mis chapter 4 information systems, management, and decision making

MIS- Chapter 4Information Systems, Management, and Decision Making

Filmon Habtemichael

The Role of Managers in Organizations

•Managers play a key role in organizations.

•Their responsibilities range from making decisions, to writing reports, to attending meetings, to arranging birthday parties.

• We can better understand managerial functions and roles by examining classical and contemporary models of managerial behavior.

A. Classical Descriptions of Management

• This description of management dominated management thought since 1920s, and it is still popular.

• The five classical functions of managers are planning, organizing, coordinating, deciding, and controlling.

• The terms do not address what managers do when they plan, decide things, and control the work of others. We need a more fine-grained understanding of how managers actually behave.

B. Behavioral Models

•Contemporary behavioral scientists have observed that managers do not behave as the classical model of management led us to believe.

•Behavioral models state that the actual behavior of managers, in classical management, appears to be less systematic, more informal, less reflective, more reactive, less well organized, and much more frivolous.

•Managerial behavior actually has five attributes that differ greatly from the classical description: ▫First, managers perform a great deal of work

at an unrelenting pace—studies have found that managers engage in more than 600 different activities each day, with no break in their pace.

▫Second, managerial activities are fragmented; most activities last for less than nine minutes; only 10 percent of the activities exceed one hour in duration.

▫Third, managers prefer current, specific, and ad hoc information(printed information often will be too old)

▫Fourth, they prefer oral forms of communication to written forms because oral media provide greater flexibility, require less effort, and bring a faster response.

▫Fifth, managers give high priority to maintaining a diverse and complex web of contacts that acts as an informal information system.

Managerial Roles•Analyzing managers’ day-to-day behavior,

there are a number of managerial roles.•Managerial roles are expectations of the

activities that managers should perform in an organization.

•These managerial roles fell into three categories: ▫interpersonal, ▫informational, and ▫decisional.

Interpersonal Roles • Figureheads -they represent their companies to the

outside world and perform symbolic duties such as giving out employee awards.

• Leaders- attempting to motivate, counsel, and support

subordinates.

• Liaison between various organizational levels; within each of these levels, they serve as a liaison among the members of the management team.

• Managers provide time and favors, which they expect to be returned.

Informational Roles•Managers act as the nerve centers of

their organization, receiving the most concrete, up-to-date information and redistributing it to those who need to be aware of it.

•Managers are, therefore, ▫information disseminators and ▫spokespersons for their organization.

Decisional Roles •Managers make decisions. They

▫Act as entrepreneurs by initiating new kinds of activities;

▫Handle disturbances arising in the organization;

▫Allocate resources to staff members who need them; and

▫Negotiate conflicts and mediate between conflicting groups in the organization.

2. Managers and Decision Making

•Decision making is often a manager’s most challenging role.

• Information systems have helped managers communicate and distribute information; however, they have provided only limited assistance for management decision making.

Decision Making

• Decision making can be classified by organizational level, as• Strategic decision making determines the objectives,

resources, and policies of the organization. • Decision making for management control is principally

concerned with how efficiently and effectively resources are used and how well operational units are performing.

• Operational control decision making determines how to carry out the specific tasks set forth by strategic and middle-management decision makers.

• Knowledge-level decision making deals with evaluating new ideas for products and services, ways to communicate new knowledge, and ways to distribute information throughout the organization.          

3.3 Managers, Decision Making, and Information Systems

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Levels of Decision Making

Operationalcontrol

Knowledge-level decision

making

Managementcontrol

Strategicdecisionmaking

•Within each of these levels of decision making, decisions are classified as ▫Structured and▫Unstructured

• Unstructured decisions: ▫ decision maker must provide judgment, evaluation, and insights

into the problem definition. ▫ Each of these decisions are novel, important, and non-routine,

and there is no well-understood or agreed-on procedure for making them.

• Structured decisions, by contrast, are repetitive and routine and involve a definite procedure for handling them so that they do not have to be treated each time as if they were new.

• Some decisions are semi-structured; in such cases, only part of the problem has a clear-cut answer provided by an accepted procedure.

Fig. 3-9: Different kinds of information systems at the various organization levels support different types of decisions.

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TPS

OAS MIS

KWS

DSS

ESS

ORGANIZATIONAL LEVELTYPE OFDECISION OPERATIONAL KNOWLEDGE MANAGEMENT STRATEGIC

STRUCTURED ACCOUNTS RECEIVABLE

ELECTRONIC PRODUCTIONSCHEDULING COST OVERRUNS

SEMI- BUDGETSTRUCTURED PREPARATION

PROJECTSCHEDULING

FACILITYLOCATION

UNSTRUCTURED PRODUCT DESIGN NEW PRODUCTSNEW MARKETS

Stages of Decision Making•There are four different stages in decision

making:▫ Intelligence,▫ Design, ▫ Choice, and▫ Implementation.

