MGC1010 Lecture Notes - Lecture 6: Rationality, Representativeness Heuristic, Groupthink
30 May 2018
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MGC1010 Week 6 - Decision Making
Information and Information Systems
● Data: quantified measured values, observations and statistical counts that, when
collated, become useful for decision making
● Information systems: use information technology to collect, organise and distribute
data for use in decision-making
○ Having updated information systems and software would be beneficial for
organisations
○
● Five essential characteristics of useful information:
1. Timeliness
2. Quality
3. Completeness
4. Relevance
5. Understandability
Information Needs of an Organisation
● Important to manage relationships with stakeholders using information collected from
the external environment
● Need to provide public information to the external environment
● Companies with comparative advantage are those who have transparent information
sharing throughout the company, both horizontally and vertically.
find more resources at oneclass.com
find more resources at oneclass.com
○ Need to be able to quickly access the actions of competitors, consumer needs,
and internal information
Big Data - The New Competitive Advantage
● Torrent of data flooding our world, and the sheer volume of data generated, stored,
and mined for insights, has become economically relevant to business
5 Ways to Leverage Big Data
1. Unlocking significant value and efficiencies by making information transparent
2. Creation and storage of transactional data (i.e. product inventories, sick days) can
expose variability and boost performance
3. Narrow segmentation of customers -> tailored service
4. Improved decision making process, minimising risks, and unearhing insights
5. Using data to develop next-gen products and services
a. Know what consumers want/ don’t want
How Does Big Data Help?
● Bristol-Myers Squibb, a global pharmaceutical company, reduced the time to took to
run clinical trials by 98% by using Amazon Web Services
○ Length of clinical studies were reduced from 2.5 years to 1.7 years (average);
and study cost savings of $500,000 per study
● Xerox Corporation - uses big data to reduce attrition (inefficiency) rate among call
centre workers by 20% (Walker, 2012)
○ Spends avg $5,000 per training per employee
○ Hires over 48,0000 employees in call centres
○ Through big analysis, discovered that creative types (personality) tend to
stay for more than 6 months, but inquisitive people often don’t
○ Now uses software for hiring decisions
Knowledge Management and Organisational Learning
● Knowledge Management is the process through which organisations use intellectual
capital for competitive advantage
● The intellectual assets include things such as: patents, intellectual property rights,
trade secrets and special processes/methods, and accumulated knowledge and
understanding of the entire workforce
○ Will dictate competitive advantage
○ Need to protect intellectual assets to protect competitive advantage
● Explicit knowledge is codified and shared with others through dialogue,
demonstration or media
○ Make the most of staff in the right positions (managerial or not)
● Learning organisation continuously changes and improves sing the lessons of
experience; Core ingredients:
1. Mental models
a. Set aside traditional models/methods to be able to modify and learn
2. Personal mastery
a. Aim to be self aware and open to opinions of others
3. Systems thinking
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Data: quantified measured values, observations and statistical counts that, when collated, become useful for decision making. Information systems: use information technology to collect, organise and distribute data for use in decision-making. Having updated information systems and software would be beneficial for organisations. Five essential characteristics of useful information: timeliness, quality, completeness, relevance, understandability. Important to manage relationships with stakeholders using information collected from the external environment. Need to provide public information to the external environment. Companies with comparative advantage are those who have transparent information sharing throughout the company, both horizontally and vertically. Need to be able to quickly access the actions of competitors, consumer needs, and internal information. Torrent of data flooding our world, and the sheer volume of data generated, stored, and mined for insights, has become economically relevant to business. Bristol-myers squibb, a global pharmaceutical company, reduced the time to took to run clinical trials by 98% by using amazon web services.
