Understanding Data vs. Information
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Questions and Answers

Which of the following is characteristic of nonprogrammed decisions?

  • They involve routine, repetitive situations.
  • They follow a predetermined series of steps.
  • They require custom-made solutions to unique problems. (correct)
  • They are based on established rules and policies.

What does certainty in decision-making conditions imply?

  • The decision-maker has complete knowledge of the required information. (correct)
  • There is a high level of ambiguity concerning goals.
  • Only partial information about outcomes is available.
  • The problem is complex, making decision-making challenging.

Which decision-making bias involves fixating on initial information?

  • Immediate gratification bias
  • Hindsight bias
  • Confirmation bias
  • Anchoring effect (correct)

What best describes the rational decision-making approach?

<p>It assumes decision-makers have access to all possible information. (B)</p> Signup and view all the answers

Which scenario exemplifies the sunk costs error?

<p>Continuing with a project due to substantial past investment despite poor prospects. (B)</p> Signup and view all the answers

Which statement about evidence-based decision-making is true?

<p>It emphasizes making informed decisions based on the best available facts. (C)</p> Signup and view all the answers

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

<p>To compile customer information for relationship monitoring. (A)</p> Signup and view all the answers

What is an effect of bounded rationality in decision-making?

<p>Decision-makers settle for satisfactory options rather than ideal ones. (D)</p> Signup and view all the answers

Which of the following best represents groupthink?

<p>Suppressing dissenting viewpoints in group discussions. (C)</p> Signup and view all the answers

Which of the following embodies the main goal of innovative decision-making techniques?

<p>To generate a wide range of alternatives and encourage collaboration. (D)</p> Signup and view all the answers

What characterizes information that is considered high quality?

<p>It demonstrates consistency, accuracy, and reliability. (D)</p> Signup and view all the answers

Which of the following describes a characteristic of incomplete information in decision-making?

<p>It stems from risk, uncertainty, and ambiguity. (A)</p> Signup and view all the answers

Which step is NOT part of the decision-making process?

<p>Engage in team-building exercises. (A)</p> Signup and view all the answers

How should managers prioritize decision criteria when they differ in importance?

<p>Allocate weights to the criteria. (C)</p> Signup and view all the answers

What type of problems do managers typically face as they advance in an organizational hierarchy?

<p>Less structured problems. (B)</p> Signup and view all the answers

What is the significance of timeliness in the context of information?

<p>Information must be timely to be effective in decision-making. (D)</p> Signup and view all the answers

Which of the following best describes programmed decisions?

<p>They are based on established guidelines or rules. (D)</p> Signup and view all the answers

What is the primary challenge of ambiguity in decision-making?

<p>It can lead to multiple interpretations of information. (B)</p> Signup and view all the answers

Which of the following alternatives must be considered in decision-making?

<p>Developing multiple alternatives. (B)</p> Signup and view all the answers

What factor influences completeness in information availability?

<p>Time constraints and costs associated with searching. (D)</p> Signup and view all the answers

Flashcards

Data

Raw, unanalyzed facts. Think of it as the building blocks of information.

Information

Processed and analyzed data. It provides meaning and insights.

Information Quality

The accuracy, reliability, and relevance of information. High quality information is crucial for decision-making.

Information Timeliness

The timeliness of information. It should be available when needed for effective decision-making.

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Information Completeness

The completeness of information. It should provide all the necessary data for decision-making.

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Information Relevance

The relevance of information to a specific task or situation. It should be useful and address the manager's needs.

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Problem Identification

A gap between the desired state and the current state. The starting point of decision-making.

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Decision Criteria

Factors considered when evaluating alternative solutions to a problem.

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Alternative Analysis

The process of identifying and evaluating different solutions to a problem.

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Alternative Selection

The process of choosing the best solution from the available alternatives.

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Intuitive Decision Making

A decision-making approach where managers rely on their experience, feelings, and judgments rather than formal analysis.

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Immediate Gratification Bias

The tendency to prefer choices that offer immediate rewards, even if they have long-term downsides.

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Procedure

A series of sequential steps used to respond to a well-structured problem.

