Chapter 15 ALA Decision Making

Put the steps used for multiple-criteria decision analysis (MCDA) in the correct order.

1. Describe the context 2. Identify various options 3. Identify and select objectives and criterion. 4. Measure each criterion. 5. Calculate the values.

In order to identify the current problem, it is necessary to provide a complete description of the problem. In this step, it is important to ask why the problem occurred. If the root cause of the problem is not clearly identified, continued to ask why questions. Once the why questions have been asked and information documented, it is important to consult with members of the organization to come up with an agreed upon root cause of the problem.

1. Identify the current problem. 2. Ask why the problem happened. 3. Continue to ask why. 4. Consult with members of the organizaiton.

Herbert Simon identified a four-stage process for decision making. The second step of the process is ___. This process includes the identification and exploration of the solutions to a problem.

1. Intelligence 2. Design 3. Choice 4. Implementation

Because it can be completed without the use of statistical analysis software, the __________ Whys is a popular method that is used to assess the underlying cause of a problem or to better understand the different causes of a problem.

5

Ensuring that the information being used to make informed business decisions is accurate and of high quality is critical in today's business environment. Which of the following are common characteristics of information quality?

Accuracy Completeness Relevance Validity Timeliness Consistency

Contemporary view

Behavior of managers in the workplace. Behavioral scientists have created behavioral models that identify actual management behaviors. According to research, when observed managers tend to be less systematic, more reactive, and generally lack structural and organizations skills. This is quite different from what the classical model suggested.

Includes information on the way various psychic states including beliefs, desires, and opportunities about the operating environment are formed. Refers to how the psychic states translate into action by the organization. Explains the methods used to measure and monitor the belief and action steps of the BAO framework.

Belief formation Action formation Outcome terminology

Of the decisions/activities listed, which would be considered unstructured decisions?

Capital budgeting decisions Strategic goal development

The classical model of management describes what managers do. Classical management theorist Henry Fayol identified the five classical functions of managers which includes:

Coordinating Deciding Controlling Organizing Planning

The analytical hierarchy process (AHP) is a multi-criteria programming model that uses an analytical hierarchy process for decision making in multifaceted operational environments. Data included in an AHP model includes which of the following?

Data from enterprise systems Observational data Qualitative data

Henry Mintzberg, a Canadian researcher on management and business, classifies management roles into three categories. Which of the following are the three categories identified by Mintzberg?

Decisional roles Informational roles Interpersonal roles

Classical View

Describes what managers do. Classical management theorist Henry Fayol identified the five classical functions of managers, which include planning, organizing, coordinating, deciding, and controlling. Fails to explain what exactly managers do when they plan, make decisions, and manage otehrs.

Which of the following should be considered when evaluating alternatives?

Disadvantages Costs

Corporate-level managers/executives are responsible for making decisions that impact profitability and the short-term and long-term success of an organization. In order to get the information they need, managers rely on output provided from ____. These systems are developed by creating a procedure for uncovering precisely what performance metrics are important to assist in making management decisions and what resources are needed to develop these systems.

Executive Support Systems (ESS)

Match the type of MIS report to the correct description. Pinpoints outliers that vary from the norm. This could be when a production quota falls below forecasted levels or when performance of sales associates falls below a pre-defined threshold Track current and predicted future levels of production and whether production goals will be met. Provide information about future expectations and whether current conditions will meet, exceed, or fail to meet these expectations.

Exeption reports Production reports Forecasting reports

Select the true statements about management filters.

Filters are often predefined by the organization and are designed to eliminate the time-consuming task of searching through large volumes of data. Filters allow managers the ability to search the specific type of data that is needed for a specific decision. Management filters are provided by many project management software applications.

When investigating a solution, it is important to take into account a variety of considerations. Match the consideration to the correct description. When investigating solutions, acquaint yourself with what you know and don't know. Consider the information you already have, consider what additional information you need. When designing a solution, you should consider other possible plans or ways to overcome the problem. Creating multiple plans (Plan A, Plan B, Plan C, etc.) helps to visualize all possible solutions. Includes the analysis of the money, time, effort, and essentially anything expended when implementing a solution.

Identify what you know and don't know Consider all outcomes Allocation of resources

Match the stage of Herbert Simon's four-stage approach to decision-making to the correct description. Intelligence Design Choice Implementation

Intelligence This stage includes the discovery, identification, and cognition of the problems an organization is experiencing. Managers often ask, "What is the problem?" in this stage. Design This process includes the identification and exploration of the solutions to a problem. Managers often ask, "What are the possible solutions?" Choice In this stage identified alternatives are considered, measured, and eventually the most viable solution is selected. Managers often ask, "What is the best solution?" Implementation This stage involves choosing a solution from all identified alternatives, executing the solution, and monitoring the solution to ensure it is working.

