DECISION MAKING

DATA SCIENCE
&
WORK DESIGN
UNIT 4: CLASS 5
 TOPICS COVERED

• IT & DECISION MAKING

• DATA SCIENCE
• WORK DESIGN
 INFORMATION TECHNOLOGY AND
DECISION MAKING

• INTELLECTUAL CAPITAL
THE COLLECTIVE BRAINPOWER OR
SHARED KNOWLEDGE OF A
WORKFORCE THAT CAN BE USED TO
CREATE WEALTH.
IT IS A MAJOR SOURCE OF COMPETITIVE
ADVANTAGE.
 INFORMATION TECHNOLOGY
AND THE NEW WORKPLACE

• ELECTRONIC OFFICE
REFERS TO THE USE OF COMPUTERS AND RELATED
TECHNOLOGIES TO ELECTRONICALLY FACILITATE
OPERATIONS IN AN OFFICE ENVIRONMENT.
 INFORMATION TECHNOLOGY
AND THE NEW WORKPLACE

• ELECTRONIC COMMERCE
CALLED E-BUSINESS AND IT INFORMATION
TECHNOLOGY TO SUPPORT ON-LINE COMMERCIAL
TRANSACTIONS.

AMAZON.COM IS A STRIKING EXAMPLE OF

E-COMMERCE AND ITS DYNAMICS.
 External and Internal Information
Needs of Organizations

Intelligence Public
Information Information
Gathered from the Disseminated to
Top the
external
environment Management external
environment
Formulates strategy,
policies,
long-term plans, and
objectives,
make strategic decisions.
Middle
Managers
Formulate operational plans and objectives
to implement strategy; make operational decisions

First-Level Managers
Implement operational plans and objectives; make
short-run decisions; transact day-to-day business
operations
DEVELOPMENTS IN INFORMATION SYSTEMS

• INFORMATION SYSTEMS

USE IT TO COLLECT, ORGANIZE, AND

DISTRIBUTE DATA FOR USE IN
DECISION MAKING.

• CHIEF INFORMATION OFFICER

SENIOR EXECUTIVE RESPONSIBLE FOR

IT AND IT UTILIZATION THROUGHOUT
AN ORGANIZATION.
 DEVELOPMENTS IN
INFORMATION SYSTEMS

• MANAGEMENT INFORMATION SYSTEMS

USE IT TO MEET THE INFORMATION
NEEDS OF MANAGERS AS THEY MAKE
DECISIONS.
• DECISION SUPPORT SYSTEMS

USE SPECIAL SOFT WARE TO ALLOW

USERS TO INTERACT DIRECTLY WITH A
COMPUTER TO HELP MAKE DECISION
FOR SOLVING COMPLEX PROBLEMS.
DEVELOPMENTS IN INFORMATION SYSTEMS

• GROUP • EXPERT
DECISION- SYSTEMS
SUPPORT
• INTRANETS
SYSTEMS
• EXTRANETS
• GROUPWARE
• INTERORGANIZA
• ARTIFICIAL
TIONAL
INTELLIGENCE INFORMATION
SYSTEMS
INFORMATION AND PROBLEM
SOLVING

• A PROBLEM
IS THE DIFFERENCE BETWEEN AN ACTUAL
SITUATION AND A DESIRED SITUATION.
WHEN THE ACTUAL SITUATION IS LESS THAN
DESIRED IT IS A PERFORMANCE DEFICIENCY
WHEN THE SITUATION TURNS OUT BETTER THAN
ANTICIPATED WE HAVE A PERFORMANCE
OPPORTUNITY
INFORMATION AND PROBLEM
SOLVING

• PROBLEM SOLVING
THE PROCESS OF IDENTIFYING A
DISCREPANCY BETWEEN AN ACTUAL AND
DESIRED STATE OF AFFAIRS, AND THEN
TAKING ACTION TO RESOLVE THE
DISCREPANCY.

THIS PROCESS IS DEPENDENT UPON THE

RIGHT INFORMATION BEING AVAILABLE TO
THE RIGHT PEOPLE AT THE RIGHT TIME.
 TYPES OF MANAGERIAL
PROBLEMS

• STRUCTURED
ONES THAT ARE FAMILIAR, STRAIGHTFORWARD,
AND CLEAR IN RESPECT TO THE INFORMATION
NEEDED TO RESOLVE THEM.

• UNSTRUCTURED
TEND TO OCCUR AS NEW OR UNEXPECTED
SITUATIONS THAT INVOLVE AMBIGUITIES AND
INFORMATION DEFICIENCIES.
 TYPES OF MANAGERIAL
PROBLEMS

• PROGRAMMED DECISIONS
APPLY SOLUTIONS FROM PAST EXPERIENCES TO
THE PROBLEM AT HAND.

