Summary

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Questions ...................................................................................................................................... 2
Questions
1. What caused the latest revolution in management use of computers? List at least two
causes.
a. Internet
b. World Wide Web
2. List and define the three phases of the decision-making process (according to Simon).
a. Intelligence

In the first stage, that of intelligence, they collect information about the issue from
the environment and the surrounding context.

b. Design

Decide on the criteria by which to make the decision. The criteria may be weighted
and these weights are applied in a formal manner, often with the help of a
mathematical model. Once a solution is available, the decision maker may be
satisfied with the answer or may return to earlier stages to redo the process.

c. Choice

At the choice stage, the criteria and parameters for the decision help curtail the
amount of search required to arrive at a decision. If the criteria are not specified
sharply then the number of alternatives to be considered to arrive at a decision
may be very large.

This stage may also require returning to the intelligence gathering activity, and
then to the design stage to change or modify the criteria and the weights used to
apply them. In his seminal work, Herbert

DSS are designed to support mainly the choice stage of the decision-making
process.

Managers can enter the relevant data into the system, select or prioritise their
criteria and let the system decide on the final solution.

3. Define DSS.
a. A decision support system (DSS) is an information system that supports
business or organizational decision-making activities. DSSs serve the
management, operations and planning levels of an organization (usually mid
and higher management) and help people make decisions about problems that
may be rapidly changing and not easily specified in advance—i.e. unstructured
and semi-structured decision problems. Decision support systems can be
either fully computerized or human-powered, or a combination of both.
While academics have perceived DSS as a tool to support decision making
processes, DSS users see DSS as a tool to facilitate organizational processes.
4. Discuss the major characteristics of DSS.
 Facilitation. DSS facilitate and support specific decision-making activities
and/or decision processes.
 Interaction. DSS are computer-based systems designed for interactive use by
decision makers or staff users who control the sequence of interaction and the
operations performed.
  Ancillary. DSS can support decision makers at any level in an organization.
They are NOT intended to replace decision makers.
 Repeated Use. DSS are intended for repeated use. A specific DSS may be used
routinely or used as needed for ad hoc decision support tasks.
 Task-oriented. DSS provide specific capabilities that support one or more tasks
related to decision-making, including: intelligence and data analysis;
identification and design of alternatives; choice among alternatives; and
decision implementation.
 Identifiable. DSS may be independent systems that collect or replicate data
from other information systems OR subsystems of a larger, more integrated
information system.
 Decision Impact. DSS are intended to improve the accuracy, timeliness, quality
and overall effectiveness of a specific decision or a set of related decisions.
5. List five major benefits of DSS.
 Improves performance and effectiveness of the user
 Allows for faster decision-making
 Reduces the time taken to solve problems
 These combine to save money!
 Has been seen to improve collaboration and communication within groups
 Reduces training times because the experience of experts is available within
the programs algorithms
 Provides more evidence in support of a decision
 May increase decision-maker satisfaction
 Providing different perspectives to a situation
 Helps automate various business systems
6. Why is management often equated with decision-making?
a. Decision-making is an integral part of modern management. Essentially,
Rational or sound decision making is taken as primary function of management.
Every manager takes hundreds and hundreds of decisions subconsciously or
consciously making it as the key component in the role of a manager. Decisions
play important roles as they determine both organizational and managerial
activities. A decision can be defined as a course of action purposely chosen
from a set of alternatives to achieve organizational or managerial objectives or
goals. Decision making process is continuous and indispensable component of
managing any organization or business activities. Decisions are made to
sustain the activities of all business activities and organizational functioning.
7. Discuss the major trends that affect managerial decision-making.

Decisions are typically made under one of three conditions:

 Certainty
 Risk and
 Uncertainty

These conditions are based on the amount of knowledge the decision maker has regarding the
final outcome of the decision. The manager's decision depends on a number of factors, like the
manager's knowledge, experience, understanding and intuition.

Under such conditions managers need to make certain assumptions about the situation in
order to provide a reasonable framework for decision making. Intuition, judgment, and
experience always play a major role in the decision making process under conditions of
uncertainty.

The decision-making process involves the following steps −

 Define the problem

 Identify limiting factors

 Develop potential alternatives

 Analyze and select the best alternatives

 Implement the decision

8. Define management science.

Management science is the broad interdisciplinary study of problem solving and decision
making in human organizations, with strong links to management, economics, business,
engineering, management consulting, and other fields. It uses various scientific research-
based principles, strategies, and analytical methods including mathematical modeling,
statistics and numerical algorithms to improve an organization's ability to enact rational
and accurate management decisions by arriving at optimal or near optimal solutions to
complex decision problems. Management science helps businesses to achieve goals using
various scientific methods.

