Copyright © Cengage Learning. All rights reserved.

How Can Information Reduce Risk When Making a Decision?

• Information produces knowledge and empowers managers and employees to make better decisions

• The relationship between information and risk

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Copyright © Cengage Learning. All rights reserved.

How Can Information Reduce Risk When Making a Decision? (cont’d)

• Information rules– Information rules based on situational experience

provide guidance in handling similar situations or circumstances

– Business research continuously looks for new rules since business conditions are always changing

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Copyright © Cengage Learning. All rights reserved.

How Can Information Reduce Risk When Making a Decision? (cont’d)

• The difference between data and information– Data

• Numerical or verbal descriptions that usually result from some sort of measurement

– Information• Data presented in a form that is useful for a specific purpose

– Database• A single collection of data stored in one place that can be used

by people throughout an organization to make decisions– Knowledge management (KM)

• A firm’s procedures for generating, using, and sharing the data and information contained in the firm’s databases

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