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.
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Role of Information Technology in Decision Making - I.T. Project Management
1. Welingkar’s Distance Learning Division
I.T. for Management
CHAPTER-9
Role of information in
Decision making
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2. 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.
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3. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Types 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.
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4. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Types 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.
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6. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Conceptual model of Decision making
Classical 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 tradeoffs
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7. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Conceptual model of Decision making
Administrative model
It works on the concept of bounded rationality
It 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
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8. 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
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9. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Conceptual model of Decision making
Herbert Simons model of decision making
This 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
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10. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Herbert Simons model of decision making
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11. 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.
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12. Welingkar’s Distance Learning Division
Determining Information Need
Data Flow Methods
End of Chapter 9
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