9/11/2009

MANAGERIAL SENSE-MAKING:
INFORMATION & MANAGERS:
DECISION • Create mental maps
M A K I N G • Are problem solvers, decision makers
• Are information processors
p
• Create & support information
processing
Prepared By Ratna Dwi Wulandari
Dept. Administration & Health Policy
School of Public Health – University of Airlangga

MANAGERIAL ROLES
(Mintzberg): Wrapp’s SUCCESSFUL MANAGER:

Interpersonal: figureheads & leaders OPERATING

GENERAL MANAGER
Informational: receive; disseminate critical info PROBLEMS
Decisional: initiate activities; handle
disturbances; allocate resources; negotiate OPERATING DECISIONS
conflicts

CORPORATE STRATEGY

Decision Structure TYPES OF DECISIONS

• Structured – situations where the procedures • STRUCTURED:
to follow when a decision is needed can be – Repetitive; routine; definite procedure; certainty
specified in advance • SEMISTRUCTURED:
• Unstructured – decision situations where it is – One or more factors not structured; risk
not possible to specify in advance most of the • UNSTRUCTURED:
decision procedures to follow – Unique; non-routine; uncertainty; requires
• Semistructured - decision procedures that judgment
can be prespecified, but not enough to lead to
a definite recommended decision

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LEVELS OF DECISION MAKING
• STRATEGIC: Long-term objectives;
resources; policies
• TACTICAL:
– MANAGEMENT CONTROL
CONTROL: Monitor use of
resources; performance
– KNOWLEDGE-BASED: Evaluate potential
innovations; knowledge
• OPERATIONAL: How to carry out specific
day-to-day tasks
Levels of Management Decision Making
• Operational management
– Managers or members of self-directed teams
– Develop short-range plans such as weekly
production schedules
INDIVIDUAL MODELS OF DECISION
MAKING
• RATIONAL: Comprehensive rationality;
evaluate all alternatives
• SATISFICING: Bounded rationality;
choose first “good”
good alternative
• MUDDLING: Successive comparison;
marginal changes
• PSYCHOLOGICAL: Cognitive types;
manages differ in how they make choices
9/11/2009
Levels of Management Decision Making
• Strategic management
– Executives develop organizational goals, strategies,
policies, and objectives
– As part of a strategic planning process
• Tactical management
g
– Managers and business pprofessionals in self-directed
teams
– Develop short- and medium-range plans, schedules and
budgets
– Specify the policies, procedures and business objectives
for their subunits
STAGES OF DECISION MAKING
• INTELLIGENCE: Collect information;
identify problem
• DESIGN: Conceive alternatives; select
criteria
• CHOICE: Use criteria to evaluate
alternatives; select
• IMPLEMENTATION: Put decision into
effect; allocate resources; control
SOURCE: Simon, The New Science of Management Decision (1960)
ORGANIZATIONAL MODELS OF
DECISION MAKING
• RATIONAL ACTOR: Maximize
organization’s benefits
• BUREAUCRATIC: Follow standard operating
procedures (SOP)
p
• POLITICAL: Key groups compete and
bargain
• “GARBAGE CAN”: Organizations not
rational; solutions accidental
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Information required at
INFO SYSTEMS, LEVELS, DECISIONS different management levels
ORGANIZATIONAL LEVEL
TYPE OF
DECISION OPERATIONAL KNOWLEDGE MANAGEMENT STRATEGIC

STRUCTURED ACCOUNTS
RECEIVABLE
ELECTRONIC PRODUCTION
SCHEDULING COST OVERRUNS
TPS
OAS MIS
SEMI- BUDGET
STRUCTURED PREPARATION

PROJECT
SCHEDULING DSS
FACILITY
LOCATION
KWS ESS
UNSTRUCTURED PRODUCT DESIGN NEW PRODUCTS
NEW MARKETS

Information Systems to support decisions

Management
Information
Decision
Support
DECISION
Decision
Systems
Provide information about
Systems
Provide information and
SUPPORT
support
provided
the performance of the
organization
techniques to analyze
specific problems SYSTEMS
Information Periodic, exception, Interactive inquiries and
form and demand, and push reports responses
frequency and responses
(DSS)
Information Prespecified, fixed format Ad hoc, flexible, and
format adaptable format

Information Information produced by Information produced by

processing extraction and manipulation analytical modeling of
methodology of business data business data

Decision Support Trends Decision Support Systems

Provide interactive information support to
• Personalized proactive decision analytics managers and business professionals during
the decision-making process
• Web-Based applications • Use:
• Decisions at lower levels of management – Analytical models
and
d by
b tteams and d iindividuals
di id l – Specialized
Sp ci liz d ddatabases
t b s s
– A decision maker’s own insights and
• Business intelligence applications judgments
– Interactive computer-based modeling
• To support semistructured business
decisions

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DSS components DSS Model base

• Model base
– A software component that consists of
models used in computational and analytical
routines that mathematically
y express
p
relations among variables
• Examples:
– Linear programming models,
– Multiple regression forecasting models
– Capital budgeting present value models

Using DSS Using DSS

• What-if Analysis
– End user makes changes to variables, or
relationships among variables, and observes
g changes
the resulting g in the values of f other
variables
• Sensitivity Analysis
– Value of only one variable is changed
repeatedly and the resulting changes in
other variables are observed
• Goal-Seeking
– Set a target value for a variable and then
repeatedly change other variables until the
target value is achieved
– How can analysis
• Optimization
– Goal is to find the optimum value for one or
more target variables given certain constraints
– One or more other variables are changed
repeatedly until the best values for the target
variables are discovered