10 Improving Decision Making and Managing Knowledge Flashcards
What is decision making?
A mental process, whose outcome – the decision – is the selection of an opinion or course of action among several choices.
How do individuals operate during decision making?
Individuals operate within a framework of bounded rationality:
• Limited knowledge
• Limited capacity to know
When are decisions made in a firm?
Decisions made at all levels of the firm
• Some are common, routine, and numerous
• Although value of improving any single decision may be small, improving hundreds of
thousands of “small” decisions adds up to large annual value for the business
What are the types of decisions?
- Unstructured
- Structured
- Semi-structured
What are unstructured decisions, who uses?
Used by Senior Management
• Decision maker must provide judgment to solve problem
• Novel, important, non-routine
• No well-understood or agreed-upon procedure for making them
What are structured decisions, who uses?
Used by Operational Management (individual employees/teams)
• Repetitive and routine
• Involve definite procedure for handling them so do not have to be treated as new
What are semi-structured decisions, who uses?
Used by Middle Management.
• Only part of problem has clear-cut answer provided by accepted procedure.
What is the decision-making process?
- Intelligence
- Design
- Choice
- Implementation
What occurs during the intelligence stage of the decision-making process?
Discovering, identifying, and understanding the problems occurring in the organisation.
What occurs during the design stage of the decision-making process?
Identifying and exploring various solutions.
What occurs during the choice stage of the decision-making process?
Choosing best option among solution alternatives.
What occurs during the implementation stage of the decision-making process?
Making chosen alternative work and monitoring
how well solution is working.
What are the different qualities of decisions?
- Accuracy
- Comprehensiveness
- Fairness
- Speed (efficiency)
- Coherence
- Due Process
What is the description for accuracy?
Decision reflects reality.
What is the description for comprehensiveness?
Decision reflects a full consideration of the facts and circumstances.
What is the description for fairness?
Decision faithfully reflects the concerns and interests of affected parties.
What is the description for speed (efficiency)?
Decision making is efficient with respect to time and other resources, including the time and resources of affected parties, such as customers
What is the description for coherence?
Decision reflects a rational process that can be explained to others and made understandable.
What is the description for due process?
Decision is the result of a known process and can be appealed to a higher authority.
What does knowledge management involve?
Involves capturing, classifying, evaluating, retrieving and sharing information assets in a way that provides context for effective decisions and actions.
What do knowledge management systems do?
- Support the capturing and use of an organisation’s ‘know-how’
- Include databases, e-learning applications, discussion and chat technologies, search and data mining tools
- Should foster innovation, improve customer service, boost revenues, enhance employee relations and streamline operations
What are the benefits of knowledge management?
- improved organisational agility
- better and faster decision making
- quicker problem-solving
- increased rate of innovation
- supported employee growth and development • sharing of specialist expertise (tacit knowledge) • better communication
- improved business processes
What are the challenges of knowledge management?
• finding ways to efficiently capture and record business knowledge
• making information and resources easier to find
• motivating people to share, reuse and apply knowledge
consistently
• aligning knowledge management with the overall goals and business strategy
• choosing and implementing knowledge management technology
• integrating knowledge management into existing processes and information systems
What does the term Business Intelligence (BI) refer to?
Refers to technologies, applications and practices for the collection, integration, analysis, and presentation of business information.
What is the purpose of Business Intelligence?
To support better business decision making. Essentially, Business Intelligence systems are data-driven Decision Support Systems (DSS).
When can Business Intelligence be used interchangeably?
Business Intelligence is sometimes used interchangeably with briefing books, report and query tools and executive information systems.
What are six elements in the BI environment?
- Data from business environment
- Business intelligence infrastructure
- Business analytics toolset
- Managerial users and methods
- Delivery platform
• MSS, DSS, ESS - User interface
`What are predictive analytics?
Uses statistical analytics, data mining, historical data; assumptions of future conditions.
What does predictive analytics do?
Extracts information from data to predict future trends and behaviour patterns
• Responses to direct marketing campaigns
• Best potential customers for credit cards
• At-risk customers
• Customer response to price changes and new services
What are Big Data Analytics?
The often complex process of examining large and varied data sets – or big data – to uncover information including hidden patterns, unknown correlations, market trends and customer preferences that can help organisations make informed business decisions.