The field was initially an outgrowth of applied mathematics, where early challenges were
problems relating to the optimization of systems which could be modeled linearly, i.e.,
determining the optima (maximum value of profit, assembly line performance, crop yield,
bandwidth, etc. or minimum of loss, risk, costs, etc.) of some objective function. Today,
management science encompasses any organizational activity for which the problem can
be structured as a functional system so as to obtain a solution set with identifiable
characteristics.

9. Define structured, semistructured, and unstructured decisions.

 Structures Decisions

Structured decision making is an approach for careful and organized analysis of natural
resource management decisions. Based in decision theory and risk analysis, SDM encompasses
a simple set of concepts and helpful steps, rather than a rigidly-prescribed approach for
problem solving.

 Semistructured Decisions

Semistructured decisions: these decisions have elements of both structured and semi
structured decisions. Only part of the problem has a clear-cut answer provided by accepted
procedure. A semi structured decision is one which is partially programmable but still requires
human judgement.

 Unstructured Decisions

Unstructured decisions: These decisions require judgement, evaluation and insight to solve the
problem. Unstructured means “decision processes that have not been encountered in quite
the same form and for which no predetermined and explicit set of ordered responses exists in
the organization”. (Mintzberg, et al., 1976, 246) These decisions are seen as novel, important
and non-routine. There is no well understood procedure for making them. An example of an
unstructured decision that management may face could be deciding if the company should
enter into a new market or would it be more beneficial for them to stay in just their current
market. Information systems help to make such decisions.

10. Search the Internet for material regarding the work of managers, the need for
computerized support, and the role decision support systems play in providing such
support. What kind of references to consulting firms, academic departments, and
programs do you find? What major areas are represented? Select five sites that cover
one area and report your findings.

First, managers and computer users in many organizations are familiar with only a few of the
types of systems now in use. As a result, different types of innovative systems have often been
conceived and nurtured by internal or external “entrepreneurs,” not by the system users or
their superiors.

Second, and closely related to my first finding, these entrepreneurs tend to concentrate on
technical characteristics. Too often, this myopia means that they fail to anticipate the ways in
which such systems can be used to increase the effectiveness of individuals in organizations.

Finally, highly innovative systems—the very ones management should find most useful—run a
high risk of never being implemented, especially when the impetus for change comes from a
source other than the potential user.

Types of Decision Support Systems

While there are many ways to categorize computer systems, a practical one is to compare
them in terms of what the user does with them:

Retrieves isolated data items.

Uses as a mechanism for ad hoc analysis of data files.

Obtains prespecified aggregations of data in the form of standard reports.

Estimates the consequences of proposed decisions.

Proposes decisions.

Makes decisions.

As Exhibit I indicates, EDP reporting systems usually perform only the third function in this list
of operations, which I have organized along a dimension from “data-orientation” to “model-
orientation.” Hence, unlike the EDP user who receives standard reports on a periodic basis, the
decision support system user typically initiates each instance of system usage, either directly
or through a staff intermediary.

11. Access sap.com and peoplesoft.com and find information on how enterprise resource
planning (ERP) software helps decision-makers. In addition, examine how these
software products utilize Web technology, and the Web itself.

Example of SAP working in the Real World

One global agriculture corporation improves efficiency by saving time for both shipping clerks
and truck drivers during goods delivery at a plant. The company used SAP Cloud Platform to
quickly build a mobile app for its drivers that connects with its core solutions. The specific app
allows truck drivers to see wait times before they arrive at the plant and easily check-in and
process their load weight without getting out of their trucks. This not only improves efficiency,
but keeps drivers safer as well. As a result, products are delivered quicker, and since it’s
connected to the end-to-end process, business leaders have instant access to the latest
shipment data. This creates a win-win situation for drivers, plant staff, business leaders, and
customers alike.

Today’s digital consumers demand top-notch customer service, seamless interactions, and
data integrity as they switch between different interaction channels. Creating a great user
experience means more than just giving people a better user interface (UI), it’s about
exceeding their expectations. Customers aren’t the only ones demanding a better user
experience; employees also crave better functionality to simplify their jobs. Employees need
an intuitive UI that is specific to their role with all the data they need to manage their daily
tasks and make better decisions