Podcast
Questions and Answers
Data is defined as processed and analyzed facts.
Data is defined as processed and analyzed facts.
False
The quality of information increases if it is accurate and reliable.
The quality of information increases if it is accurate and reliable.
True
Managers always have complete information at their disposal when making decisions.
Managers always have complete information at their disposal when making decisions.
False
In decision-making, the first step is to allocate weights to the decision criteria.
In decision-making, the first step is to allocate weights to the decision criteria.
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Unstructured problems are straightforward and easily defined.
Unstructured problems are straightforward and easily defined.
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Evaluating decision effectiveness is the last step in the decision-making process.
Evaluating decision effectiveness is the last step in the decision-making process.
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Timeliness is not an important attribute of useful information.
Timeliness is not an important attribute of useful information.
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As managers move up the organizational hierarchy, they tend to deal with more structured problems.
As managers move up the organizational hierarchy, they tend to deal with more structured problems.
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Nonprogrammed decisions are repetitive and follow established guidelines.
Nonprogrammed decisions are repetitive and follow established guidelines.
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The ambiguity condition in decision-making refers to complete clarity regarding the problem and alternatives.
The ambiguity condition in decision-making refers to complete clarity regarding the problem and alternatives.
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Confirmation bias leads individuals to seek information that contradicts their prior choices.
Confirmation bias leads individuals to seek information that contradicts their prior choices.
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The rational decision-making approach assumes that managers will always act irrationally and subjectively.
The rational decision-making approach assumes that managers will always act irrationally and subjectively.
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Overconfidence bias can lead to unrealistic views about an individual's knowledge and performance.
Overconfidence bias can lead to unrealistic views about an individual's knowledge and performance.
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Sunk costs error involves focusing on future consequences rather than past expenditures.
Sunk costs error involves focusing on future consequences rather than past expenditures.
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Intuitive decision-making relies solely on statistical data and avoids personal experience.
Intuitive decision-making relies solely on statistical data and avoids personal experience.
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Bounded rationality suggests that managers can analyze all information and alternatives before making a decision.
Bounded rationality suggests that managers can analyze all information and alternatives before making a decision.
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Brainstorming is a decision-making technique that promotes individual suggestion rather than group interaction.
Brainstorming is a decision-making technique that promotes individual suggestion rather than group interaction.
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Customer Relationship Management (CRM) systems are designed to integrate business processes across an entire organization.
Customer Relationship Management (CRM) systems are designed to integrate business processes across an entire organization.
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The immediate gratification bias encourages individuals to favor options that provide delayed rewards.
The immediate gratification bias encourages individuals to favor options that provide delayed rewards.
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Creating leaner organizations is an impact of information technology on business.
Creating leaner organizations is an impact of information technology on business.
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Ambiguity in decision-making is characterized by clearly defined goals and information about alternatives.
Ambiguity in decision-making is characterized by clearly defined goals and information about alternatives.
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Rigorous debate can enhance decision quality by introducing divergent viewpoints.
Rigorous debate can enhance decision quality by introducing divergent viewpoints.
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Study Notes
Data and Information
- Data are raw, unanalyzed facts.
- Information is processed and analyzed data.
- Useful information has quality, timeliness, completeness, and relevance.
Attributes of Useful Information
- Quality: Accuracy and reliability are crucial for quality information.
- Timeliness: Information often needs to be available in real-time.
- Completeness: Complete information provides managers with all necessary data for control, coordination, and effective decision-making.
- Relevance: Information must be helpful and fit the manager's specific needs.
Incomplete Information
- Managers don't always have all the needed information due to risks, uncertainties, ambiguities, and time constraints.
- Risk: Known outcomes with assigned probabilities.
- Uncertainty: Unknown probabilities of outcomes.
- Ambiguity: Information can be interpreted in multiple and conflicting ways.
- Time Constraints & Costs: Lack of time and resources to evaluate all possibilities and consequences.
Decision Making
- Decision making is a process with steps.
- Step 1: Identify the problem (discrepancy between current and desired state).
- Step 2: Define decision criteria (what's important).
- Step 3: Prioritize criteria if not equally crucial (assign weights).
- Step 4: Generate alternatives.
- Step 5: Analyze alternatives using criteria.
- Step 6: Select an alternative.
- Step 7: Implement the decision (put it into action).
- Step 8: Evaluate effectiveness (did it resolve the problem?).
Types of Decisions
- Structured Problems: Straightforward, familiar.
- Unstructured Problems: New, unusual.
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Programmed Decisions: Made many times, with guidelines.
- Procedures: Sequential steps for structured problems.
- Rules: Explicit statements on what is allowed or prohibited.
- Policies: Guidelines for making decisions.
- Nonprogrammed Decisions: Unique, nonrecurring solutions for unusual opportunities/threats.
Conditions Affecting Decision Failure
- Certainty: All needed information is available.
- Risk: Clear goals, estimated probabilities of success/failure.
- Uncertainty: Known goals but incomplete information on alternatives/future.
- Ambiguity: Unclear goals, difficult-to-define alternatives, unavailable information.
Decision-Making Biases and Errors
- Overconfidence Bias: Overestimating knowledge or abilities.
- Immediate Gratification Bias: Prioritizing immediate rewards.
- Anchoring Effect: Focusing on initial information.
- Confirmation Bias: Seeking information confirming past choices.
- Hindsight Bias: Believing an outcome was predictable in hindsight.
- Sunk Cost Error: Focusing on past investments rather than future outcomes.
- Self-Serving Bias: Taking credit for successes, blaming others for failures.
Decision-Making Approaches
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Rational Decision Making: Logic, maximizing value, assuming managers are rational.
- Assumptions: Logical, clear goals, knowledge of all alternatives and consequences.
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Bounded Rationality: Rational but limited by information-processing abilities.
- Satisficing: Selecting a "good enough" solution.
- Intuitive Decision Making: Experience-based, feelings, judgments, years of practice.
Innovative Decision-Making Techniques
- Brainstorming: Group discussion to generate many alternative solutions.
- Evidence-Based Decision Making: Decisions based on facts and evidence.
- Rigorous Debate: Constructive conflict from diverse viewpoints.
- Avoid Groupthink: Suppressing opposing opinions in groups.
Information Systems and Management
- Information Technology (IT): Methods for acquiring, organizing, manipulating, and transmitting information.
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IT's Impact on Business:
- Portable offices, instant information, better service, leaner organizations, increased collaboration, global exchanges, improved management, customization, new business opportunities.
- Information System: IT resources convert data to information for decision-making.
- CRM Systems: Customer information management software.
- ERP Systems: Integrate operational processes across an organization.
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Description
This quiz explores the critical attributes of useful information, including quality, timeliness, completeness, and relevance. It also delves into the challenges managers face with incomplete information, highlighting risks, uncertainties, and time constraints. Test your understanding of these key concepts vital for effective decision-making.
