Chapter 13- Information and Decision
What is useful information?
Data are raw facts and observations
o Data DOES NOT EQUAL INFORMATION
Information is data made useful and meaningful for decision making
o Data would be demographics of who buys CDs, but INFORMATION would mean
changing your advertising because younger customers mostly buy through the internet
and they are your target market
Information is only truly useful if its matches these five criteria
o Timely – The information is available when needed
o High Quality – Accurate and reliable info
o Complete – Info is complete and sufficient for the task at hand ; current and up to date
o Relevant – free from extraneous or irrelevant materials
o Understandable – the information is clear and easily understood by the user, free from
Information Technology helps us acquire, store, and process information
How IT is Changing Organizations
Information Systems uses the latest in IT to collect, organize, and distribute data in such a way
that it becomes meaningful information.
Management Information Systems (MIS) meet the specific information needs of managers as
they make a variety of day-to-day decisions
o Ex: MIS system that monitors more than 500 aspects of organizational performance,
such as billing accuracy, arrival times, driver satisfaction, etc.
It offers many advantages:
o Planning Advantages of IT - better and more timely access to useful information,
involving more people in the planning process
o Organizing – more ongoing and informed communication, improving coordination and
o Leading – more frequent and better communication with staff and diverse stakeholders,
keeping objectives clear
o Controlling – immediate measures of performance results, allowing real-time solutions
to problems Managers As Problem Solvers
Problem solving is the process of identifying a discrepancy between an actual and a desired
state of affairs, and then taking action to resolve it.
A decision is a choice among possible alternative courses of action
Seriously? The word decision has been used a total of 429 times previously, and just now they explain this basic word?
In systematic thinking, a person approaches problems in a rational, step by step, and analytical
fashion. This type of thinking breaks a complex problem into smaller components and then
addresses them in a logical and integrated fashion.
Intuitive thinking approaches problems in a flexible and spontaneous way, and may also be
quite creative. This type of thinking allows a person to respond imaginatively to a problem
based on a quick and broad evaluation of the situation and the possible alternative course of
action. This approach best works in situations where facts are limited and few decisions exist.
To deal with multiple interrelated issues, Managers use multidimensional thinking. It is an
ability to address many problems at once, in relationship to one another and across both long
and short time horizons.
In strategic opportunism, managers are able to focus on long-term objectives while being
flexible in dealing with short term problems and opportunities in a timely manner.
Structured Problems – straightforward and clear with respect to information needs.
o Because these problems are routine and occur over and over, they can be dealt with
using programmed decisions that use solutions already available from past experience
Unstructured Problems have ambiguities (inexactness, being open to more than one
interpretation) and information deficiencies (risk environments)
o These problems require non-programmed decisions that applies a specific solution
crafted for a unique problem
An extreme type of non-programmed decision occurs in times of crisis – an unexpected problem
that can lead to disaster if not resolved quickly and appropriately. Examples can be anything
from Terrorism in a post 9/11 world, IT failures, security breaches, ethical scandals and
o Some organizations engage in formal crisis management programs. They are designed
to help managers and others prepare for unexpected high-impact events that threaten
an organizations health and well-being.
There are 3 decision conditions or environments: certainty, risk and uncertainty
Certain Environment – ideal situation where factual information is available on all alternative
courses of action, and their consequences. The decision is the easiest to make , you study the
alternatives and pick the best solut