1. Chapter Extension 2 Information Systems and Decision Making © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke

2. CE 2-2 Study Questions How do decisions vary by level? What is the difference between structured and unstructured decisions? How do decision level and decision process relate? What is the difference between automation and augmentation? How do information systems support decision steps?

3. © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke CE 2-3 How Do Decisions Vary by Level? Decisions occur at three levels – Operational Day-to-day activities – Transaction processing systems – Managerial Allocation and utilization of resources – Management information systems – Strategic Broader-scope, organizational issues – Executive information systems

4. © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke CE 2-4 Structured Vs. Unstructured Decisions Structured decisions – Understood and accepted decisions Formula for computing reorder quantity Standard method for allocating furniture Unstructured decisions – No agreed-on decision-making method – Not standardized Predicting future direction of economy Assessing how well-suited an employee is for performing a task

5. © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke CE 2-5 How Do Decision Level and Decision Process Relate? Loosely related Operational- level decisions usually structured Strategic-level decisions usually unstructured Both are managerial-level decisions

6. © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke CE 2-6 Automated Vs. Augmentation Information Systems Automated information system – Hardware and program components do most of the work IS that computes quantity of items to order Augmentation information system – Humans do bulk of work – Systems support work done by people ISs that use e-mail to assist decisions

7. © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke CE 2-7 How Do ISs Relate to Decision Steps? Figure 6

8. © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke CE 2-8 Steps in Decision-Making Processes Intelligence gathering – Decision makers determine what is decided, criteria, and data Formulation of alternatives, choice, and implementation – Decision makers determine alternatives, analyze alternatives, and implement decisions Review – Organization reviews results of decision and responds

9. © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke CE 2-9 Active Review How do decisions vary by level? What is the difference between structured and unstructured decisions? How do decision level and decision process relate? What is the difference between automation and augmentation? How do information systems support decision steps?