Decision Making Stages Essay

Decision making (decision from Latin decidere â€Å"to decide, determine,† literally â€Å"to cut off,† from de- â€Å"off† and caedere â€Å"to cut†) can be regarded as the mental processes (cognitive process) resulting in the selection of a course of action among several alternative scenarios. Every decision making process produces a final choice.[1] The output can be an action or an opinion of choice. * | Decision making stages Developed by B. Aubrey Fisher, there are four stages that should be involved in all group decision making. These stages, or sometimes called phases, are important for the decision making process to begin Orientation stage – This phase is where members meet for the first time and start to get to know each other. Conflict stage – Once group members become familiar with each other, disputes, little fights and arguments occur. Group members eventually work it out. Emergence stage – The group begins to clear up vague opinions by talking about them. Reinforcement stage – Members finally make a decision, while justifying themselves that it was the right decision. It is said that critical norms in a group improves the quality of decisions, while the majority of opinions (called consensus norms) do not. This is due to collaboration between one another, and when group members get used to, and familiar with, each other, they will tend to argue and create more of a di spute to agree upon one decision. This does not mean that all group members fully agree — they may not want argue further just to be liked by other group members or to â€Å"fit in†.[12] Q2 A management information system (MIS) is a system that provides information needed to manage organizations effectively. Management information systems are regarded to be a subset of the overall internal controls procedures in a business, which cover the application of people, documents, technologies, and procedures used by management accountants to solve business problems such as costing a product, service or a business-wide strategy. Applications of MIS ———With computers being as ubiquitous as they are today, there’s hardly any large business that does not rely extensively on their IT systems. However, there are several specific fields in which MIS has become invaluable. Strategy Support While computers cannot create business strategies by themselves they can assist management in understanding the effects of their strategies, and help enable effective decision-making. ï  ¶ MIS systems can be used to transform data into information useful for decision ma king. Computers can provide financial statements and performance reports to assist in the planning, monitoring and implementation of strategy. MIS systems provide a valuable function in that they can collate into coherent reports unmanageable volumes of data that would otherwise be broadly useless to decision makers. By studying these reports decision-makers can identify patterns and trends that would have remained unseen if the raw data were consulted manually. ï  ¶ MIS systems can also use these raw data to run simulations – hypothetical scenarios that answer a range of ‘what if’ questions regarding alterations in strategy. For instance, MIS systems can provide predictions about the effect on sales that an alteration in price would have on a product. These Decision Support Systems (DSS) enable more informed decision making within an enterprise than would be possible without MIS systems. Q3 Information Resources Management (IRM) is an emerging discipline that helps managers assess and exploit their information assets for business development. It draws on the techniques of information science (libraries) and information systems (IT related). It an important foundation for knowledge management, in that deals systematically with explicit knowledge. Knowledge centres often play an important part in introducing IRM into an organization. Identification:- * Identifies gaps and duplication of information * Clarifies roles and responsibilities of owners and users of information * Provide costs saving in the procurement and handling of information * Identifies cost/benefits of different information resources * Actively supports management decision processes with quality information Development :- 1. Understand the role of Information. Information can add value to your products and services. Improved information flows can improve the quality of decision making and internal operations. Yet many managers do not fully understand the real impact of information – the cost of a lost opportunity, of a poor product, of a strategic mistake – all risks that can be reduced by using the appropriate information. 2. Assign Responsibility for Leading your IRM Initiative. Developing value from information resources is often a responsibility that falls between the cracks of several departments – the user departments in different business units, and corporate planning, MIS units or librarians.. 3. Develop Clear Policies on Information Resources Policies for ascertaining information needs, acquiring and managing information throughout its life cycle. Pay particular attention to ownership, information integrity and sharing. Make the policies consistent with your organisational culture. 4. Conduct an Information Audit (Knowledge Inventory). Identify current knowledge and information resources (or entities), their users, usage and importance. Identify sources, cost and value. Classify information and knowledge by its key attributes. Develop knowledge maps. As knowledge management gains prominence, this is sometimes called a knowledge inventory â€Å"knowing what you know†. 5. Link to Management Processes. Make sure that key decision and business process are supported with high leverage information. Assess each process for its information needs. 6. Systematic scanning. Systematically scan your business environment. This includes the wider environment – legal and regulatory, political, social, economic and technological – as well as the inner environment of your industry, markets, customers and competitors. Provide selective and tailored dissemination of vital signs to key executives. This goes beyond the daily abstracting service provided by many suppliers. 7. Mix hard/soft, internal/external. True patterns and insights emerge when internal and external data is juxtaposed, when hard data is evaluated against qualitative analysis. Tweak your MkIS system to do these comparisons. 7. Optimize your information purchases. You don’t have to control purchasing, but most organisations do not know how much they are really spending on external information. By treating consultancy, market research, library expenses, report and databases as separate categories, many organisations are confusing media with content. 8. Introduce mining and refining processes. Good information management involves ‘data mining’, ‘information refining’ and ‘knowledge editing’. You can use technology such as intelligent agents, to help, but ultimately subject matter experts are needed to repackage relevant material in a user friendly format. One useful technique is content analysis, whose methods have been developed by Trend Monitor International in their Information Refinery, and are used in our analysis services. The classifying, synthesising and refining of information combines the crafts of the information scientist, librarian, business analyst and market researcher/analyst. Yet many organisations do not integrate these disciplines. 9. Develop Appropriate Technological Systems Continual advances in technology increase the opportunities available for competitive advantage through effective information management. In particular, intranets, groupware and other collaborative technologies make it possible for more widespread sharing and collaborative use of information. Advances in text retrieval, document management and a host of other trends in knowledge management technologies have all created new opportunities for providers and users alike. 