topic 1 human and managerial decison making

8/7/2019 Topic 1 Human and Managerial Decison Making

1/21

1

CBSS 4103

DECISION SUPPORT SYSTEMS

TOPIC 1 : HUMAN AND MANAGERIALDECISION MAKING

NORYANTI BT HUSSIN

019 - [email protected]

OPEN UNIVERSITY MALAYSIA,

JLN IBRAHIM SULTAN , 80300 JOHOR BAHRU


2/21

2

OBJECTIVES

1. Discuss what decision making is and

how managers make decisions.

2. Describe the processes of decision

making.

3. Discuss and distinguish four

categories of decision styles.

4. Express decision effectiveness.

5. Apply a decision support system to

solve a specific type of problem.




3/21

3

1.1 INTRODUCTION TO DECISION MAKING



A decision refers to a conclusion or a

reasoned choice among alternatives.

We make a number of decisions,

personal decisions as well as businessdecisions in our live.

Each decision is constructed by adecision statement, a collection ofalternative and a collection of criteria.

A decision usually involves three steps(Arsham, 2005)

1. A recognition of a need

2. A decision to change

3. A conscious dedication to

implement the decision


4/21

4

Decision making types may allow foronly three unique systems of making

decisions (Arsham, 2005)

1. INDIVIDUALISM

Which access inequity, relishes

competition and identifies with the rightsand power of the individual.

2. COLLABORATION

Which treats all men as equally important,

exalts collaborative efforts, and identifieswith unlimited democracy.

3. POWER AND AUTHORITY

Which respects power and identifies with

controlling authority



Decision making is a process ofreasoning among alternatives that are

available for the purpose of

accomplishing a purpose or purposes(Turban, 2005)

Decision making is the study of

identifying and choosing alternativesbased on the values and preferences

of the decision maker and the processof sufficiently reducing uncertainty anddoubt about alternative to allow a

reasonable choice to be made from

among them(Haris, 1998)

Alternative refer to possible decisions

that can be made


5/21

5

TYPES OF DECISIONS (Harris, 1998)

1. DECISIONS WHETHER

Include the yes/no, either/or

decision that must be made before

selecting an alternative. Should I

buy a new car?. In order to make

this kind of decision, the pro and con

have to be weight.

2. DECISIONS WHICH

Involve a choice of one or more

alternative from among possibilities. The

chosen alternatives are based on how

well each alternative match a set ofpredefined criteria

3. CONTINGENT DECISIONS

Decision that have been made but put on

hold until some conditions are met. For

instance, I have decided to buy a car if I



In some situations, there are fewalternatives and in other situations

there are thousands.

In making a decision, we may want tooptimize the decision-making criteria.

However, it is impossible to optimize all

criteria at the same time. Thus thedecision maker has to reach acompromise.


6/21

6

1.2 MANAGERS AND DECISION MAKING

Table 1.1 : Mintzbergs 10 Management RolesOPEN UNIVERSITY MALAYSIA,


Interpersonal

Figurehead Symbolic head, responsible to perform several routine duties ofa legal or social nature.

Leader Responsible to motivate and active the subordinates as well asresponsible for staffing, training and associated duties.

Liaison Maintain self-developed network of outside contacts andinformers who provide favours and information.

Informational

Monitor Seeks and receives a wide variety of special information todevelop a through understanding of the organization andenvironment, emerge as the nerve center of the organizationsinternal and external information.

Disseminator Transmits information received from outsiders or fromsubordinates to members of the organizations internal andexternal information

Spokesperson Transmits information to outsiders on the organisations plans,policies, actions, result and others, also servers as an expert onthe organisations industry.

Decisional

Entrepreneur Searches the organisation and its environment for opportunitiesand initiates improvement projects to bring about change,

supervises design of certain project

DisturbanceHandler

Responsible for corrective action when the organisation facesimportant unexpected disturbances.

Resource Allocator Responsible for the allocation of organisational resources of allkind in effect the making or approving of all significantorganisational decisions.

Negotiator Responsible for representing the organisation at majornegotiation


7/21

7

Four categories of organisational decisions

1. STRATEGIC PLANNING is made at upper levels of

organisations management, and the decision made affect

the entire organisations.It involves making decisions in

determining objectives, establishing policies, allocating

resources, controlling organisational performance and

evaluating investment.

