Information Quality and Decision Making 4

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Questions and Answers

Which attribute of useful information ensures it is accurate and reliable?

Completeness

Relevance

Quality (correct)

Timeliness

What is the term for when the probabilities of alternative outcomes cannot be determined?

Timeliness

Ambiguity

Risk

Uncertainty (correct)

What is the first step in the decision-making process?

Identify the decision criteria

Identify a problem (correct)

Evaluate decision effectiveness

Develop alternatives

In decision-making, what should be done if the decision criteria are not equally important?

Allocate weights to the criteria Signup and view all the answers

What type of decision involves structured problems?

Programmed decisions Signup and view all the answers

What is characterized by new or unusual problems that are not easily defined?

Unstructured problems Signup and view all the answers

Which of the following occurs last in the decision-making process?

Evaluating decision effectiveness Signup and view all the answers

What characterizes programmed decisions?

They have been made numerous times, leading to established guidelines. Signup and view all the answers

Which of the following is NOT a condition contributing to decision failure?

Credentialism Signup and view all the answers

What is an example of a decision-making bias?

Hindsight bias Signup and view all the answers

What does the concept of bounded rationality imply?

Managers have limits to processing all available information. Signup and view all the answers

Which decision-making approach relies on intuition?

Intuitive decision making Signup and view all the answers

What is a characteristic of innovative decision-making techniques?

They can include brainstorming and evidence-based approaches. Signup and view all the answers

What is the primary purpose of Customer Relationship Management (CRM) systems?

To compile information on customers for monitoring interactions. Signup and view all the answers

Which type of decision is characterized as nonrecurring and unique?

Nonprogrammed decision Signup and view all the answers

Which statement describes the anchoring effect in decision making?

It encourages reliance on initial information despite further data. Signup and view all the answers

What is a direct benefit of information technology in business?

Creating portable offices and remote access to information. Signup and view all the answers

What is a key feature of Enterprise Resource Planning (ERP) systems?

They integrate all operational and business processes in an organization. Signup and view all the answers

What does the term 'self-serving bias' refer to?

Taking credit for successes while blaming failures on external factors. Signup and view all the answers

What is the immediate gratification bias in decision making?

Choosing options that provide immediate rewards over those requiring patience. Signup and view all the answers

What is one effect of groupthink in decision making?

It can suppress contrary opinions and lead to poor decisions. Signup and view all the answers

Study Notes

Data vs. Information

Data is raw, unanalyzed facts.
Information is processed and analyzed data.

Attributes of Useful Information

Quality: Accuracy and reliability are key.
Timeliness: Often needs to be available immediately.
Completeness: Includes all necessary information for decisions.
Relevance: Useful and suited to specific needs.

Incomplete Information

Risk: Known outcomes with assigned probabilities.
Uncertainty: Unknown probabilities of outcomes.
Ambiguity: Information can be interpreted in multiple ways.
Time constraints and information costs: Managers are limited by time and resources.

Decision Making Process

Identify a problem: Discrepancy between desired and existing conditions.
Identify decision criteria: Important factors for resolution.
Allocate weights (if needed): Assign priority to criteria.
Develop alternatives: Brainstorm possible solutions.
Analyze alternatives: Evaluate based on criteria.
Select an alternative: Choose the best option.
Implement the alternative: Put the decision into action.
Evaluate decision effectiveness: Assess the outcome and success.

Types of Decisions

Structured problems: Straightforward, familiar, easily defined.
Unstructured problems: New, unusual, need custom solutions.
Programmed decisions: Repeated situations with established guidelines.
- Procedure: Sequential steps for structured problems
- Rule: Explicit statements about what is allowed.
- Policy: Guidelines for decision-making.
Nonprogrammed decisions: Unique, custom-made solutions.

Conditions Affecting Decision Failure

Certainty: All needed information is available.
Risk: Clear goals, probabilities of success/failure are known.
Uncertainty: Goals are known, but information is incomplete.
Ambiguity: Goals/problems are unclear, alternatives uncertain.

Decision-Making Biases and Errors

Overconfidence bias: Overestimating knowledge.
Immediate gratification bias: Prioritizing immediate rewards.
Anchoring effect: Focusing on initial information.
Confirmation bias: Seeking confirming information.
Hindsight bias: Falsely predicting outcomes after they happen.
Sunk costs error: Focusing on past investments instead of future.
Self-serving bias: Taking credit for successes, blaming others for failures.

Decision-Making Approaches

Rational decision making: Logical, consistent choices maximizing value.
- Assumptions of rationality: Objectivity, clear problems, specific goals, awareness of all alternatives and consequences.
Bounded rationality: Rational decision-making limited by information processing.
- Satisficing: Accepting "good enough" solutions.
Intuitive decision making: Decisions based on experience, feelings.

Innovative Decision-Making Techniques

Brainstorming: Group discussion for suggesting alternatives.
Evidence-based decision making: Using facts and data for better decisions.
Rigorous debate: Encouraging different perspectives.
Avoid groupthink: Preventing suppression of dissenting opinions.

Information Systems and Management

Information technology(IT): Methods to acquire, organize, transmit information.
Impact of IT on business: Improved offices, service, efficiency, collaboration, global exchange, management, customization, opportunities.
Information system: Use of IT to convert data to information for decision-making.
Customer Relationship Management (CRM): Software for customer information.
Enterprise Resource Planning (ERP): Integrates organizational processes.

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Description

This quiz explores the key concepts of data vs. information, attributes of useful information, and the decision-making process. Understand the importance of data quality, timeliness, and completeness in making informed decisions. Test your knowledge on how to navigate risks and uncertainties in decision-making scenarios.