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Decision Making

The document presents a comprehensive overview of decision-making processes, types, roles of Management Information Systems (MIS), and factors influencing decision-making. It outlines various decision-making approaches, including rational, bounded rationality, intuitive, data-driven, collaborative, incremental, and crisis decision-making, while also addressing barriers such as information overload and cognitive biases. Additionally, it emphasizes the importance of data quality and ethical considerations in making informed decisions.
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0% found this document useful (0 votes)
7 views32 pages

Decision Making

The document presents a comprehensive overview of decision-making processes, types, roles of Management Information Systems (MIS), and factors influencing decision-making. It outlines various decision-making approaches, including rational, bounded rationality, intuitive, data-driven, collaborative, incremental, and crisis decision-making, while also addressing barriers such as information overload and cognitive biases. Additionally, it emphasizes the importance of data quality and ethical considerations in making informed decisions.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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GROUP 8 PRESENATION

NAME REGISTRATION NUMBER

ASINGUZA PERVIN 24/U/ISD/003680/PD

NAMUYANJA AMIMAH 24/U/ISD/09616/PD

MUHINDO LILLIAN ATHOLERE 24/U/ISD/07493/PD

NGABO MORGAN 24/U/ISD/10210/PD

KIBAYA DENIS 24/U/ISD/06018/PD

BYARUHANGA HOPE GRACE 24/U/ISD/04579/PD

SSEMUYA REAGAN 24/U/ISD/11778/PD

OPIO FRANK 24/U/ISE/11222/PE


DECISION MAKING.
Refers to the process of selecting the best course of action from a set of
alternatives, using data and information generated.
TYPES OF DECISION MAKING
AND THEIR EXAMPLES.
1. Programmed decision making: Routine, repetitive decisions. They are
based on established rules and criteria. Example; Approving a standard
loan application based on credit score and income.
2. Non programmed decision making: Requires analysis, judgement and
its non repetitive. Example; Deciding whether to launch a new product
line.
3. Strategic decision making: Long term, high impact decisions mainly in
organizations. Example; Deciding to expand into a new market or
acquire a competition.
TYPES OF DECISION MAKING
AND THEIR EXAMPLES.
4. Tactical decision making: Short term and focuses on implementing
strategic plans. Example; Deciding how to allocate resources to meet
quarterly sales targets.
5. Operational decision making: Day to day, routine decisions. Managing
daily decisions. Example; Deciding on how to schedule employee shifts.
6. Intuitive decision making: Based on instinct and experience usually used
in situations with incomplete or uncertain information. Example; A manager
deciding to trust their gut feeling about a potential new hire.
TYPES OF DECISION MAKING AND
THEIR EXAMPLES.
7. Analytical decision making: Based on data analysis and facts. Example;
A manager using data analytics to determine the most effective marketing
channels.
8. Collaborative decision making: Involves multiple stakeholders and team
members. Example; A cross functional team working together to develop a
new product launch strategy.
NOTE: These types of decision making are not mutually exclusive and many
decisions involve a combination of two or more types.
ROLES OF MIS IN DECISION
MAKING
• Data collection and analysis: MIS collects and analyses data from various sources.
Providing insights that inform decision making.
• Information provision: MIS provides relevant and timely information to decision
makers, enabling them to make informed decisions.
• Pattern recognition: MIS helps identify patterns and trends in data, facilitation
predictive analytics and decision making.
• Simulation and modeling: MIS allows decision makers to simulate different
scenarios and model outcomes, enabling more informed decision making.
• Communication and collaboration: MIS facilitates communication and collaboration
among stakeholders , ensuring that all parties are informed and aligned.
• Performance monitoring: MIS tracks and monitors performance metrics , enabling
decision makers to identify areas for improvement.
ROLES OF MIS IN DECISION
MAKING.
• Risk management: MIS helps identify and mitigate risks enabling decision
makers to make more informed decisions.
ROLES OF DECISION MAKING IN
MIS.
Problem solving; It helps managers identify and solve problems using
data.
Communication and collaboration; It facilitates communication among
stakeholders.
Innovation and improvement; Encourages managers to think creatively
and make innovative decisions to improve processes.
Risk management; Encourages managers to identify risks and how to
overcome them.
Resource allocation; Enables managers to allocate resources effectively
e.g. equipment.
CHARACTERISTICS OF DECISION
MAKING PROCESS
• Goal oriented.decision making is fundamentally aimed at achieving
specific organizational objectives, towards reaching a particular goal.
• Involves Alternatives. Decision making involves choosing from among
various alternatives and evaluat each against set criteria.
• Analytical and Intuitive.Anaytical decision relies on data,logical reasoning
and system evaluation while lntuitive draws on personal experience,
feelings and extinct.
• Continuous Process.Decision making is not a one time event but a
continuous process that requires constant decisions made.
• Dynamic and flexible. Decision making should be adaptable to changing
circumstances.Managers often operate in environments of uncertainty
and rapid changes
• Cognitive process.Decision making involves cognitive functions such as
analysis,systhesis, evaluation and judgement.
• Influenced by constraints.Decisions are made with a frame work of
constraints including budgetary limits
• Involves Uncertainty and Risk.Decision making often occurs in an
environment of uncertainty and risk.
• Human Element.Decision making inherently is a social and human
process that involves considering the impact of decisions in employees
and community .
• Integral to planning.Every step requires decisions, from defining the
vision and setting priorities to allocating resources and implementing
strategies.
Data Quality and Relevance: The Foundation
Accuracy Relevance Completeness

