Chapter Eleven Notes.docx

Chapter Eleven Notes.docx - Introduction Business...

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Introduction Business analytics (BA): is the process of developing actionable decisions or recommendations for actions based on insights generated from historical data - It examines data with a variety of tools and techniques, formulates descriptive, predictive, and prescriptive models, and communicates these results to organizational decision makers Business intelligence (BI): a broad category of applications, technologies, and processes for gathering, storing, accessing, and analyzing data to help business users make better decision 5.1 Managers and Decision Making Management: is a process by which an organization achieves its goals through the use of resources (people, money, materials, and information) - These resources are considered to be inputs - Achieving the organization’s goals is the output of the process - A manager’s success is often measured by the ratio between the inputs and output for which he or she is responsible o This ratio is an indication of the organization’s productivity Productivity: the ratio between the inputs to a process and the outputs from that process The Manager’s Job and Decision Making All managers perform three basic roles: 1. Interpersonal roles: figurehead, leader, liaison 2. Informational roles: monitor, disseminator, spokesperson, analyzer 3. Decisional roles: entrepreneur, disturbance handler, resource allocator, negotiator Decision: refers to a choice among two or more alternatives that individuals and groups make - The decision-making process starts with the intelligence phase, in which managers examine a situation and then identify and define the problem or opportunity - In the design phase, decision makers construct a model for addressing the situation o They perform this task by making assumptions that simplify reality and by expressing the relationships among all of the relevant variables o Finally, decision makers set criteria for evaluating all of the potential solutions that are propose - The choice phase, involves selecting a solution or course of action that seem best suited to resolve the problem o The solution is then implemented Why Managers Need IT Support When information is available, decision-making is difficult due to the following trends:
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1. The number of alternatives is constantly increasing, due to innovations in technology, improved communications, the development of global markets, and the use of the internet a. A key to good decision making is to explore and compare many relevant alternatives b. The greater the number of alternatives, the more a decision maker needs computer-assisted searches and comparisons 2. Most decisions must be made under time pressure. It is not possible to manually process information fast enough to be effective 3. Due to increased uncertainty in the decision environment, decisions are becoming more complex. It is usually necessary to conduct a sophisticated analysis in order to make a good decision 4. It often is necessary to rapidly access remote information, consult with
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