10. Exploit technology convergence. Telecommunications, office systems, publishing, documentation are converging. Exploit this convergence through open networking, using facilities such as the World Wide Web, not just for external information dissemination but for sharing information internally. 11. Encourage a Sharing Culture Information acquires value when turned into intelligence. Market Intelligence Systems (MkIS) are human expert-centred. Raw information needs interpretation, discussing and analysing teams of experts, offering different perspectives. This know-how sharing is a hall-mark of successful organisations. Q4 Mis use in financial management: Management Information Systems (MIS) in Finance have been widely adopted both by corporations as well as governments. They are information systems with capacity to maintain large data bases enabling organizations to store, organize and access financial information easily. 1. General Ledger * The main use of a management information System (MIS) in finance is that it automatically updates all the transactions in the General Ledger. The General Ledger is the core component of all financial information systems. Financial transactions are simultaneously posted on the various accounts that comprise the organization’s â€Å"Chart of Accounts†. Simultaneous updating of accounts such as sales, inventory and accounts receivable, reduces errors. It also provides an accurate and permanent record of all historical transactions. Cash Management * Cash flow management is an important use of MIS in Finance. Cash Management refers to the control, monitoring and forecasting of cash for financing needs. Use of MIS in Finance helps companies track the flow of cash through accounts receivable and accounts payable accurately. Accurate records also help in monitoring cost of goods sold. This can help pin point areas that eat up cash flow such as inventory costs, high raw material costs or unreliable sales. * Sponsored Links * CFP Certification course ICICIdirect experts help you become a Certified Financial Planner.Apply www.icicidirect.com/CFP Budget Planning * Financial budget planning uses proforma or projected financial statements that serve as as formal documents of management’s expectations regarding sales, expenses and other financial transactions. Thus financial budgets are tools used both for planning as well as control. MIS in finance helps organizations evaluate â€Å"what if† scenarios. By modifying the financial ratios, management can foresee the effects of various scenarios on the financial statements. MIS thus serves as a decision making tool, helping in choosing appropriate financial goals. Financial Reporting * The use of MIS systems in Finance enables companies to generate multiple financial reports accurately and consistently. Generation of financial statements both for internal reports as well as for shareholder information takes less effort because of the automatic updating of the General Ledger. Compliance with Government regulations as well as auditing requirements is also easier because the records are accurate and provide a permanent historical map of transactions that can be verified. Financial Modeling * A financial model is a system that incorporates mathematics, logic and data in the form of a large database. The model is used to manipulate the financial variables that affect earnings thus enabling planners to view the implications of their planning decisions. MIS in Finance enables organizations to store a large amount of data. This helps managers develop accurate models of the external environment and thus incorporate realistic â€Å"what if† scenarios into their long-range planning goal. PRODUCTION MANAGEMENT: Production means transformation of Raw materials into finished products for sale. According to E. L. Brech, â€Å" Production Management is the process of effective planning and regulating the operations of that section of an enterprise which is responsible for the actual transformation of materials into finished products†. 1.Statergic planning 2 tactical planning 3 operational procedure. Q5 computer programs that are derived from a branch of computer science research called Artificial Intelligence (AI). AI’s scientific goal is to understand intelligence by building computer programs that exhibit intelligent behavior. It is concerned with the concepts and methods of symbolic inference, or reasoning, by a computer, and how the knowledge used to make those inferences will be represented inside the machine. Of course, the term intelligence covers many cognitive skills, including the ability to solve problems, learn, and understand language; AI addresses all of those. The Building Blocks of Expert Systems Every expert system consists of two principal parts: the knowledge base; and the reasoning, or inference, engine. The knowledge base of expert systems contains both factual and heuristic knowledge. Factual knowledge is that knowledge of the task domain that is widely shared, typically found in textbooks or journals, and commonly agreed upon by those knowledgeable in the particular field. Heuristic knowledge is the less rigorous, more experiential, more judgmental knowledge of performance. In contrast to factual knowledge, heuristic knowledge is rarely discussed, and is largely individualistic. It is the knowledge of good practice, good judgment, and plausible reasoning in the field. It is the knowledge that underlies the â€Å"art of good guessing.† Knowledge representation formalizes and organizes the knowledge. One widely used representation is the production rule, or simply rule. A rule consists of an IF part and a THEN part (also called a condition and an action). Example: Robotics Use of robots: for example, in industry, health, warfare, airlines, space, underwater exploration Q6 An integral part of any eBusiness system is its database. However, an advanced study of implementing databases is beyond the scope of this course. Here, for now, we are concerned with understanding the role that a database plays in an ebusiness system and in gaining an appreciation for the relational approach to managing data. A relational database turns raw data into persistent structured collections of information. In addition to managing information a database defines the relationships within an ebusiness system. The MIS is supported by database in its endeavor to support the management in decision making. The database models be it the NDBM, the HDBM or the RDBM, play the same role in the MIS. With the latest computer hardware and software capabilities the RDBMS have become popular. The concept of the end user computing can be implemented easily with the database approach to the information system. With the database approach, considerable data processing efforts, which were spent in the approach of the conventional system, are saved. The data is made independent of its application. The MIS designs have become more dependable due to the database and the SQL. The rigidity of the design is replaced by the flexibility of the design. It is now possible to review the applications more frequently from the point of view of utility and have them modified, if necessary. The database has strengthened the foundations of the MIS due to the following: * The database can be evolved to the new needs of the MIS. * The multiple needs can be met with easily. * The data design and the output design is flexible * Open system design of the MIS is possible. * The query handling becomes easier due to the Standard SQL. * User-friendly end user computing is possible. * The data is freed from its ownership and its use has become universal. * The Information Technology provides tools to handle distributed multiple databases making the MIS richer.