Research

2. INFORMATION
 Data : Data is raw facts. Data is like raw material. Data does not
interrelate and also it does not help in decision making. Data is
defined as groups of non-random symbols in the form of text,
images, voice representing quantities, action and objects.
 Information is the product of data processing. Information is
interrelated data. Information is equivalent to finished goods
produced after processing the raw material. The information has
a value in decision making. Information brings clarity and
creates an intelligent human response in the mind.
 According to Davis and Olson : “Information is a data that has
been processed into a form that is meaningful to recipient and is
of real or perceived value in the current or the prospective action
or decision of recipient.”

4. Attributes of Information
i) Timeliness : Delays destroys the value of information. The characteristic of timeliness, to
be effective, should also include up-to-date, i.e. current information.
ii) Accuracy : It means that information should be free from mistakes, errors &, clear.
Accuracy also means that the information is free from bias.
iii) Relevance : Information is said to be relevant if it answers especially for the recipient
what, why, where, when, who and why?
iv) Adequacy : MIS must provide reports containing information which is required in the
deciding processes of decision-making. Whereas inadequacy of information leads to crises,
information overload results in chaos.
v) Completeness : The information which is given to a manager must be complete and
should meet all his needs.
vi) Explicitness : A report is said to be of good quality if it does not require further analysis
by the recipients for decision making.
vii) Impartiality : Impartial information contains no bias and has been collected without
any distorted view of the situation.

5. Concept of Decision-Making
 Trewatha & Newport defines decision making process
as follows:, “Decision-making involves the
selection of a course of action from among two or
more possible alternatives in order to arrive at a
solution for a given problem”.

6. Steps in decision Making

7. Role of Information in Decision-
making
1. Problem Solving: Information helps identify
problems and allows decision makers to evaluate
alternative solutions and choose the best course of
action.
2. Evidence-based Decision Making: Information
provides the evidence needed to make decisions that are
based on data and facts, rather than opinions or
assumptions.
3. Risk Assessment: Information helps decision
makers assess risks and make decisions that minimize
potential harm and maximize benefits.

8. 4. Forecasting: Information helps decision makers
anticipate future events and trends, allowing them to
make plans and prepare for potential challenges and
opportunities.
5. Improved Accuracy: Information helps decision
makers make more accurate decisions by providing them
with a complete and accurate picture of a situation.

9. Types of Information

10. Classification by Characteristic
 Strategic Information − Strategic information is concerned
with long term policy decisions that defines the objectives of a
business and checks how well these objectives are met. For
example, acquiring a new plant, a new product, diversification of
business etc, comes under strategic information.
 Tactical Information − Tactical information is concerned with
the information needed for exercising control over business
resources, like budgeting, quality control, service level, inventory
level, productivity level etc.
 Operational Information − Operational information is
concerned with plant/business level information and is used to
ensure proper conduction of specific operational tasks as
planned/intended. Various operator specific, machine specific
and shift specific jobs for quality control checks comes under
this category.

11. Classification by Application
 Planning Information − These are the information needed for
establishing standard norms and specifications in an organization.
This information is used in strategic, tactical, and operation
planning of any activity. Examples of such information are time
standards, design standards.
 Control Information − This information is needed for establishing
control over all business activities through feedback mechanism.
This information is used for controlling attainment, nature and
utilization of important processes in a system. When such
information reflects a deviation from the established standards, the
system should induce a decision or an action leading to control.
 Knowledge Information − Knowledge is defined as "information
about information". Knowledge information is acquired through
experience and learning, and collected from archival data and
research studies.

12.  Organizational Information − Organizational information
deals with an organization's environment, culture in the light of
its objectives. Examples of such information are employee and
payroll information.
 Functional/Operational Information − This is operation
specific information. For example, daily schedules in a
manufacturing plant that refers to the detailed assignment of
jobs to machines or machines to operators. In a service oriented
business, it would be the duty roster of various personnel. This
information is mostly internal to the organization.
 Database Information − Database information construes large
quantities of information that has multiple usage and
application. Such information is stored, retrieved and managed
to create databases. For example, material specification or
supplier information is stored for multiple users.

13. Classification By Management
Hierarchy
Levels of Management Problems handled/ Decisions made Type of information required
Top level
Middle level
Operational level
Unstructured problems.
Decisions are based on situations
not/rarely handled in the past.
Decision-making variable not clearly
defined.
Semi structured/structured problems.
Decisions on regular issues.
Decisions on tactical issues.
Structured problems
Structured decision-making
Decision-making on the basis of set
rules
Strategic information from within the
organization and outside.
Information about likely scenarios.
Information that can be analyzed in
different ways.
Exception reports
Regular summarized reports.
Information that can be drilled deeper
for insight.
Information to help find out exceptions
so that they can be reported to top
management
Operational information
Rule based information, guidelines,
handbook level information

14. Models of Decision Making
 Classical Model of decision making
 Administrative Model of decision making
 Herbert Simon's Model of decision making

15. Classical Model of decision making

16. Assumptions
 Clearly defined problem. The model assumes that the
decision-maker has clearly set goals and knows what is expected
from him.
 Certain environment. The model further suggests that it is in
the power of the decision-maker to eliminate any uncertainty
that might impact the decision. As a result, there are no risks to
account for.
 Full information. The decision-maker is able to identify all
alternatives available to him and to evaluate and rank them
objectively.
 Rational decisions. The decision-maker is believed to always
be acting in the best interests of the organization.