Data must be accurate to ensure Data should be relevant to the Data completeness is essential for
reliability in decision-making. specific decision at hand. Irrelevant a holistic view. Missing data can
Inaccurate data can lead to flawed data can clutter the decision- result in biased or incomplete
analysis and poor choices. making process and obscure key analysis, leading to suboptimal
insights. outcomes.

Effective decision-making hinges on the quality and relevance of the data used. Accurate, relevant, and complete
data form the bedrock of informed decisions within MIS.
Modeling Techniques:
Representing the Decision
Decision Trees Simulation Models
Visual representation of decision Replicate real-world scenarios to
paths based on different test the impact of various
conditions. Useful for decisions. Allows for risk
understanding potential assessment and strategic
outcomes. planning.

Optimization Models
Identify the best solution by maximizing or minimizing a specific
objective. Ideal for resource allocation and efficiency improvements.

Modeling techniques provide structured frameworks for decision


representation. From decision trees to simulation and optimization models,
these techniques offer diverse tools for visualizing and analyzing decision
scenarios.
Algorithms and
Automation: Streamlining
the Process

Automation Efficiency Precision


Algorithms Algorithms enhance Algorithms
automate routine decision-making minimize errors by
decisions, freeing efficiency, applying precise
up human resources delivering quick and rules and logic to
for more complex consistent results. decision-making
tasks. processes.
Algorithms and automation are essential for streamlining decision
processes. By automating routine decisions and enhancing
efficiency, they enable quicker and more precise outcomes within
MIS.
Human Factors: Intuition and Expertise
Expertise
1 Experience-based knowledge

Judgment
2
Critical assessment

Intuition
3
Gut feelings

Human intuition and expertise play a critical role, especially in complex scenarios where algorithms fall short. The
combination of human insight with automated analysis leads to more robust decisions.
Ethical Considerations: Bias and Transparency

Fairness Transparency Accountability


Ensuring decisions are unbiased and Making decision-making processes Taking responsibility for the
equitable. clear and understandable. outcomes of decisions.

Ethical considerations are paramount in MIS decision-making. Addressing bias and ensuring transparency promote fair and
responsible outcomes, fostering trust and accountability in the digital age.
CORE STEPS OF DECISION MAKING IN MIS.

• Identifying the problem ; this involves clear articulation of the problem or


opportunity requiring a decision.

• Gather and analyze the information ; this involves collection of data from
both internal sources like the industrial reports and the external sources
like market research.
Analyze data to identify patterns and root causes of the problem.

• Develop alternative solutions; brainstorm a range of the potential


solutions to address identified problem. Encourage creativity and
innovation.
STEPS
• Evaluating the alternatives and selecting the best solution ; establish a criteria
for evaluating the proposed solutions.
use the decision making models e.g. the SWOT analysis to compare the
alternatives.
Select the solution that aligns with the company’s goals and objectives.

