Making Business Decisions
- Decision making process - plays a crucial role in communication and leadership for operational, managerial, and strategic projects
- Decision making essentials (managerial decision making challenges)
- Managers need to analyze large amounts of information
- Innovation in communication and globalization have resulted in a dramatic increase in the variables and dimensions people need to consider when making a decision, problem solving or appraising an opportunity
- Managers must take decisions quickly
- Time is of the essence and people simply don not have time to sift through all the information manually
- Manager must apply sophisticated analysis technique, such as Porter's strategies or forecasting, to make strategic decisions
- Due to the intensely competitive global business environment, companies must offer far more than just a great product to succeed
- Operational (decision making process)
- Problem identification - Define the problem as clearly and precisely as possible
- Data collection - Gather problem-related data, including who, what, where, when,why, and how. Be sure to gather facts, not rumours or opinions about the problem
- Solution generation - Detail every solution possible, including ideas that seem fart etched
- Solution test - Evaluate solutions in terms of feasibility (can it be completed?), suitability (is it permanent or a temporary fix?), and acceptability (can all participants from a consensus?)
- Solution selection - Select the solution that best solution that best solves the problem and meets the needs of the business
- Solution implementation - If the solution solves the problems, then the decisions made were correct. If not, then the decisions were incorrect and the process begins again
- Managerial
- At this level, employees are continuously evaluating company operations to hone the firm's abilities to identify, adapt to, and leverage change
- These types of decisions are considered semi-structured decisions they occur in situations in which few established processes help to evaluate potential solutions, but not enough to lead to a definite recommended decisions
- Strategic
- At this level, managers develop overall business strategies, goals, and objectives as part of the company's strategic plan
- Strategic decisions are highly unstructured decisions, occurring in situations in which no procedures or rules exist to guide decision makers toward the correct choice
Enhancing Decision Making with MIS
- Operational support systems
- Transactional information encompasses all the information contained within a single business process or unit of work, and its primary purpose is to support the performance of daily operational or structured decisions
- Online transaction processing (OLTP) is the capture of transaction and event information using technology to
- process the information according to defined business rules
- store the information
- update existing information to reflect the new information
- Managerial support systems
- Analytical information encompasses all organizational information, and its primary purpose is to support the performance of managerial analysis or semi-structured decisions
- Online analytical processing (OLAP) is the manipulation of information to create business intelligence in support of strategic decision making
- Decision support systems (DSSs) model information using OLAP which provides assistance in evaluating and choosing among different courses of action
- Strategic support systems
- Executive information system (EIS) is a specialized DSS that supports senior-level executives and unstructured, long term, non routine decisions requiring judgement, evaluation, and insight
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| Interaction between TPS and DSS to Support Semi-structured Decisions |
The Future : Artificial Intelligence
- Artificial intelligence (AI) simulates human thinking and behaviour, such as the ability to reason and learn
- Intelligence systems are various commercial applications of artificial intelligence
- Expert systems are computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems
- Neural networks (artificial neural network) is a category of AI that attempts to emulate the way the human brain works
- Learning and adjusting to new circumstances on their own
- Lending themselves to massive parallel processing
- Functioning without complete or well-structured information
- Coping with huge volumes of information with many dependent variables
- Analyzing non linear relationships in information (they have been called fancy regression analysis systems)
- Fuzzy logic is a mathematical method of handling imprecise or subjective information
- Genetic algorithms is an artificial intelligence system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem
- Intelligent agents is a special-purpose knowledge-based information system that accomplishes specific tasks on behalf of its users
- Virtual reality is a computer-stimulated environment that can be a simulation of the real world or an imaginary world
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