INFORMATION & D E C I S I O N M A K I N GPrepared By Ratna Dwi WulandariDept. Administration & Health PolicySchool of Public Health University of Airlangga

MANAGERIAL SENSE-MAKING:MANAGERS:Create mental mapsAre problem solvers, decision makersAre information processorsCreate & support information processing

MANAGERIAL ROLES (Mintzberg):Interpersonal: figureheads & leadersInformational: receive; disseminate critical infoDecisional: initiate activities; handle disturbances; allocate resources; negotiate conflicts

Wrapps SUCCESSFUL MANAGER:

Decision StructureStructured situations where the procedures to follow when a decision is needed can be specified in advanceUnstructured decision situations where it is not possible to specify in advance most of the decision procedures to followSemistructured - decision procedures that can be prespecified, but not enough to lead to a definite recommended decision

TYPES OF DECISIONSSTRUCTURED:Repetitive; routine; definite procedure; certaintySEMISTRUCTURED: One or more factors not structured; riskUNSTRUCTURED: Unique; non-routine; uncertainty; requires judgment

LEVELS OF DECISION MAKINGSTRATEGIC: Long-term objectives; resources; policiesTACTICAL:MANAGEMENT CONTROL: Monitor use of resources; performanceKNOWLEDGE-BASED: Evaluate potential innovations; knowledgeOPERATIONAL: How to carry out specific day-to-day tasks

Levels of Management Decision MakingStrategic managementExecutives develop organizational goals, strategies, policies, and objectives As part of a strategic planning processTactical managementManagers and business professionals in self-directed teams Develop short- and medium-range plans, schedules and budgets Specify the policies, procedures and business objectives for their subunits

Levels of Management Decision MakingOperational managementManagers or members of self-directed teams Develop short-range plans such as weekly production schedules

STAGES OF DECISION MAKINGINTELLIGENCE: Collect information; identify problemDESIGN: Conceive alternatives; select criteriaCHOICE: Use criteria to evaluate alternatives; select IMPLEMENTATION: Put decision into effect; allocate resources; control

SOURCE: Simon, The New Science of Management Decision (1960)

INDIVIDUAL MODELS OF DECISION MAKINGRATIONAL: Comprehensive rationality; evaluate all alternativesSATISFICING: Bounded rationality; choose first good alternativeMUDDLING: Successive comparison; marginal changesPSYCHOLOGICAL: Cognitive types; manages differ in how they make choices

ORGANIZATIONAL MODELS OF DECISION MAKINGRATIONAL ACTOR: Maximize organizations benefitsBUREAUCRATIC: Follow standard operating procedures (SOP)POLITICAL: Key groups compete and bargainGARBAGE CAN: Organizations not rational; solutions accidental

INFO SYSTEMS, LEVELS, DECISIONSORGANIZATIONAL LEVELTYPE OFDECISIONOPERATIONALKNOWLEDGEMANAGEMENTSTRATEGICSTRUCTUREDACCOUNTS RECEIVABLEELECTRONIC PRODUCTIONSCHEDULINGCOST OVERRUNSSEMI-BUDGETSTRUCTUREDPREPARATION PROJECTSCHEDULINGFACILITYLOCATIONUNSTRUCTUREDPRODUCT DESIGNNEW PRODUCTSNEW MARKETS

Information required at different management levels

Information Systems to support decisions

DECISION SUPPORT SYSTEMS(DSS)

Decision Support TrendsPersonalized proactive decision analyticsWeb-Based applicationsDecisions at lower levels of management and by teams and individualsBusiness intelligence applications

Decision Support SystemsProvide interactive information support to managers and business professionals during the decision-making processUse:Analytical modelsSpecialized databasesA decision makers own insights and judgmentsInteractive computer-based modelingTo support semistructured business decisions

DSS components

DSS Model baseModel baseA software component that consists of models used in computational and analytical routines that mathematically express relations among variablesExamples:Linear programming models,Multiple regression forecasting modelsCapital budgeting present value models

Using DSSWhat-if Analysis End user makes changes to variables, or relationships among variables, and observes the resulting changes in the values of other variablesSensitivity Analysis Value of only one variable is changed repeatedly and the resulting changes in other variables are observed

Using DSSGoal-SeekingSet a target value for a variable and then repeatedly change other variables until the target value is achievedHow can analysisOptimization Goal is to find the optimum value for one or more target variables given certain constraints One or more other variables are changed repeatedly until the best values for the target variables are discovered