Chapter 7 - Chapter 7 INFORMATION AND DECISION MAKING...

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Chapter 7: INFORMATION AND DECISION MAKING CHAPTER 7 OVERVIEW As rapid advances in information technology sweep through modern organizations, innovations in learning, problem solving, and knowledge management have occurred. This chapter describes the opportunities and challenges that information technology (IT) creates and the impact of IT on managerial decision making. The chapter begins by examining how IT is changing business practices, organizations, and the ways in which work is accomplished. The chapter then discusses how managers use information to make decisions and the types of environments in which decisions are made. Attention is given to the different problem-solving styles that managers may adopt. A detailed discussion of the steps in the decision-making process ensues. These steps include: (1) identifying and defining the problem; (2) generating and evaluating possible solutions; (3) choosing a preferred course of action and conducting an “ethics double- check;” (4) implementing the solution; and 5) evaluating results. Decision-making traps –– including heuristics, the framing error, and escalating commitment –– are identified and their potential biasing effects are described. Also discussed are the potential advantages and disadvantages of group decision making. The chapter concludes by examining the roles of ethics, knowledge management, and organizational learning in both managerial decision making and the development of the organization’s stock of intellectual capital. CHAPTER 7 STUDY QUESTIONS SUMMARY Study Question 1: What is the role of information in the management process? Information technology is breaking barriers within organizations and between organizations to speed work flows and cut costs. Management information systems collect, organize, store, and distribute data to meet the information needs of managers.
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