There are different types of decision, they include programmed decision and a non-programmed decision. There are different models for decision making such as classical economic model,administrative model and Herbert Simons model of decision making.  For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/welingkarshybridDlp Join us on Facebook: http://www.facebook.com/welearnindia Follow us on Twitter: https://twitter.com/WeLearnIndia Read our latest blog at: http://welearnindia.wordpress.com Subscribe to our Slideshare Channel: http://www.slideshare.net/welingkarDLP

1. Welingkar’s Distance Learning Division
I.T. for Management
CHAPTER-9
Role of information in
Decision making
We Learn – A Continuous Learning Forum

2. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Conceptual model of Decision Making
• Managers deal with problems posing threats and
offering opportunities.
• Managers can be problem avoiders, problem solvers, or
problem seekers.
• Managers display systematic and intuitive problem-
solving styles.
• Managers make decisions under conditions of certainty,
risk, and uncertainty.
• Managers solve problems with programmed and non
programmed decisions.
We Learn – A Continuous Learning Forum

3. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Types of Decision
• Certain Environment
• offers complete information on possible action
alternatives and their consequences.
• Risk Environment
• lacks complete information but offers probabilities of
the likely outcomes for possible action alternatives.
• Uncertain Environment
• lacks so much information that it is difficult to assign
probabilities to the likely outcomes of alternatives.
We Learn – A Continuous Learning Forum

4. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Types of Decision
• Decision
• a choice among possible alternative courses of
action.
• Programmed Decision
• applies a solution from past experience to a routine
problem.
• Non programmed Decision
• applies a specific solution crafted for a unique
problem.
We Learn – A Continuous Learning Forum

5. Welingkar’s Distance Learning Division
Role of Information in Decision Making
We Learn – A Continuous Learning Forum

6. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Conceptual model of Decision making
Classical Economic model
This nominative model is based on the following
assumptions:
• All decisions and outcomes are completely known
• The model states that the decision maker always seeks
to maximize profit or utility
• The decision maker is infinitely sensitive to difference in
utility among outcome
• Decision making in the business context is nothing but a
set of tradeoffs
We Learn – A Continuous Learning Forum

7. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Conceptual model of Decision making
Administrative model
It works on the concept of bounded rationality
It assumes that the decision maker
• Does not know all the alternatives and outcomes
• Makes a limited search to discover a few satisfactory
alternatives
• Makes a decision which satisfies his or her aspiration
The decision maker has to do a balancing act
between the conflicting trade-off’s
We Learn – A Continuous Learning Forum

8. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Conceptual model of Decision making
• Human expectations and decision making
• Humans display a variety of responses in decision-making
• Anticipatory regret is a psychological response to alternatives,
it inhibits the decision maker from making a decision without
contemplating the consequences.
• Decision making under psychological stress
• This concept is important to the design of information
systems, because a decision support system to be used under
conditions of decision conflict & may not effective unless it
takes care of behavior under psychological stress
We Learn – A Continuous Learning Forum

9. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Conceptual model of Decision making
Herbert Simons model of decision making
This model divides the process into 3 phases
• Intelligence phase
• Searching the environment conditions calling for decision
data inputs are obtained ,processed & examined for clues
that may identify problems or opportunities
• Design phase
• Inventing ,developing possible course of actions
• Choice phase
• Selecting one of alternative, or course of actions
We Learn – A Continuous Learning Forum

10. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Herbert Simons model of decision making
We Learn – A Continuous Learning Forum

11. Welingkar’s Distance Learning Division
Role of Information in Decision Making
Herbert Simons model of decision making
• Step 1 is to identify and define the problem.
• Step 2 is to generate and evaluate alternative
courses of action.
• Step 3 is to decide on a preferred course of
action.
• Step 4 is to implement the decision.
• Step 5 is to evaluate results.
We Learn – A Continuous Learning Forum

12. Welingkar’s Distance Learning Division
Determining Information Need
Data Flow Methods
End of Chapter 9
We Learn – A Continuous Learning Forum