Chapter 11 – Managerial Support
MANAGERS AND DECISION MAKING – management is a process by which organization
achieves its goals through the use of resources. The resources are inputs and goals are the
outputs. Managers’ success is the ratio between inputs and outputs which indicates his
The Manager’s Job and Decision Making – managers have three basic roles
- Interpersonal roles
- Informational roles
- Decisional roles
Recently IS have been developed that support all three roles. A decision consists of
intelligence, design, and choice. The intelligence phase examine a situation and identify the
problem. In the design phase, a model is constructed to simplify the problem. And choice phase
is selecting a solution.
Why Managers Need IT Support – they need it to make a good decision and IT support
ensures it. Decision making is affected due to the following trends:
• The number of alternatives is increasing due to technology making it hard to explore
• Decisions are increasingly made under time pressure. Processing of information
sometimes cannot be done fast enough
• A sophisticated analysis needs to be conducted to make a good decision which also
• While it is easy to communicate over large distances, bringing people together for
decision-making could be hard.
What Information Technologies Are Available to Support Managers? – These technologies
are called business intelligence (BI) systems. They are related to data warehousing.
A Framework for Computerized Decision Analysis – two major dimensions of BI systems
• Problem structure – structured decisions are routine problems for which solutions
exist, for e.g. minimizing costs. Unstructured decisions are ones that are complex and
there are not simple solutions. Human intuition often plays the resolving role, for e.g.
hiring, and choosing new offerings. Semi-structured problems are for which some
processes are structured. Examples are evaluating employees, marketing budgets etc.
• The nature of Decisions – these are be categorized into o Operational control – execution of tasks efficiently
o Management control – acquiring and using resources efficiently
o Strategic planning – long-range plans for growth and resource allocation
• The Decision Matrix – the three classes of problems and three broad categories of the
nature of decision can be combined to form a matrix. Lower-level managers perform the
structured operations and middle and professionals are in charge of the unstructured
BUSINESS INTELLIGENCE – data that has been organized in data warehouses can be further
analyzed. BI systems help make better business decisions. Vendors offer such software under
BI software. BI applications provide data analysis tools and easily accessing information in a
structured format. Organizations use BI application to improve their performance. Corporate
performance management (CPM) is the area of business intelligence involved with monitoring
and managing an organization’s performance according to key performance indicators.
Multi-dimensional Data Analysis (Online Analytical Processing) – OLAP is analyzing
complex data stored in data warehouses. Multidimensional analysis provides the analysts with a
detailed view of a situation. This allows to quickly answer business questions.
Data Mining – searching for valuable business information in a large database, warehouse or
data mart. This can help to predict trends and identifying previously unknown patterns. While
multi-dimensional analysis helps us understand what is happening, data mining helps us
understand WHY it is happening and makes predictions about the future. For e.g. a stolen card
used somewhere other than the normal places of shopping or not sending special offers to
customer who have consistently not responded before etc.
Decision Support Systems – DSS combine models and data to solve semi-structured and
some unstructured problems. DSS employ mathematical models. Their capabilities are:
• Sensitive analysis – study of the impact that change in one part of a decision making
model has on other parts. Allows system to adapt to