Henry Mintzberg, a Canadian researcher on management and business, classifies management roles into three categories. Match the category to the appropriate description. Managers perform as leaders for the organization. They represent their business to stakeholders outside the organization and perform a number of figurative responsibilities. In their informational capacity, managers are the central location for information provided by the organization. Managers help to initiate new strategic objectives, handle conflicts, and distribute budgetary resources to departments and employees under their supervisory control.

Interpersonal Roles Informational Roles Decisional Roles

Select the true statements about the analytical hierarchy process (AHP) model.

Intricate situations and scenarios are analyzed by deconstructing the problem into a visible hierarchy that can be analyzed through comparison. A multi-criteria programming model that uses an analytical hierarchy process for decision making. Allows for many variables or conditions to be considered and prioritized, resulting in the selection of the best alternatives or projects.

Of the decisions/activities listed, which would be considered structured decisions?

Payroll and overtime decisions Inventory decisions

The Data Management Body of Knowledge (DMBOK) defines data ________ (DQ) as, the planning implementation, and control of activities that apply quality management techniques to data, in order to assure it is fit for consumption and meet the needs of data consumers.

Quality

Which of the following are considered financial outcomes/measures?

Revenue Expenses Return on investment (ROI) Net income Cash flow Return of equity

Which of the following performance areas are commonly observed by middle managers and operational managers?

Sales Employee performance Adherence to organization guidelines

Select the statements that are pertinent to the discussion about information quality.

The Data Management Body of Knowledge (DMBOK) defines data quality (DQ) as, the planning implementation, and control of activities that apply quality management techniques to data, in order to assure it is fit for consumption and meet the needs of data consumers. There are several factors that contribute to the quality of information including accuracy, completeness, relevance, validity, timeliness, and consistency. IBM estimates that U.S. economy loses over $3.1 trillion per year as a result of bad data.

Select the true statements about the balanced scorecard method for decision making.

The balanced scorecard framework was developed by Robert Kaplan and David Norton and is used to structure an organization's strategic plan and goals. In order to get the information they need to create a balanced scorecard, managers rely on output provided from executive support systems (ESS). Measurable outcomes on a balanced scorecard include financial, internal business processes, learning and growth, and customers.

Today's Behavioral scientists have created behavioral models that identify actual management behaviors. Based on their observations, researchers offer a set of five management attributes. Which of the following are contemporary management behaviors?

The five management attributes: Fragmented activities Managers perform work at a fast pace Currency of Information Oral communication Diversity of contacts within the organization

Select two true statements about unstructured management decisions.

Unstructured decisions involve complex tasks that require each decision to be treated as a new task. Unstructured decisions are often made by senior executives.

Data collection methodologies and techniques should be valid. Data should be in the correct format and collected using legitimate techniques. Data should be available when needed. Additionally, data should be up-to-date and reflect current market conditions. Using data from re-defined timeframes and timely use of data creates timeliness. Multiple versions of a single item of data should be the same. Data should be consistent in content and format.

Validity Timeliness Consistency

An analysis tool that is similar to cost-benefit analysis, multiple-criteria ________ analysis is an analysis tool used for decision making. It is not constrained by quantitative or monetary means of comparison.

decision

Management _____ give managers the ability to search data sets for information that is needed for a specific decision. Members of the organization predefine the filters and design them to eliminate the time-consuming task of searching through large volumes of data and helps to avoid management bias and predefined subjective interpretation.

filters

A number of researchers in psychology and economics uncovered the fact that managers, for the most part, are not very good at assessing risk and most are risk-averse. They do not like to make decisions that could be interpreted as "risky." Additionally, most managers make decisions based on intuition, perception, and feelings about the issue. As a result, risk ________ systems are often developed to mitigate the human impact on decision making.

management

Quantifiable values that validate how effectively an organization is accomplishing significant business objectives are called key _______ indicators (KPIs). For example, a KPI for an e-commerce business might measure how well they meeting customer expectations. A KPI can be established that tracks the frequency that the customers are receiving the exact products they ordered.

performance

A main component of the belief outcome action framework (BAO) is the creation of a sustainability ________. This covers the impacts of operating activities.

report

Decision making involves the examination of well-defined _______ alternatives designed to overcome a problem.

solution

The response to an identified problem, a _______ is the method to overcome a problem.

solution

Management decisions that are often executed by higher-level management and include strategic decisions such as market entry or exit and capital budgeting are called _decisions.

unstructured

Decision making that is executed by computers through algorithms and software that can process data at a face pace is referred to as high-________ decision making. Software designed for this type of decision making is created by humans and is designed to identify issues, find solutions to these issues, and implement the programs needed to overcome these issues with an emphasis on transactional speed.

velocity

Software that is created by humans and is designed to identify issues, find solutions to these issues, and implement the programs needed to overcome these issues with an emphasis on transactional speed is referred to as high- _____ decision-making software.

velocity