There are different types of decision, they include programmed decision and a non-programmed decision. There are different models for decision making such as classical economic model,administrative model and Herbert Simons model of decision making. For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/ZEcPAc

1. I.T. for Management
Section2
Chapter 9
Role of information in
decision making

2. Role of Information in Decision
Making
Conceptual model of Decision Making
Managers deal with problems posing threats
and offering opportunities.
Managers can be problem avoiders, problem
solvers, or problem seekers.
Managers display systematic and intuitive
problem-solving styles.
Managers make decisions under conditions of
certainty, risk, and uncertainty.
Managers solve problems with programmed
and non programmed decisions.

3. Role of Information in Decision
Making
Types of Decision
Certain Environment
offers complete information on possible action
alternatives and their consequences.
Risk Environment
lacks complete information but offers
probabilities of the likely outcomes for possible
action alternatives.
Uncertain Environment
lacks so much information that it is difficult to
assign probabilities to the likely outcomes of
alternatives.

4. Role of Information in Decision
Making
Types of Decision
Decision
a choice among possible alternative courses of
action.
Programmed Decision
applies a solution from past experience to a
routine problem.
Non programmed Decision
applies a specific solution crafted for a unique
problem.

5. Role of Information in Decision
Making
Types of Decision

6. Role of Information in Decision
Making
Conceptual model of Decision making
Classical Economic model
This nominative model is based on the following
assumptions:
•All decisions and outcomes are completely known
•The model states that the decision maker always
seeks to maximize profit or utility
•The decision maker is infinitely sensitive to
difference in utility among outcome
•Decision making in the business context is nothing
but a set of tradeoffs

7. Role of Information in Decision
Making
Conceptual model of Decision making
Administrative model
It works on the concept of bounded rationality
It assumes that the decision maker
•Does not know all the alternatives and outcomes
•Makes a limited search to discover a few
satisfactory alternatives
•Makes a decision which satisfies his or her
aspiration
The decision maker has to do a balancing act
between the conflicting trade-off’s

8. Role of Information in Decision
Making
Conceptual model of Decision making
•Human expectations and decision making
•Humans display a variety of responses in decision-
making
•Anticipatory regret is a psychological response to
alternatives,it inhibits the decision maker from making a
decision without contemplating the consequences.
•Decision making under psychological stress
•This concept is important to the design of information
systems,because a decision support system to be used under
conditions of decision conflict & may not effective unless it
takes care of behavior under psychological stress

9. Role of Information in Decision
Making
Conceptual model of Decision making
Herbert Simons model of decision making
This model divides the process into 3 phases
•Intelligence phase
Searching the environment conditions calling for
decision data inputs are obtained ,processed &
examined for clues that may identify problems
or opportunities
•Design phase
Inventing ,developing possible course of actions
•Choice phase
Selecting one of alternative,or course of actions

10. Role of Information in Decision
Making
Herbert Simons model of decision making

11. Role of Information in Decision
Making
Herbert Simons model of decision making
Step 1 is to identify and define the problem.
Step 2 is to generate and evaluate alternative
courses of action.
Step 3 is to decide on a preferred course of
action.
Step 4 is to implement the decision.
Step 5 is to evaluate results.

12. Determining Information Need
Data Flow Methods
End of chapter 9