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Characteristics of Decision Making
- -Groupthink
- -Evaluating what-if scenarios
- -Experimentation with a real system!
- -Changes in the decision-making environment may occur continuously
- -Time pressure on the decision maker
- -Analyzing a problem takes time/money
- -Insufficient or too much information
- -Better decisions
- -Tradeoff: accuracy versus speed
- -Fast decision may be detrimental
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Decision Making
- -A process of choosing among two or more alternative courses of action for the purpose of attaining a goal(s)
- -Managerial decision making is synonymous with the entire management process - Simon (1977)
- -e.g., Planning
- -What should be done? When? Where? Why? How? By whom?
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Phases of the decision process
- Phase (1) Intelligence
- Phase (2) Design
- Phase (3) Choice, and
- Phase (4) Implementation
- -(1)-(4): problem solving; (3): decision making
- -(1)-(3): decision making; (4): problem solving
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Decision-making styles
- -Heuristic versus Analytic
- -Autocratic versus Democratic
- -Consultative (with individuals or groups)
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Decision Makers
- -Small organizations
- -Individuals
- -Conflicting objectives
- -Medium-to-large organizations
- -Groups
- -Different styles, backgrounds, expectations
- -Conflicting objectives
- -Consensus is often difficult to reach
- -Help: Computer support, GSS, ...
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Model
- -A significant part of many DSS and BI systems
- -A model is a simplified representation (or abstraction) of reality
- -Often, reality is too complex to describe
- -Much of the complexity is actually irrelevant in solving a specific problem
- -Models can represent systems/problems at various degrees of abstraction
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Models can be classified based on their degree of abstraction; type of models:
- -Iconic models (scale models) – physical replica like a bridge
- -Analog models – such as organization chart
- -Mental Models – descriptive, such as cognitive map
- -Mathematical (quantitative) models
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The Benefits of Models
- -Ease of manipulation
- -Compression of time
- -Lower cost of analysis on models
- -Cost of making mistakes on experiments
- -Inclusion of risk/uncertainty
- -Evaluation of many alternatives
- -Reinforce learning and training
- -Web is source and a destination for it
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Phases of Decision-Making Process
- -Humans consciously or sub consciously follow a systematic decision-making process - Simon (1977)
- 1. Intelligence
- 2. Design
- 3. Choice
- 4. Implementation
- 5. (?) Monitoring (a part of intelligence?)
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Decision-Making: Intelligence Phase: 4 steps
- -1. Problem Identification
- -2. Problem Classification
- -Classification of problems according to the degree of structuredness
- -3. Problem Decomposition
- -Often solving the simpler subproblems may help in solving a complex problem
- -Information/data can improve the structuredness of a problem situation
- -4. Problem Ownership
- -Outcome of intelligence phase: A Formal Problem Statement
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Decision-Making: The Design Phase
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Decision-Making: The Choice Phase
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Decision-Making: The Implementation Phase
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