• NONPROGRAMMED DECISIONS
DEVELOP UNIQUE SOLUTIONS THAT ARE
SPECIFICALLY TAILORED TO THE SITUATION AT
HAND.
 TYPES OF MANAGERIAL
PROBLEMS

• NONPROGRAMMED DECISIONS ARE

REQUIRED WHEN NEW AND
UNFAMILIAR PROBLEMS ARISE, AND/OR
WHEN STANDARD RESPONSES HAVE
NOT BEEN PREPARED.

• MOST PROBLEMS FACED BY HIGHER-

LEVEL MANAGERS ARE OF THIS TYPE.
CONCEPTUAL SKILLS ARE IMPORTANT
 TYPES OF MANAGERIAL
PROBLEMS

• CRISIS PROBLEM
AN UNEXPECTED PROBLEM THAT CAN
LEAD TO DISASTER IF NOT RESOLVED
QUICKLY AND APPROPRIATELY.

EXXON VALDEZ - CHERNOBYL

HUGO
 PROBLEM ENVIRONMENTS

• CERTAIN ENVIRONMENTS
THEY OFFER COMPLETE INFORMATION ON
POSSIBLE ACTION ALTERNATIVES AND
THEIR CONSEQUENCES.

• RISK ENVIRONMENTS
THEY LACK COMPLETE INFORMATION, BUT
OFFER “PROBABILITIES” OF THE LIKELY
OUTCOMES FOR POSSIBLE ACTION
ALTERNATIVES.
 PROBLEM ENVIRONMENTS

• UNCERTAIN
ENVIRONMENTS
THEY ARE SO POOR IN INFORMATION
THAT IT IS DIFFICULT EVEN TO ASSIGN
PROBABILITIES TO THE LIKELY
OUTCOMES OF ALTERNATIVES.

GROUPS AND CREATIVE PROBLEM

SOLVING TECHNIQUES ARE
FREQUENTLY USED IN THESE
SITUATIONS.
 HOW MANAGERS DEAL WITH
PROBLEMS

INACTIVE
• PROBLEM AVOIDERS -
THOSE WHO IGNORE INFORMATION THAT
WOULD OTHERWISE SIGNAL THE PRESENCE
OF A PROBLEM.
REACTIVE
• PROBLEM SOLVERS -
THOSE WHO TRY TO SOLVE PROBLEMS WHEN
THEY ARISE.
PROACTIVE
• PROBLEM SEEKERS -
THOSE WHO ACTIVELY LOOK FOR PROBLEMS
TO SOLVE, OR OPPORTUNITIES TO EXPLORE
AS A MATTER OF ROUTINE.
HOW MANAGERS DEAL WITH
PROBLEMS

• SYSTEMATIC THINKERS
APPROACHES PROBLEMS IN A RATIONAL STEP-BY-STEP, AND
ANALYTICAL FASHION.

* PLANNING BEFORE ACTION

* ORDERED SEARCH FOR INFORMATION
* CONSCIOUS OF THEIR APPROACH
* BREAK DOWN COMPLEX PROBLEMS INTO
SMALLER COMPONENTS AND THEN ADDRESS
THEM IN A LOGICAL AND INTEGRATED FASHION.
HOW MANAGERS DEAL WITH
PROBLEMS

• INTUITIVE THINKERS
APPROACH PROBLEMS IN A FLEXIBLE, SPONTANEOUS, AND
QUITE OFTEN, A CREATIVE WAY.

* THEY PROVIDE IMAGINATIVE RESPONSES TO

PROBLEMS BASED ON A QUICK AND BROAD
EVALUATION
* THEY RELY ON UNVERBALIZED CUES AND
HUNCHES, ... DEFEND SOLUTIONS IN TERMS OF “FIT”.
* MOST EFFECTIVE IN HIGH UNCERTAIN
ENVIRONMENTS.
HOW MANAGERS DEAL WITH
PROBLEMS

• MULTIDIMENSIONAL THINKERS
THOSE WITH THE CAPACITY TO VIEW MANY
PROBLEMS AT ONCE, IN RELATIONSHIP TO ONE
ANOTHER, AND ACROSS LONG AND SHORT TIME
HORIZONS.
• STRATEGIC OPPORTUNISM
THE ABILITY TO REMAIN FOCUSED ON LONG-TERM
OBJECTIVES BY BEING FLEXIBLE IN DEALING WITH
SHORT-TERM PROBLEMS AND OPPORTUNITIES AS
THEY OCCUR.
 THE PROBLEM SOLVING
PROCESS
• FIND AND DEFINE THE
PROBLEM
• GENERATE AND EVALUATE
ALTERNATIVE SOLUTIONS
• SELECT PREFERRED
SOLUTION AND CONDUCT
ETHICS DOUBLE-CHECK
• IMPLEMENT THE SOLUTION
• EVALUATE THE RESULTS
 FINDING AND DEFINING THE PROBLEM

