1. Information Technology and Decision Making
Intellectual Capital
The collective brainpower or shared knowledge of a workforce that can be used to create wealth.
It is a major source of competitive advantage.

2. Information Technology and the New Workplace
Electronic Office
Refers to the use of computers and related technologies to electronically facilitate operations in an office environment.

3. Information Technology and the New Workplace
Electronic Commerce
Called e-business and it information technology to support on-line commercial transactions.
Amazon.com is a striking example of
e-commerce and its dynamics.

4. External and Internal Information Needs of Organizations
Public Information
Intelligence Information
Gathered from the
external environment
Disseminated to the
external environment
Top
Management
Formulates strategy, policies,
long-term plans, and objectives,
make strategic decisions.
Middle Managers
Formulate operational plans and objectives
to implement strategy; make operational decisions
First-Level Managers
Implement operational plans and objectives; make
short-run decisions; transact day-to-day business operations

5. Developments in Information Systems
Use IT to collect, organize, and distribute data for use in decision making.
Chief Information Officer
Senior executive responsible for IT and it utilization throughout an organization.

6. Developments in Information Systems
Management Information Systems
Use IT to meet the information needs of managers as they make decisions.
Decision Support Systems
Use special soft ware to allow users to interact directly with a computer to help make decision for solving complex problems.

7. Developments in Information Systems
Group Decision- Support Systems
Groupware
Artificial Intelligence
Expert Systems
Intranets
Extranets
Interorganizational Information Systems

8. Information and Problem Solving
A Problem
Is the difference between an actual situation and a desired situation.
When the actual situation is less than desired it is a performance deficiency
When the situation turns out better than anticipated we have a performance opportunity

9. Information and Problem Solving
The process of identifying a discrepancy between an actual and desired state of affairs, and then taking action to resolve the discrepancy.
This process is dependent upon the right information being available to the right people at the right time.

10. Types of Managerial Problems
Structured
Ones that are familiar, straightforward, and clear in respect to the information needed to resolve them.
Unstructured
Tend to occur as new or unexpected situations that involve ambiguities and information deficiencies.

11. Types of Managerial Problems
Programmed Decisions
Apply solutions from past experiences to the problem at hand.
Nonprogrammed Decisions
Develop unique solutions that are specifically tailored to the situation at hand.

12. Types of Managerial Problems
Nonprogrammed decisions are required when new and unfamiliar problems arise, and/or when standard responses have not been prepared.
Most problems faced by higher-level managers are of this type.
Conceptual Skills are Important

13. Types of Managerial Problems
Crisis Problem
An unexpected problem that can lead to disaster if not resolved quickly and appropriately.
Exxon Valdez Chernobyl
Hugo

14. Problem Environments Certain Environments Risk Environments
They offer complete information on possible action alternatives and their consequences.
Risk Environments
They lack complete information, but offer “probabilities” of the likely outcomes for possible action alternatives.

15. Problem Environments Uncertain Environments
They are so poor in information that it is difficult even to assign probabilities to the likely outcomes of alternatives.
Groups and creative problem solving techniques are frequently used in these situations.

16. How Managers Deal With Problems
Problem Avoiders - Inactive
Those who ignore information that would otherwise signal the presence of a problem.
Problem Solvers - Reactive
Those who try to solve problems when they arise.
Problem Seekers - Proactive
Those who actively look for problems to solve, or opportunities to explore as a matter of routine.

17. How Managers Deal With Problems
Systematic Thinkers
Approaches problems in a rational step-by-step, and analytical fashion.
* Planning before action
* Ordered search for information
* Conscious of their approach
* Break down complex problems into smaller components and then address them in a logical and integrated fashion.

18. How Managers Deal With Problems
Intuitive Thinkers
Approach problems in a flexible, spontaneous, and quite often, a creative way.
* They provide imaginative responses to problems based on a quick and broad evaluation
* They rely on unverbalized cues and hunches, ... defend solutions in terms of “fit”.
* Most effective in high uncertain environments.

19. How Managers Deal With Problems
Multidimensional Thinkers
Those with the capacity to view many problems at once, in relationship to one another, and across long and short time horizons.
Strategic Opportunism
The ability to remain focused on long-term objectives by being flexible in dealing with short-term problems and opportunities as they occur.

20. The Problem Solving Process
Find and define the problem
Generate and evaluate alternative solutions
Select preferred solution and conduct ethics double-check
Implement the solution
Evaluate the results

21. Finding and Defining the Problem
Find the Problem
Identify the gaps between actual and desired states of affaire, and determine their causes. Gather information.
* Don’t define the problem too broadly or too narrowly.
* Don’t focus on symptoms instead of causes.
* Don’t choose the wrong problem to deal with.

22. Generate and Evaluate Possible Solutions
Criteria for Evaluating Alternatives
Benefits - What is gained or resolved?
Costs - How much and how risky?
Timeliness - How fast will things occur?
Acceptability -Acceptance and support by those who must live with the decision.
Ethical Soundness - Does it meet with the acceptable ethical criteria of the various stakeholders?

23. Choose a Solution and Conduct the Ethical Double-Check
Management Theory Recognizes Differences Between Two Major Models of Decision Making:
Classical Decision Model - describes how managers should ideally make decisions using complete information. (Optimizing)
Administrative Decision Model - describes how managers act in situations of limited information and bounded rationality. (Satisficing)

24. Choose a Solution and Conduct the Ethical Double-Check
Judgmental Heuristics
Heuristics are strategies for simplifying decision making. There are three specific and common approaches, identified as judgmental, that have potential biases:
Availability Heuristic
Representative Heuristic
Anchoring and Adjustment Heuristic

25. Choose a Solution and Conduct the Ethical Double-Check
Escalating Commitments
Another potential decision-making error…..it is the tendency to continue to pursue a course of action, even though it is not working.
Don’t forget the Ethics Double-Check

26. Implement the Solution
Take Action to Ensure That the Solution Decided Upon Becomes a Reality.
Avoid the lack-of-participation error - the failure to adequately involve those persons whose support is necessary to ensure a decision’s complete implementation.

27. Evaluate Results
Compare the actual and desired results to insure that the problem has really been solved.