17. Steps in the Classical Model
 Listing all available alternatives.
Under the classical model, the decision-maker is not limited
by time or resources and can continue looking for alternatives
until he identifies the one that maximizes the utility from the
decision.
 Ranking listed alternatives.
The decision-maker is believed to possess not only all
required information but also the cognitive ability to
prioritize the alternatives accurately and objectively.
 Selecting the best-suited alternative.

18. Administrative Model of decision
making
 The administrative model of decision-making in Management
Information Systems (MIS), also known as the bounded
rationality model, was proposed by Herbert Simon.
 This model recognizes that decision-making is often bounded
by limitations in human cognitive abilities, information
processing capabilities, and time constraints.
 The administrative model departs from the idealized rational
decision-making assumptions of the classical model and
emphasizes the real-world constraints faced by decision-
makers.

19. Key features of the administrative
model
 Bounded Rationality:
The administrative model acknowledges that decision-makers have
limited rationality and cannot consider all available alternatives or
evaluate all possible outcomes
 Satisfying:
Decision-makers tend to search for the best possible solution, they aim to
find a satisfactory solution that meets a satisfactory level of performance
or fulfils minimum requirements.
 Incremental Decision-Making
They build on existing practices, make small adjustments, and learn from
feedback and experience over time. This approach allows decision-makers
to adapt and adjust their decisions based on changing circumstances

20.  Political Considerations
Decision-makers must navigate organizational politics,
power dynamics, and multiple stakeholders' interests
 Bounded Awareness
The administrative model acknowledges the existence of
biases, information overload, and selective attention that
affect decision-making.
 Learning and Adaptation
Decision-makers learn from their own experiences,
feedback from implemented decisions, and observations
of others.

21. MIS & Decision Making Concepts
 Process and Modeling in Decision Making
1. Rational models
2. Normative model

22.  A rational decision making model takes the following
steps:
 Identifying the problem
 Identifying the important criteria for the process and
the result
 Considering all possible solutions
 Calculating the consequences of all solutions and
comparing the probability of satisfying the criteria
 Selecting the best option

23. Characteristics of Rationale
Decision Making
 Systematic approach: Rational decision-making in MIS follows a structured
and systematic approach.It involves clearly defining the problem, gathering
information, evaluating alternatives, and making a logical choice based on
established criteria. This systematic approach helps ensure that decisions are
based on a comprehensive analysis of available information.
 Information-driven: MIS decision-making relies heavily on accurate and
relevant information. Decision-makers gather data, analyze it, and use it to
evaluate alternatives. The availability of timely and reliable information is
crucial for making informed decisions in the MIS context.
 Objective criteria: Rational decision-making in MIS involves establishing
objective criteria or metrics against which alternatives are evaluated. These
criteria are based on the specific needs and requirements of the organization.
Examples of objective criteria in MIS decision-making could include cost-
effectiveness, system performance, scalability, security, and user satisfaction.
 Analytical tools: Rational decision-making in MIS often utilizes various
analytical tools and techniques. These tools may include cost-benefit analysis,
SWOT analysis, decision matrices, and simulation models. These tools help
decision-makers assess the potential impact and outcomes of different
alternatives in a structured and quantitative manner.

24.  Long-term perspective: Rational decision-making in MIS considers the long-
term implications and benefits of the chosen alternative. It takes into account
the organization's strategic goals, future needs, and potential scalability.
Decision-makers assess the long-term value and sustainability of the selected
MIS solution.
 Involvement of stakeholders: Rational decision-making in MIS involves
considering the perspectives and input of relevant stakeholders. This may
include users, IT professionals, managers, and other individuals who will be
affected by the decision. Involving stakeholders helps ensure that the decision
aligns with the needs and expectations of the organization.
 Continuous improvement: Rational decision-making in MIS promotes a
culture of continuous improvement. After implementing a decision, the results
are evaluated, and lessons learned are used to refine future decision-making
processes. This feedback loop allows for ongoing learning and optimization of
MIS-related decisions.
 While rational decision-making in MIS provides a structured approach, it's
important to note that real-world decision-making is influenced by various
factors such as time constraints, resource limitations, and subjective biases.
Therefore, while the rational model is a useful framework, it may not always be
fully achievable or appropriate in every MIS decision-making situation.

25. Normative model of decision-
making
 According to this model, decision-making is
characterized by:
1. Limited information processing: A person can
manage only a limited amount of information.
2. Judgmental heuristics: A person may use shortcuts
to simplify the decision making process.
3. Satisfying: A person may choose a solution that is
just “good enough”.