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Decisions under Risk

Decisions made when managers have clear goals and enough information to estimate the probability of success or failure.

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Satisficing

A decision-making approach where managers choose the first acceptable option rather than searching for the absolute best solution.

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Overconfidence Bias

The tendency to overestimate one's knowledge and abilities.

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Anchoring Effect

The tendency to fixate on initial information and ignore subsequent information, even if it contradicts the initial information.

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Hindsight Bias

The tendency to believe that an event was predictable after it has already happened.

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Decisions under Uncertainty

Decisions made when managers face a lack of information and uncertainty about future outcomes.

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Rational Decision Making

A decision-making approach that assumes managers make logical and consistent choices to maximize value.

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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 crucial for high-quality information.
  • Timeliness: Information often needs to be accessible in real-time.
  • Completeness: Comprehensive information allows for effective control, coordination, and decision-making.
  • Relevance: Information needs to be relevant to the manager's specific needs.

Incomplete Information

  • Managers face limitations in accessing complete information due to:
    • Risk: Known possible outcomes with assigned probabilities.
    • Uncertainty: Unknown probabilities of outcomes.
    • Ambiguity: Information that can be interpreted in multiple conflicting ways.
    • Time constraints and information costs: Limited time and resources for extensive research.

Decision Making

  • Decision making involves steps:

    • Identify the problem (discrepancy).
    • Identify decision criteria.
    • Allocate weights to criteria if prioritizing.
    • Develop alternatives.
    • Analyze alternatives using criteria.
    • Select an alternative.
    • Implement the decision.
    • Evaluate the decision's effectiveness.

  • Structured problems are straightforward and defined.

  • Unstructured problems are new and unusual.

  • Programmed decisions are previously made based on established guidelines.

    • Procedure: Sequential steps for solving structured problems.
    • Rule: Explicit statement defining permissible actions.
    • Policy: Guideline for decision-making.

  • Nonprogrammed decisions are unique and require custom solutions.

Conditions Affecting Decision Failure

  • Certainty: Complete information availability.
  • Risk: Clear goals, estimations of successful vs. failed outcomes.
  • Uncertainty: Known goals, incomplete information on alternatives/future events.
  • Ambiguity: Unclear goals, difficult-to-define alternatives, unavailable outcome information.

Decision-Making Biases and Errors

  • Overconfidence bias: Overestimating knowledge or performance.
  • Immediate gratification bias: Prioritizing immediate rewards.
  • Anchoring effect: Reliance on initial information, ignoring subsequent data.
  • Confirmation bias: Favoring information confirming existing choices.
  • Hindsight bias: Falsely predicting outcome knowledge.
  • Sunk cost error: Focusing on past expenditure rather than future consequences.
  • Self-serving bias: Taking credit for success, blaming others for failure.

Decision-Making Approaches

  • Rational decision-making: Logical and consistent choices maximizing value.

    • Assumptions of rationality: Objective, clear problem, clear goal, knowledge of alternatives/consequences.

  • Bounded rationality: Rational but limited by information processing.

    • Satisficing: Accepting satisfactory rather than optimal solutions.

  • Intuitive decision-making: Decisions based on experience, feelings, and judgments.

Innovative Decision-Making Techniques

  • Brainstorming: Group interactive session for generating diverse alternatives.
  • Evidence-based decision-making: Relying on best available facts and evidence.
  • Rigorous debate: Constructive conflict promotes better decision-making.
  • Avoid groupthink: Preventing suppression of contrary opinions.

Information Systems and Management

  • Information Technology (IT): Methods for acquiring, organizing, manipulating, and transmitting information.
  • Impact of IT on business: Portable offices, better service, leaner organizations, increased collaboration, global exchange, improved management, customization, new business opportunities.
  • Information system: Using IT to convert data to information, processing, and transmission for decision-making.
  • CRM: Software for compiling customer information to monitor and measure interactions.
  • ERP: Integrating operational and business processes for increased organizational productivity.

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Description

This quiz explores the distinction between data and information, highlighting the essential attributes that make information useful for decision-making. It covers challenges such as incomplete information and the impact of quality, timeliness, relevance, and uncertainty on managerial decisions.

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