Chapter 12: Enhacing Decision Making

Question 1

Balanced Scorecard Method

Answer 1

Framework for operationalizing a firms strategic plan by focusing on measurable financial, business process, customer, and learning and growth outcomes of firm performance.

Question 2

Behavioral Models

Answer 2

Descriptions of management based on behavioral scientists’ observations of what managers actually do in their jobs.

Question 3

Business Performance Management (BPM)

Answer 3

Attempts to systematically translate a firm’s strategies (e.g., differentiation, low-cost producer, market share growth, and scope of operation) into operational targets.

Question 4

Choice

Answer 4

Simon’s third stage of decision making, when the individual selects among the various solution alternatives.

Question 5

Classical Model of Management

Answer 5

Traditional description of management that focused on its formal functions of planning, organizing, coordinating, deciding, and controlling.

Question 6

Data Visualization

Answer 6

Technology for helping users see patterns and relationships in large amounts of data by presenting the data in graphical form.

Question 7

Decisional Role

Answer 7

Mintzberg’s classification for managerial roles where managers initiate activities, handle disturbances, allocate resources, and negotiate conflicts.

Question 8

Design

Answer 8

Simon’s second stage of decision making, when the individual conceives of possible alternative solutions to a problem.

Question 9

Drill-Down

Answer 9

The ability to move from summary data to lower and lower levels of detail.

Question 10

Geographic Information Systems (GIS)

Answer 10

System with software that can analyze and display data using digitized maps to enhance planning and decision-making.

Question 11

Group Decision-Support Systems (GDSS)

Answer 11

An interactive computer-based system to facilitate the solution to unstructured problems by a set of decision makers working together as a group.

Question 12

Implementation

Answer 12

All the organizational activities surrounding the adoption, management, and routinization of an innovation, such as a new information system.

Question 13

Informational Role

Answer 13

Mintzberg’s classification for managerial roles where managers act as the nerve centers of their organizations, receiving and disseminating critical information.

Question 14

Intelligence

Answer 14

The first of Simon’s four stages of decision making, when the individual collects information to identify problems occurring in the organization.

Question 15

Interpersonal Role

Answer 15

Mintzberg’s classification for managerial roles where managers act as figureheads and leaders for the organization.

Question 16

Intelligence

Answer 16

The first of Simon’s four stages of decision making, when the individual collects information to identify problems occurring in the organization.

Question 17

Key Performance Indicators (KPI)

Answer 17

Measures proposed by senior management for understanding how well the firm is performing along specified dimensions.

Question 18

Managerial Roles

Answer 18

Expectations of the activities that managers should perform in an organization.

Question 19

Pivot Table

Answer 19

Spreadsheet tool for reorganizing and summarizing two or more dimensions of data in a tabular format.

Question 20

Predictive Analytics

Answer 20

The use of data mining techniques, historical data, and assumptions about future conditions to predict outcomes of events, such as the probability a customer will respond to an offer or purchase a specific product.

Question 21

Semistructured Decisions

Answer 21

Decisions in which only part of the problem has a clear-cut answer provided by an accepted procedure.

Question 22

Sensitivity Analysis

Answer 22

Models that ask “what-if” questions repeatedly to determine the impact of changes in one or more factors on the outcomes.

Question 23

Structured Decisions

Answer 23

Decisions that are repetitive, routine, and have a definite procedure for handling them.

Question 24

Unstructured Decisions

Answer 24

Nonroutine decisions in which the decision maker must provide judgment, evalutation, and insights into the problem definition; there is no agreed-upon procedure for making such decisions.

Question 25

What are the different types of decisions and how does the decision-making process work?

Answer 25

The different levels in an organization (strategic, management, operational) have different decision-making requirements. Decisions can be structured, semistructured, or unstructured, with structured decisions clustering at the operational level of the organization and unstructured decisions at the strategic level. Decision making can be performed by individuals or groups and includes employees as well as operational, middle, and senior managers. There are four stages in decision making: intelligence, design, choice, and implementation. System to support decision making do not always produce better manager and employee decisions that improve firm performance because of problems with information quality, management filters, and organizational culture.

Question 26

How do information systems support the activities of managers and management decision making?

Answer 26

Early classical models of managerial activities stress the functions of planning, organizing, coordinating, deciding, and controlling. Contemporary research looking at the actual behavior of managers has found the managers' real activities are highly fragmented, variegated, and brief in duration and that managers shy away from making grand, sweeping policy decisions. Information technology provides new tools for managers to carry out both their traditional and newer roles, enabling them to monitor, plan, and forecast with more precision and speed than ever before and to respond more rapidly to the changing business environment. Information systems have been most helpful to managers by providing support for their roles in disseminating information, providing liaisons between organizational levels, and allocating resources. however, information systems are less successful at supporting unstructured decisions. Where information systems are useful, information quality, management filters, and organizational culture can degrade decision making.

Question 27

How do business intelligence and business analytics support decision making?

Answer 27

Business intelligence and analytics promise to deliver correct, nearly real-time information to decision makers, and the analytic tools help them quickly understand the information and take action. A business intelligence environment consists of data from the business environment, the BI infrastructure, a BA toolset, managerial users and methods, a BI delivery platform (MIS, DSS, or ESS), and the user interface. There are six analytic functionalities that BI systems deliver to achieve these ends: predefined production reports, parameterized reports, dashboards and scorecards, ad hoc queries and searches, the ability to drill down to detailed views of data, and the ability to model scenarios and create forecasts.

Question 28

How do different decision-making constituencies in an organization use business intelligence?

Answer 28

Operational and middle management are generally charged with monitoring the performance of their firm. Most of the decisions they make are fairly structured. Management information systems (MIS) producing routine production reports are typically used to support this type of decision making. For making unstructured decisions, middle managers and analysts will use decision-support systems (DSS) with powerful analytics and modeling tools, including spreadsheets and pivot tables. Senior executives making unstructured decisions use dashboards and visual interfaces displaying key performance information affecting the overall profitability, success, and strategy of the firm. The balanced scorecard and business performance management are two methodologies used in designing executive support systems (ESS).

Question 29

What is the role of information systems in helping people working in a group make decisions more efficiently?

Answer 29

Group decision-support systems (GDSS) help people working together in a group arrive at decisions more efficiently. GDSS feature special conference room facilities where participants contribute their ideas using networked computers and software tools for organizing ideas, gathering information, making and setting priorities, and documenting meeting sessions.