Simon’s (4) Implementation Phase

“putting a recommended solution to work.”
Turban et al (2007) pg. 69.

• a “new order of things”
• introduces change which needs to be managed

Simon’s (3) Choice Phase

“the actual decision is made and the commitment to follow a certain course of action is made.”
Turban et al (2007) pg. 68.

Described as the critical act of decision-making

• Decision is made

1. Choose the optimum / ‘best’ course of action

• Commitment given to decision

Phase includes:

• Search for
• Evaluation of
• Recommendation of
• the optimum / ‘best’ course of action

Simon’s (1) Intelligence Phase

“the decision maker examines reality and identifies and defines the problem. Problem ownership is established as well.”
Turban et al (2007) pg. 53.

• Problem Identification via

1. Scanning - Gathering information & data

1. External sources
2. Internal sources

• Problem Classification
• Problem decomposition
• Problem ownership

Herbert Simon’s model

Four phases of decision-making:

Intelligence Phase –
identify the problem
“the decision maker examines reality and identifies and defines the problem. Problem ownership is established as well.”

Design Phase
build a model to generate alternatives
“finding or developing and analyzing possible courses of action.”

Choice Phase
develop and choose a solution
“the actual decision is made and the commitment to follow a certain course of action is made.”

Implementation Phase
implement the solution
“putting a recommended solution to work.”

Decision-making as an organised & structured process:

Providing decision support in an organised and effective way assumes that decision-making can be modelled and analysed as a general, structured process.

If so, a generalised model of decision-making can become a basis for a systematic approach to decision support.

E.g. Herbert Simon’s ‘model’ of decision-making.

How support is provided

If decision-making is a process of choosing among alternatives to achieve a goal …

• What type of support is needed?
• How can we provide the support required?

Decision-making

A problem-solving process that has been preceded by a problem-finding process.

The means through which a manager seeks to achieve a desired result.

The choice of the optimal solution to a problem.
or
the choice of a satisfactory solution to a problem.

What are decisions?

'A decision is made when we choose one alternative from a set of two or more alternative solutions to a particular problem.'

Three aspects of making a decision:

• We have a problem;
• We have a set of two or more alternative solutions to the problem;
• We choose one of these alternatives as THE solution to the problem.

Whenever we make a decision, we are using some criteria to evaluate each of the alternatives so that we can choose the best one. Sometimes we may not be aware what the criteria are, but they are always there.

We now have four aspects of making a decision:

• We have a problem;
• We have a set of two or more alternative solutions to the problem;
• We have a criteria to use to provide a comparative 'value' for each of the alternatives;
• We choose one of these alternatives as THE solution to the problem based on its value according to the criteria.

Every decision is an attempt to choose a solution to a problem.
A decision is only meaningful if there are at least two alternative solutions to choose from.

To make an effective choice between the alternatives we need to establish some criteria to use to compare the alternatives.

Using the criteria we can give a value to each of the alternatives.

By comparing the values of each alternative we can choose the best one.

The alternative we choose is our solution to the problem, it is our decision.

Operations research approach (OR) / Management Science

1. Define the problem (decision situation with difficulty or opportunity)
2. Classify the problem into a standard category
3. Construct a model that describes a real world problem
4. Identify possible solutions to the modelled problem and evaluate solutions
5. Compare, choose and recommend a potential solution to the problem.

Differs to Simon's Decision Making Process because t seeks to classify a problem into a standard category.

Based on mathematical modelling which transforms a world problem into an appropriate prototype.

Simon's decision making process pg 15

1. Define the problem (decision situation with difficulty or opportunity)
2. Classify the problem into a standard category
3. Construct a model that describes a real world problem
4. Identify possible solutions to the modelled problem and evaluate solutions
5. Compare, choose and recommend a potential solution to the problem.

Operational Decisions, Managerial Decisions, Strategic Decisions

Examples of each in my life:

Operational: Menu Planning - What will be eaten, where will the ingrediants be purchased and when will purchasing occur happen.

Managerial: Who will do the shopping, how much can spent?

Strategic: Keeping frozen dinners

Technologies for Decision-Making Processes

Structured (Programmed) : MIS, Management Science Models, Transaction Processing

Semistructured : DSS, KMS, GSS, CRM, SCM

Unstructured (Unprogrammed) : GSS, KMS, ES, Neural networks

Factors affecting Decision-Making

New technologies and better information distribution have resulted in more alternatives for management.
So many new technologies have presented so many different tools, strategies and alternatives. This affects decision making becuase there is alot more to consider.

Complex operations have increased the costs of errors, causing a chain reaction throughout the organisation
An error in a decision can ripple through an organistion very quickly these days.

Rapidly changing global economies and markets are producing greater uncertainty and requiring faster response in order to maintain competitive advantages.
The world moves fast and decision must be made quickly.

Increasing governmental regulation coupled with political destabilization have caused great uncertainty.
The need to be ready for anything - govt mandates

discuss at an introductory level how information technology can be used to assist managerial decision-making;

• Speedy computations
• Improved communications and collaboration
• Increased productivity of group members
• Improved data management
• Mnaging giant data warehouses
• Quality support
• Agility support
• Overcomming cognitive limits in processing and storing information
• Using the web
• Anywhere anytime support

Highly suitable for structured and semi structured problems.

Decision Making defined

Decision Making is a process of choosing among two or more alternative courses of action for the purpose of attaining a goal or goals.

Decision making process

Intelligence: Searching for conditions that call for decisions.

Design: Inventing, developing, and analyzing possible alternative courses of actions (solutions)

Choice: Selecting a course of action from among those available

Implementation: Adapting the selected course of action to the decision situation (ie. problem solving or opportunity exploiting)