Intelligence:•It consists of identifying and

understanding the problems occurring in the organization—why the problem, where, and with what effects.

•Traditional MIS systems that deliver a wide variety of detailed information can help identify problems, especially if the systems report exceptions.

Solution Design•During solution design, the individual

designs possible solutions to the problems.

•Smaller DSS systems are ideal in this stage of decision making, because they operate on simple models, can be developed quickly, and can be operated with limited data.

Choice•Consists of choosing among solution

alternatives. •The decision maker might need a larger

DSS system to develop more extensive data on a variety of alternatives and complex models or data analysis tools to account for all of the costs, consequences, and opportunities

Solution Implementation•When the decision is put into effect,

managers can use a reporting system that delivers routine reports on the progress of a specific solution.

•Support systems can range from full-blown MIS systems to much smaller systems, as well as project-planning software operating on personal computers.

..cont•In general, the stages of decision making

do not necessarily follow a linear path•Decisions are often arrived at after a

series of iterations and evaluations at each stage in the process.

•The decision maker often must loop back through one or more of the stages before completing the process.

3.3 Managers, Decision Making, and Information Systems

Fig 3-10: The decision making process.

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3. Models of Decision Making•Individual Models of Decision Making•Organizational Models of Decision Making•Bureaucratic Models•Political Models•“Garbage Can” Model

Individual Models of Decision Making•The basic assumption - human beings are in

some sense rational. •The rational model of human behavior is built

on the idea that people engage in basically consistent, rational, value-maximizing calculations.

• Under this model, an individual identifies goals, ranks all possible alternative actions by their contributions to those goals, and chooses the alternative that contributes most to those goals.

Organizational Models of Decision Making•Decision making often is not performed by a

single individual but by entire groups or organizations.

•Organizational models of decision making take into account the structural and political characteristics of an organization.

•Bureaucratic, political, and even “garbage can” models have been proposed to describe how decision making takes place in organizations. We shall now consider each of these models.

Bureaucratic Models•Models of decision making where decisions

are shaped by the organization’s standard operating procedures (SOPs).

•An organization’s most important goal is the preservation of the organization itself.

•The reduction of uncertainty is another major goal.

cont•Policy tends to be incremental, only marginally

different from the past, because radical policy departures involve too much uncertainty.

•These models depict organizations generally as not “choosing” or “deciding” in a rational sense. Rather, according to bureaucratic models, whatever organizations do is the result of standard operating procedures (SOPs) honed over years of active use.

• Organizations rarely change these SOPs, because they may have to change personnel and incur risks (who knows if the new techniques work better than the old ones?).

• Although senior management and leaders are hired to coordinate and lead the organization, they are effectively trapped by the organization’s standard solutions.

• Some organizations do, of course, change; they learn new ways of behaving; and they can be led. But all of these changes require a long time. Look around and you will find many organizations doing pretty much what they did 10, 20, or even 30 years ago.

Political Models•Models of decision making where

decisions result from competition and bargaining among the organization’s interest groups and key leaders.

•  Power in organizations is shared; even the lowest-level workers have some power.

cont•In political models of decision making, what an

organization does is a result of political bargains struck among key leaders and interest groups.

•Organizations do not come up with “solutions” that are “chosen” to solve some “problem.”

•They come up with compromises that reflect the conflicts, the major stakeholders, the diverse interests, the unequal power, and the confusion that constitute politics.

“Garbage Can” Model:  • Model of decision making that states that

organizations are not rational and that decisions are solutions that become attached to problems for accidental reasons.

• A more recent theory of decision making, called the “garbage can” model, states that organizations are not rational.

• Decision making is largely accidental and is the product of a stream of solutions, problems, and situations that are randomly associated

4. Implications for System Design•Decision making is not a simple process.•Information systems do not make the

decision for humans but rather support the decision-making process.

•How this is done will depend on the types of decisions, decision makers, and frames of reference.

..cont•Decision making in organization is a

group and organizational process. •So, systems must be built to support

group and organizational decision making.

•As a general rule, information systems designers should design systems that have the following characteristics:

cont• They are flexible and provide many options for

handling data and evaluating information.• They are capable of supporting a variety of styles,

skills, and knowledge.• They are powerful in the sense of having multiple

analytical and intuitive models for the evaluation of data and the ability to keep track of many alternatives and consequences.

• They reflect understanding of group and organizational processes of decision making.

• They are sensitive to the bureaucratic and political requirements of systems.