• FIND THE PROBLEM

IDENTIFY THE GAPS BETWEEN ACTUAL AND
DESIRED STATES OF AFFAIRE, AND DETERMINE
THEIR CAUSES. GATHER INFORMATION.
* DON’T DEFINE THE PROBLEM TOO BROADLY OR
TOO NARROWLY.
* DON’T FOCUS ON SYMPTOMS INSTEAD OF
CAUSES.
* DON’T CHOOSE THE WRONG PROBLEM TO
DEAL WITH.
 GENERATE AND EVALUATE
POSSIBLE SOLUTIONS
• CRITERIA FOR EVALUATING ALTERNATIVES

• BENEFITS - WHAT IS GAINED OR RESOLVED?

• COSTS - HOW MUCH AND HOW RISKY?
• TIMELINESS - HOW FAST WILL THINGS OCCUR?
• ACCEPTABILITY -ACCEPTANCE AND SUPPORT BY
THOSE WHO MUST LIVE WITH THE DECISION.
• ETHICAL SOUNDNESS - DOES IT MEET WITH THE
ACCEPTABLE ETHICAL CRITERIA OF THE VARIOUS
STAKEHOLDERS?
 CHOOSE A SOLUTION AND CONDUCT
THE ETHICAL DOUBLE-CHECK

• MANAGEMENT THEORY RECOGNIZES DIFFERENCES

BETWEEN TWO MAJOR MODELS OF DECISION
MAKING:

DESCRIBES HOW
• CLASSICAL DECISION MODEL -
MANAGERS SHOULD IDEALLY MAKE DECISIONS
USING COMPLETE INFORMATION. (OPTIMIZING)
DESCRIBES HOW
• ADMINISTRATIVE DECISION MODEL -
MANAGERS ACT IN SITUATIONS OF LIMITED
INFORMATION AND BOUNDED RATIONALITY.
(SATISFICING)
 CHOOSE A SOLUTION AND CONDUCT
THE ETHICAL DOUBLE-CHECK

• JUDGMENTAL HEURISTICS
HEURISTICS ARE STRATEGIES FOR SIMPLIFYING DECISION
MAKING. THERE ARE THREE SPECIFIC AND COMMON
APPROACHES, IDENTIFIED AS JUDGMENTAL, THAT HAVE
POTENTIAL BIASES:

• AVAILABILITY HEURISTIC
• REPRESENTATIVE HEURISTIC
• ANCHORING AND ADJUSTMENT HEURISTIC
 CHOOSE A SOLUTION AND CONDUCT
THE ETHICAL DOUBLE-CHECK

• ESCALATING COMMITMENTS
ANOTHER POTENTIAL DECISION-MAKING ERROR…..IT
IS THE TENDENCY TO CONTINUE TO PURSUE A
COURSE OF ACTION, EVEN THOUGH IT IS NOT
WORKING.

DON’T FORGET THE ETHICS DOUBLE-

CHECK
 IMPLEMENT THE SOLUTION

• TAKE ACTION TO ENSURE THAT THE

SOLUTION DECIDED UPON BECOMES A
REALITY.
AVOID THE LACK-OF-PARTICIPATION
ERROR - THE FAILURE TO ADEQUATELY
INVOLVE THOSE PERSONS WHOSE SUPPORT IS NECESSARY TO ENSURE A
DECISION’S COMPLETE IMPLEMENTATION.
 EVALUATE RESULTS
• COMPARE THE ACTUAL AND DESIRED
RESULTS TO INSURE THAT THE
PROBLEM HAS REALLY BEEN SOLVED.
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 WHO IS THE DATA SCIENTIST?

DATA SCIENTIST (N.): PERSON WHO IS

BETTER AT STATISTICS THAN ANY
SOFTWARE ENGINEER AND BETTER AT
SOFTWARE ENGINEERING THAN ANY
STATISTICIAN.
- JOSH WILLS
 HOW DO I GET A DATA SCIENCE JOB?
“First you have to learn: linear algebra, convex optimization, differential
equations, calculus, algorithms, distributed computing, databases (SQL &
NoSQL), machine learning, probabilistic modeling, deep learning, natural
language processing, data visualization, and don't forget Scala for
functional programming, and Hadoop, and big data, and experimental
design, and functional analysis, and......”