Assignment

On
Role of information in decision making

Department of Computer Science

Punjabi University Patiala

Submitted To: - Submitted By:-

Dr Neeraj Sharma Lovedeep Kaur
(19071204)
MCA IST
 ROLE OF INFORMATION IN DECISION MAKING

Information system is the system that has important tools to support, analyse, delivery and
adding reliability to the organization. Also this helps to solve the many business problems.
Information plays a vital role in decision-making. Even to take very simple decisions, we
need information. In fact, decision–making means, choosing one course of actions rather than
another and finding an appropriate solution to a new problem posed by a dynamic world

Decision making is the essence of the management. In other words whatever a manager does
it is decision making and information assist every manager in providing the required
information. To understand the role played by information in decision-making, we have to
understand how decisions are taken.

OBJECTIVES OF INFORMATION

 Deliver the right information to right person at right time in right form.
 To ensure that such information are accurate and timely.
 To organize information for planning, budgeting and decision making.
 To help the organization put in effective management system and improve utilization
of resources.

EXAMPLE

When you drive your car to a certain destination and there is only one road, you do not have
to make a decision. The road will take you there. But if you come to a fork (cross-ways), you
have to decide which way to go. In fact, whenever more than one alternate action is available,
a decision must be made.

STAGES OF DECISION MAKING

 Identification and structuring of problems or opportunity

 Putting the problems or opportunity in context
 Generation of alternatives
 Choice of best alternatives
 VARIOUS STAGES OF DECISION MAKING

 Identification and structuring of problems or opportunity

One needs information to identify a problem and put it in a structured manner. This phase
involves detecting and interpreting signs that needs your attention. Without information
about a problem or opportunity, the decision-making process does not even start.

 Putting the problems or opportunity in context

Identify the preliminary information needs and then obtain information. Without
information about the context in which the problem has occurred, one cannot take any
decision on it. In a way, the information about the context defines the problem.

 Generation of alternatives

Information is a key ingredient in the generation of alternatives for decision-making. One

has to have information about possible solutions to generate alternatives.
For example, if the objective of the company is growth of business, then company has
various possible alternatives, like expansion in same product line, diversification in new
area and so on.

 Choice of best alternatives

The positive and negative points are examined thoroughly. The consequences of each
alternatives must be carefully examined before making choice. Based on the information
about the suitability of the alternatives, a choice is made to select the best alternative.
Information is thus, very important to take decisions.

This 4 phase process is not necessary to be in linear. You’ll often find tit useful or
necessary to cycle back to an earlier phase. When choosing an alternative in the choice of
best alternative phase for example, you might become aware of another possible solution.
Then you would have to go back to the putting the problems or opportunities in context,
include the new found solution, return to generation of alternatives phase and compare it
with the new solution to the others.
PHASE 1
First we get information about a problem, format it into a structure and then factor in
the information about the context in which the problem has occurred. Like in the
above case instead of the child being at the middle of the road and crossing it, the
driver would have seen the child about to cross over with a few steps only he would
probably not have braked to stop but would have slowed down, as he would have
calculated that by the time the vehicle reaches the crossing stage, the child would
already have passed. So if the problem was structured as 'how to not hit the child
crossing the road?', and if the child was at the middle of the road, the driver would
have braked but had the child been at (say) at ninety per cent completion level of
crossing the road, the driver would have only slowed down and not braked to stop.

PHASE 2
Therefore, we see that the context has a major role in the decision-making and
information is required both about the problem and about the context in which the
problem occurred.

PHASE 3
The next stage for the decision maker would be to generate alternatives. In the
driver's case such possible alternatives would be:
i) to stop by braking
ii) to slow down
iii) to take a sharp turn towards left or right to avoid the child
iv) To drive the vehicle on to the footpath and out of the road to avoid collision, etc.

PHASE 4
So the decision-maker generates these possible solutions to the problem at hand based
on information about such possible solutions. Each of the alternatives represents a
possible solution, which one can generate if one has information about them. In the
case of the driver, obviously, he needs knowledge and information to generate these
alternatives, i.e., to stop by breaking the driver would need to know that braking stops
the vehicle. If he is unaware of this crucial information he would not have been able
to generate this alternative. So information is vital for generation of alternatives.

Thus, we can see that information is the key to the decision making process,
without information and the right kind of information decision-making is not
possible. Information plays a crucial role in every stage of the decision-making
process.
 Simon’s Model of Decision-Making

According to Herbert A. Simon’s model, there are three phases in decision making process,
namely,
 Intelligence
 Design
 Choice

Intelligence Phase

In this phase, decision maker searches the environment and finds out the conditions that
demand decision making .for this, he obtain the information from various sources, analyses it
and identifies the problem or opportunities.
 In this phase ,decision maker does the following
 Collect data from inside the organisation
 Collect data from outside the organisation
 Collect information on possible ways to solve the problem
 Intelligence phase involves
 Problem searching
 Problem formulation

Problem searching

Problem is defined as the difference between something that is expected and reality.

Problem formulation

When the problem is identified, there is always a risk of solving the wrong problem .It is very
important that the problem is well understood and clearly stated.

Design phase

During this phase course of actions are invented, developed and analyzed. In this phase,
manager tries to understand the course of the problem and finds a possible solution and tests
the solution for feasibility.
In this phase, following activities are performed
 Organize the data
 Select a model to process the data
 Produce reasonable, potential course of action

Choice phase

During this phase one alternative or course of action is selected from all the possible
alternatives known and implemented .for selecting alternatives, a detailed analysis of each
and every alternative is made. However at any phase, the decision –maker may return may
return to a previous phase.
Intelligence

Phase

Choice

Decision