• Implement the chosen solution; develop a detailed action plan for


implementing the selected solution.
allocate resources like technology, funds and the required personnel's to
support the implementation.
Communicate the plan to all the stakeholders of the company, carry out
training of the employees.
STEPS
• Monitor and evaluate the results; Track key performance indicators to
measure the effectiveness of the implemented solution.
Collect data to asses whether the problem has been solved e.g. compare
the actual results with the expected outcomes . e.g. measure the customer
satisfaction.
FACTORS THAT INFLUENCE
DECISION MAKING
• PERSONAL FACTORS
• Emotions; feelings such as fear, excitement or stress impact decision
making.
• values and beliefs ; personal morals and ethics guide choices.
• Knowledge and experience ; level of knowledge and experience in a
particular area can inform decisions.
• attitudes and biases ; biases like confirmation bias, anchoring or loss
aversion can distort decisions.
• Motivation ; the urgency or importance of a goal affects decisions.
CONTINUATION
• Personality traits; traits like risk tolerance, impulsivity and analytical
thinking can influence decisions.
• PSYCHOLOGICAL FACTORS
• Perception; how a person interprets information can shape their
decisions.
• memory and attention; what a person remembers or focuses on
influences choices.
• Critical thinking; analytical and critical thinking skills help in making
better decisions.
CONTINUATION
• SOCIAL AND CULTURAL FACTORS
• Peer pressure; influence from friends, family and colleagues can affect
decisions.
• social norms; cultural and societal expectations shape behavior.
• group think; the tendency to conform to group decisions even if they are
flawed.
• authority figures ; advice or instructions from leaders, experts, or mentors
can guide choices.
CONTINUATION
ENVIRONMENTAL FACTORS
Time constraints; limited time can lead to rushed or impulsive decisions.
economic conditions; financial stability or instability affects choices.
Legal and ethical considerations; laws and regulations shape decision
making frameworks.
available information ; the quality and quantity of information influence
decision quality.
Technological advancements; access to technology and data can inform
decisions.
APPROACHES TO DECISION
MAKING IN MIS
• Different approaches to decision making are used based on the
complexity of the problem , the availability of data and the
level of uncertainty.
• Below are the main approaches;
1. Rational Approach[Classical Decision-Making Model]; This approach
assumes that decision makers are fully rational and have access to
complete information . It follows a systematic process
• STEPS:
• Define the problem
• Identify possible alternatives
• Evaluate each alternative based on objective criteria
• Consider opportunity cost then implement ,monitor and adjust as
needed
• STRENGTHS:
• Ensures logical and data driven decisions ,Reduces risks by evaluating
multiple options, Suitable for structured problems
• WEAKNESSES: Time consuming and rigid
CONT’D
2. BOUNDED RATIONALITY APPROACH [Behavioral decision-making
model]; This recognizes that decision makers face limitations in
information, time and cognitive capacity. Instead of finding the
optimal solution they instead seek for a satisfactory one.
• STRENGTHS: More realistic since it accounts for human
limitations , Saves time and effort.
• Weakness: Biased decisions

EXAMPLE: Managers using DSS to filter out less important reports


and focus on the most relevant ones.
3. Intuitive Decision Making ; Decisions are based on intuition , experience
and gut feelings rather than formal analysis . Mostly used when time is
limited.
• EXAMPLE: A CEO deciding to invest in a technology based on industry
trends rather than detailed data analysis.

4. Data Driven Decision Making [DDD] Approach; This approach relies on


data analysis , AI and big data to make objective and informed decisions.
• Tools Used: BI, AI ,Machine learning Algorithms .
• Example: AI driven HR analytics to predict employee turnover rates and
suggest retention.

5. Collaborative Decision Making Approach; This involves multiple


stakeholders working together to make a decision. Features used are; Group
Decision Support System [GDSS] , team work , brain storming , voting.
• Example: A company’s IT team using GDSS tools like Google Workspace to
decide on new software implementation.
6. Incremental Decision-Making Approach; This approach involves making
small, step by step decisions rather than large, radical changes. Mainly
focuses on improvements , reduced risks.
• Example: A company gradually shifting to cloud computing by first
testing it with a small department before full implementation.

7. Crisis Decision Making Approach; This is used when organizations face


emergencies or high-pressure situations. It involves rapid decision
making with limited data , focuses on immediate problem solution.
• Example: An IT security team making real time decisions during a cyber
attack using an Intrusion Detection System [IDS].
BARRIERS IN DECISION MAKING
• Information overload: The abundance of information available in MIS can
overwhelm decision-makers, making it difficult to identify relevant data
and insights needed for effective decisions.
• Data Quality Issues: Poor data quality, including inaccuracies,
inconsistencies, and incomplete data, can lead to erroneous conclusion
and decisions.
• Lack of Training: Insufficient training on MIS tools and methodologies can
limit the ability of users to extract meaningful insights from data.
• Poor communication: In effective communication between departments
can lead to misalignment in goals and objectives , complicating
collaborative decision making.
• Poor integration of systems: When Mis does not integrate well with
other systems or processes in the organization, it can result in
fragmented information and in efficiencies.
• Cognitive biases: Decision making can be hindered by biases,
like over confidence . Promoting data driven approaches and
diverse perspectives can mitigate these biases.
• Time constraints: Tight deadlines can force rushed analysis
and poor decision making. Providing adequate time and clear
timelines for reviews is crucial.
• Technological Limitations: Inefficient or outdated technology
can hinder the ability to analyze data effectively. This
includes slow processing times and inadequate software
tools.
• Resistance to Change: Employees may resist new MIS tools
due to comfort with old systems . Involvement in the
selection process and training can help ease transitions.
• Unclear Objectives: With out clear goals and objectives, it
becomes difficult for decision-makers to focus on relevant
data, leading to confusion and poor decision-making.

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