LN4_Managerial_Decision_Support_Systems - MGCR 331...

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MGCR 331 – Information Systems (“IT Impacts on Organizations”) Managerial Support Systems – Lecture Note 4 LEARNING OBJECTIVES 1. Describe the concepts of management, decision making (process and types of decision) and computerized support for decision making 2. Describe two types of managerial support systems (Intelligent systems and Decision support systems) and discuss their capabilities and distinctive features. Summary This lecture note discusses a wide range of systems, referred to as managerial support systems (MSS), intended to support the managerial decision making process. These systems by and large do not process transactions. Instead, they provide information to support decision-making (referred to as decision support systems) or provide recommendation to decision makers (referred to as intelligent systems). They may use data collected and processed by a transaction system, but they analyze these data far differently than the transaction systems. First, we highlight the importance of decision making in managerial work. Next we describe the decision making process and discuss various classifications of decisions. Finally, we describe and discuss different types of managerial support systems and their capabilities. Managers and Decision Making Management is a process by which organizational goals are achieved through the use of resources such as people, money, energy, materials, space and time. Managers have three basic roles - Interpersonal roles, Informational roles, and Decisional roles (Mintzberg 1973). Management researchers have emphasized the decision-making nature of management since the 1950s. Certainly, we expect managers to make decisions in many different domains. Important decisions include funding R&D and product development, and the decision to introduce a new product. Many managerial decisions revolve around issues of resource allocation. Almost every organization is confronted with limited resources and competing demands for them. Decision refers to a choice that individuals or groups make among two or more alternatives. Decision Making Process: It is universally agreed that decision making is a key managerial activity-maybe the key activity- that often decides the fate of organizations. That is, good decision making usually ensures the long-term survival of an organization, whereas poor decision making can quickly lead to the demise of an organization. Decision making means recognizing problems, generating alternative 1
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solutions to the problems, choosing among alternatives, and implementing the chosen alternative. The following diagram shows one model of the decision-making process. As illustrated in the above diagram, the decision-making process begins with the definition of the problem requiring a solution or decision. You must be careful at this stage to find the real heart of the problem and not just its symptoms. Problems are not inherently bad; they may actually represent opportunities that can be exploited to gain a competitive advantage. Defining a
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This note was uploaded on 01/31/2011 for the course MGCR MGCR 331 taught by Professor Kerklan during the Fall '10 term at McGill.

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LN4_Managerial_Decision_Support_Systems - MGCR 331...

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