Chapter 13: Summary Back to Contents
 
1.
 Describe different types of decisions and the decisionmaking process.

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. Systems 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 inertia.

2. Evaluate the role of information systems in helping people working individually and in a group make decisions more efficiently.

Specialized systems for business intelligence are specifically designed to help managers and employees make better decisions. Business intelligence includes management information systems (MIS), decisionsupport systems (DSS), group decision-support systems (GDSS), and executive support systems (ESS) and makes use of data from enterprise applications and technologies such as data mining and online analytical processing (OLAP).

           Management information systems (MIS) provide information on firm performance to help managers monitor and control the business, often in the form of fixed, regularly scheduled reports based on data summarized from the firm’s transaction processing systems. MIS support structured decisions and some semistructured decisions.

           Decision-support systems (DSS) combine data, sophisticated analytical models and tools, and user-friendly software into a single powerful system that can support semistructured or unstructured decision making. The components of a DSS are the DSS database, the DSS software system, and the user interface. There are two kinds of DSS: model-driven DSS and data-driven DSS. DSS can help support decisions for pricing, asset utilization, supply chain management, and customer relationship management as well model alternative business scenarios. DSS targeted toward customers as well as managers are becoming available on the Web. A special category of DSS called geographic information systems (GIS) uses data visualization technology to analyze and display data for planning and decision making with digitized maps.

           People working together in a group can use group decision- support systems to help them in the process of arriving at a decision. Group decision-support systems have hardware, software, and people components. Hardware components consist of the conference room facilities, including seating arrangements and computer and other electronic hardware. Software components include tools for organizing ideas, gathering information, ranking and setting priorities, and documenting meeting sessions. People components include participants, a trained facilitator, and staff to support the hardware and software.

           A GDSS helps decision makers meeting together to arrive at a decision more efficiently and is especially useful for increasing the productivity of meetings of more than four or five people. However, the effectiveness of a GDSS is contingent on the composition of the group, the task, appropriate tool selection and meeting support, and the organizational context of the meeting.

3. Demonstrate how executive support systems can help senior managers make better decisions.

Executive support systems (ESS) help senior managers with unstructured problems that occur at the strategic level of the firm. ESS provide data from both internal and external sources and provide a generalized computing and communications environment that can be focused and applied to a changing array of problems. ESS help senior executives monitor firm performance, spot problems, identify opportunities, and forecast trends. These systems can filter out extraneous details for high-level overviews, or they can drill down to provide senior managers with detailed transaction data if required. ESS are starting to take advantage of firmwide data provided by enterprise systems.

           ESS help senior managers analyze, compare, and highlight trends so that the managers may more easily monitor organizational performance or identify strategic problems and opportunities. They are very useful for environmental scanning, providing business intelligence to help management detect strategic threats or opportunities from the organization’s environment. ESS can increase the span of control of senior management, allowing them to oversee more people with fewer resources.

4. Assess how systems that support decision making can provide value for the firm.

DSS, GDSS, and ESS are starting to take advantage of more accurate firmwide data provided by enterprise systems and the new information technology infrastructure to support very fine-grained decisions for guiding the firm, coordinating work activities across the enterprise, and responding rapidly to changing markets and customers. DSS can be used to guide company-wide decisions in supply chain management, customer relationship management, and business planning scenarios. ESS can be used to monitor company-wide performance using both traditional financial metrics and the balanced scorecard model. The ability to explore the outcomes of alternative organizational scenarios, use precise firmwide information, and provide tools to facilitate group decision processes can help managers make decisions that help the firm achieve its strategic objectives.

5. Identify the challenges posed by decision-support systems, group decision-support systems, and executive support systems and management solutions.

Systems to support decision making do not always lead to better decisions or improved organizational performance. It is not always easy to understand a managerial decision problem if its very unstructured.Managers may not be able to change their thinking to harness the power of these systems, to ask better questions of their data, and to interpret system output accurately. There may be some resistance to ESS at lower levels of the organization if senior management is using them to monitor performance carefully. These systems are more likely to be successful if they are designed and built with flexibility and if they have adequate management support and training programs.