2. MANAGEMENT CONTROL or tactical decision, which is made

by middle managers, includes decision processes related to

acquisition and use of resources. It affects a part of the

organisation for a limited time into the future.

3. OPERATIONAL CONTROL includes decisions associated with

the effectiveness of organisational actions, monitoring the

quality of product/service and assessing the needs of

product/service.

4. OPERATIONAL PERFORMANCE involve making day to day

decisions in functional units. The decisions are made toimplement strategic decisions, functional tactics and

operational activities.




8/21

8

1.3 DECISION MAKING PROCESS



There is a continuous flow from one phase

to another. However, at any phase theremay be a return to a previous phase. Every

decision should involve all the phases, at

least minimally. The emphasis on eachphase differs from one decision to anotherdue to the following reasons:-

i. The nature of a decision may

requires a decision maker to

spend more time in one phase

or another.

ii. A decision maker may emphasise

on one phase or another,depending on his/her styles of

behaviour.


9/21

9

The Intelligence Phase



The intelligence phase is the first phase in

the decision making process.

Generally, a decision maker has to identifyand define the problem or situation thatrequires a decision.

The scanning activity may be doneperiodically or continuously.

In order to perform the activity, the

decision maker has to review

organisational objectives, search and scanprocedures, and gather relevant data.

This phase also includes the understandingof why the problem occurs, where ithappens and with what effects(Laudon and

Laudon, 1999).

The end product of this phase is a problem

statement.


10/21

10

The Design Phase



Generally, design phase involves

developing and analysing possible coursesof action to solve a problem.

In this phase, proposed solutions to theproblem or alternatives are developed.

A decision maker needs to do a lot ofresearch for each available alternative.

The objectives of the decision that is about

to be made should be clear and well

defined.


11/21

11

The Choice Phase



The choice phase is the critical phase in

decision making process, where in thisphase a decision maker actually makes a

decision.

This phase includes the search, evaluation

and recommendation of a satisfactory

solution to the model built in the design

phase.

The end product of this phase is a decisionthat can be implemented.


12/21

12

1.4 DECISION STYLES



Decision style describes the manners in

which a decision maker makes decision.

The style is reflected in the way theindividual reacted to decision makingtasks, which aspect is important, which

one is of less value, how information is

translated and how to deal with situations.

The effect of decision styles on a decision

outcome depends on the problem context,the decision makers perceptions andpersonal set of values that he/she brings to

the situation.


13/21

13

Decision Style Model



The scheme classifies decision style

using two component parts, cognitivecomplexity and value orientation.

These two parts are further used todistinguish four well defined categories

of decision styles, analytical, directive,

conceptual and behavioural.


14/21

14

1.5 DECISION EFFECTIVENESS



Decision effectiveness refers to the

successfulness in producing the desired orintended decision.


15/21

15

1.6 A FRAMEWORK FOR DECISIONSUPPORT



A framework for decision support was

proposed by Gorry and Scott Morton(1971)after combining the work of Simon (1977)

and Anthony (1965).


16/21

16

Decision Support Framework




17/21

17

1.7 DECISION MAKING PROCESS VS. DSSSUPPORT



A DSS cannot replace a decision maker.

It is not meant to support all the aspects

that need to be addressed in the decisionmaking process.

However a DSS can provide the decisionmaker with focused support to one or moreactivities within the process of decisionmaking.


18/21

18

DSS support




19/21

19

DSS Technologies that can be used to supportthe Intelligence Phase



a) Support for the Intelligence

Phase

The areas of support for the

intelligence phase are :-- To identify problems and to

opportunities.

- To interpret information.

- To produce reports.


20/21

20

DSS Technologies that can be used to supportthe Design Phase



b) Support for the Design Phase


intelligence phase are :-

- To generate alternative- To discuss criteria of choice.

& their relative importance

- To forecast the future.

consequences using various

alternatives.


21/21

21

DSS Technologies that can be used to supportthe Choice Phase



c) Support for the Choice Phase


choice phase is to identify

satisfactory alternatives.

topic 1 human and managerial decison making

Documents