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Chapter 13

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Global Management Studies
GMS 200
Sui Sui

GMS200 SUI SUI CHAPTER 13: INFORMATION AND DECISION MAKING Chapter 13 Study Questions  What is the role of information in the management process?  How do managers use information to make decisions?  What are the steps in the decision-making process?  What are the current issues in managerial decision making? Study Question 1:What is the role of information in the management process?  Information and knowledge — basic linkages:  Knowledge and knowledge workers provide a decisive competitive factor in today’s economy.  Knowledge worker. o Someone whose value to the organization rests with intellect, not physical capabilities.  Intellectual capital. o Shared knowledge of a workforce that can be used to create wealth.  Information and knowledge — basic linkages (cont.)  Knowledge and intellectual capital are irreplaceable organizational resources.  The productivity of knowledge and knowledge workers depends on: o Computer competency. o Information competency.  What is useful information?  Data: raw facts and observations.  Information: data made useful for decision making.  Information drives management functions.  Characteristics of useful information: o Timely. o High quality. o Complete. o Relevant. o Understandable. Figure 13.1 Internal and external information needs of an organization  Implications of IT within organizations:  Facilitation of communication and information sharing.  Operating with fewer middle managers.  Flattening of organizational structures.  Faster decision making.  Increased coordination and control. GMS200 SUI SUI CHAPTER 13: INFORMATION AND DECISION MAKING  Implications of IT for relationships with external environment:  Helps with customer relationship management.  Helps organizations with supply chain management.  Helps in monitoring outsourcing and other business contracts. Figure 13.2 Information technology is breaking barriers and changing organizations  Information needs of organizations.  Information exchanges with the external environment: o Gather intelligence information. o Provide public information.  Information exchanges within the organization: o Facilitate decision making. o Facilitate problem solving.  Basic information system concepts:  Information system. o Use of the latest IT to collect, organize, and distribute data for use in decision making.  Management Information System (MIS). o Specifically designed to meet the information needs of managers in daily decision making. Study Question 2: How do managers use information to make decisions?  Managerial advantages of IT utilization:  Planning advantages. o Better and more timely access to useful information. o Involving more people in planning.  Organizing advantages. o More ongoing and informed communication among all parts of the organization. o Improved coordination and integration.  Leading advantages. o Improved communication with staff and stakeholders. o Keeping objectives clear.  Controlling advantages. o More immediate measures of performance results. o Allows real-time solutions to performance problems. Figure 13.3 The manager as an information-processing nerve center. GMS200 SUI SUI CHAPTER 13: INFORMATION AND DECISION MAKING  A performance deficiency  Actual performance being less than desired performance.  A performance opportunity  Actual performance being better than desired performance.  Problem solving  The process of identifying a discrepancy between actual and desired performance and taking action to resolve it.  A decision: choice among possible alternative course of action  Problem-solving approaches or styles:  Problem avoiders. o Inactive in information gathering and solving problems.  Problem solvers. o Reactive in gathering information and solving problems.  Problem seekers. o Proactive in anticipating problems and opportunities and taking appropriate action to gain an advantage.  Systematic versus intuitive thinking.  Systematic thinking approaches problems in a rational, step-by-step, and analytical fashion.  Intuitive thinking approaches problems in a flexible and spontaneous fashion.  Multidimensional thinking applies both intuitive and systematic thinking.  Effective multidimensional thinking requires skill at strategic opportunism.  Cognitive styles.  Sensation Thinkers emphasize the impersonal rather than the personal and take a realistic approach to problem solving.  Intuitive Thinkers are comfortable with abstraction and tend to be idealistic. spontaneous fashion.  Intuitive Feelers prefer broad and global issues and are comfortable with intangibles.  Sensation Feelers emphasize analysis and human relations and tend to be realistic and prefer facts.  Programmed decisions.  Apply solutions that are readily available from past experiences to solve structured problems.  Structured problems are ones that are familiar, straightforward, and clear with respect to information needs.  Best applied to routine problems that can be anticipated. GMS200 SUI SUI CHAPTER 13: INFORMATION AND DECISION MAKING  Nonprogrammed decisions.  Develop novel solutions to meet the demands of unique situation that present unstructured problems.  Unstructured problems are ones that are full of ambiguities and information deficiencies.  Commonly faced by higher-level management.  Crisis decision making.  A crisis involves an unexpected problem that can lead to disaster if not resolved quickly and appropriately.  Rules for crisis management: o Figure out what is going on. o Remember that speed matters. o Remember that slow counts, too. o Respect the danger of the unfamiliar. o Value the skeptic. o Be ready to ―fight fire with fire.‖  Decision e
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