10 Improving Decision Making and Managing Knowledge

Question 1

What is decision making?

Answer 1

A mental process, whose outcome – the decision – is the selection of an opinion or course of action among several choices.

Question 2

How do individuals operate during decision making?

Answer 2

Individuals operate within a framework of bounded rationality:
• Limited knowledge
• Limited capacity to know

Question 3

When are decisions made in a firm?

Answer 3

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

Question 4

What are the types of decisions?

Answer 4

• Unstructured
• Structured
• Semi-structured

Question 5

What are unstructured decisions, who uses?

Answer 5

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

Question 6

What are structured decisions, who uses?

Answer 6

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

Question 7

What are semi-structured decisions, who uses?

Answer 7

Used by Middle Management.

• Only part of problem has clear-cut answer provided by accepted procedure.

Question 8

What is the decision-making process?

Answer 8

1. Intelligence
2. Design
3. Choice
4. Implementation

Question 9

What occurs during the intelligence stage of the decision-making process?

Answer 9

Discovering, identifying, and understanding the problems occurring in the organisation.

Question 10

What occurs during the design stage of the decision-making process?

Answer 10

Identifying and exploring various solutions.

Question 11

What occurs during the choice stage of the decision-making process?

Answer 11

Choosing best option among solution alternatives.

Question 12

What occurs during the implementation stage of the decision-making process?

Answer 12

Making chosen alternative work and monitoring

how well solution is working.

Question 13

What are the different qualities of decisions?

Answer 13

• Accuracy
• Comprehensiveness
• Fairness
• Speed (efficiency)
• Coherence
• Due Process

Question 14

What is the description for accuracy?

Answer 14

Decision reflects reality.

Question 15

What is the description for comprehensiveness?

Answer 15

Decision reflects a full consideration of the facts and circumstances.

Question 16

What is the description for fairness?

Answer 16

Decision faithfully reflects the concerns and interests of affected parties.

Question 17

What is the description for speed (efficiency)?

Answer 17

Decision making is efficient with respect to time and other resources, including the time and resources of affected parties, such as customers

Question 18

What is the description for coherence?

Answer 18

Decision reflects a rational process that can be explained to others and made understandable.

Question 19

What is the description for due process?

Answer 19

Decision is the result of a known process and can be appealed to a higher authority.

Question 20

What does knowledge management involve?

Answer 20

Involves capturing, classifying, evaluating, retrieving and sharing information assets in a way that provides context for effective decisions and actions.

Question 21

What do knowledge management systems do?

Answer 21

• 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

Question 22

What are the benefits of knowledge management?

Answer 22

• 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

Question 23

What are the challenges of knowledge management?

Answer 23

• 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

Question 24

What does the term Business Intelligence (BI) refer to?

Answer 24

Refers to technologies, applications and practices for the collection, integration, analysis, and presentation of business information.

Question 25

What is the purpose of Business Intelligence?

Answer 25

To support better business decision making. Essentially, Business Intelligence systems are data-driven Decision Support Systems (DSS).

Question 26

When can Business Intelligence be used interchangeably?

Answer 26

Business Intelligence is sometimes used interchangeably with briefing books, report and query tools and executive information systems.

Question 27

What are six elements in the BI environment?

Answer 27

1. Data from business environment
2. Business intelligence infrastructure
3. Business analytics toolset
4. Managerial users and methods
5. Delivery platform
   • MSS, DSS, ESS
6. User interface

Question 28

`What are predictive analytics?

Answer 28

Uses statistical analytics, data mining, historical data; assumptions of future conditions.

Question 29

What does predictive analytics do?

Answer 29

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

Question 30

What are Big Data Analytics?

Answer 30

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.