Analyzing Information for Business Decision-Making

Flashcards covering key concepts from the lecture 'Analyzing Information for Business Decision-Making', including types of decisions, decision-making skills, biases, processes, challenges, and tools.

Gorry and Scott-Morton’s Information Systems Framework: Three types of decision structures

Structured, Semi-structured, and Unstructured.

Gorry and Scott-Morton's framework: 'Structured' operational control decisions include

Accounting systems (accounts payable/receivable), order processing, and inventory control.

Why are good decision-making skills highly valued in business professionals?

They are among the most highly sought-after skills for potential employees and are directly related to the ability to solve complex problems.

List some common reasons why managers make bad decisions.

Addressing the wrong objective, poor decision-making skills, time pressures, relying too much on intuition, being overconfident, and going with the group.

Negativity bias in decision-making

Giving more weight to negative than to positive experiences or information.

Loss aversion as a decision-making bias

Making losses more important than equal gains.

The 'Gambler’s fallacy'

Believing that random events are influenced by previous random events.

Simon's Model: Four general stages of the decision-making process

Intelligence, Design, Choice, and Implementation.

Activities in the 'Intelligence' phase of decision-making

Sensing conditions and predicting what conditions will require action.

Expanded steps in the 'Design' phase for Information Systems decision-making

Determine requirements and goals, identify alternatives, define decision criteria, and select a tool.

Information systems used during the 'Intelligence' phase

Data analysis (spreadsheets, statistical software, visualization), communication systems, and data retrieval and document management systems.

Purpose of the '5 Whys' technique

To uncover the root cause of a problem by repeatedly asking 'why?'.

What is the difference between 'requirements' and 'goals' in decision-making?

Requirements are 'must-have' minimums, while goals are 'like to have' elements beyond essential requirements.

'Decision criteria'

Objective measures of the requirements and goals that help discriminate among alternatives.

Characteristic of the 'Pros and Cons' decision-making tool

It lists advantages and disadvantages and is highly subjective for simple decision-making.

How does a 'Weighted Decision Matrix' enhance decision-making compared to an unweighted one?

It assigns numerical weights to different decision criteria, reflecting their relative importance, which allows for a more nuanced evaluation.

Name two types of tools used for information retrieval and analysis.

Database Management Systems, Reporting Tools, or Document Management Tools.

Spreadsheet function to find input for a target outcome

Goal Seek.

Primary benefit of data visualization software

It helps users identify trends and patterns in data more easily.

Data Visualization

A visual representation of data with the goal of clearly communication or better understanding the meaning of the data

Decision

A choice among alternatives

Decision alternative

A method for transforming the current condition into the desired state

Decision criteria

Objective measures of decision requirements and goals that discriminate among the alternatives

Decision goal

Desired decision solution requirements that go beyond the minimum, essential requirements

Document management system

A system that assists with managing, locating, retrieving and tracking documents

Goalseek analysis

An analysis that determines the value of a particular input variable that will produce the desired output (the goal)

Reporting tools

Information systems tools that allow users to create reports without knowing special commands

Requirements

A condition that any acceptable solution must provide

Semi structured decision

a decision for which some elements are structured and others are unstructured

structured decision

A decision that is routine and repetitive ad often has well defined procedures for making it

unstructured decision

a decision that is noble and therefore has no agreed-upon, well-understood procedures for making it

what-if analysis

an analysis that involves seeing how changes in one or more input variables impact the value of one or more outcome variables. Also known as sensitivity analysis