r.
G a rb a g e C a n       N o n -a d a p tiv e                      M o s t o rg a n iz a tio n s a re n o n -a d a p tiv e , te m p o ra r y ,
                         O rg a n iz a tio n a l p ro g ra m s     a n d d is a p p e a r o v e r tim e . O rg a n iz a tio n a l d e c is io n s
                                                                   re s u lt fro m in te ra c tio n s a m o n g s tre a m s o f
                                                                   p ro b le m s , p o te n tia l a c tio n s , p a rtic ip a n ts , a n d
                                                                   chance.
Two Different Viewpoints

❚ Old view: Workers must be told what to do, do not
  want to work hard and either do not know or do not
  care about the goals of the firm

                 Contemporary organizations tend to be less
            hierarchical, more collaborative, more egalitarian, and
                  more dependent on cross-functonal teams



❚ Contemporary view: Employees and managers know
  what to do, want to work hard and succeed, and believe
  in the goals of the firm
Decision Support Systems

❚ Early DSS were reporting systems that performed simple
  calculations, sorting and summarizations
❚ These limitations resulted from the limitations of
  technology itself
❚ Database technology has skyrocketed. Hardware
  advances now allow network servers to process
  gigabytes of information, and advances in connectivity
  bring together many different types of disparate data
  sources
Elements of a DSS

❚ Typical layout for a DSS could include:
  ❙   sales order entry system
  ❙   manufacturing system
  ❙   financial system
  ❙   marketing system
  ❙   connectivity
  ❙   data warehouse/data mart
  ❙   client
  DSS Architecture
                                                                                              Personal Datamart
Data warehouse: a
database or a collection
of databases containing                                                           Datamart
disparate measures of a
common form and under             External Sources
a common definition
                                                                 Data Warehouse



Data mart: a specialized                                                P
section of a data warehouse,
usually defined by a segment of
business or analysis
                                                                            Metadata




                                       Operational environment              Data warehouse environment
Key DSS Benefits

❚ Information intelligence: to identify key
  business issues and opportunities
❚ Competitive advantages: incorporates
  external data on competitors
❚ Proactive analysis: early warning signs on
  brand and competitor performance
❚ Information planning and modelling: ease
  of ‘what-if scenarios

								
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