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Learning Objectives:
· Explain the characteristics of the business decisions.
· Explain rational decisionmaking and its problems.
· Describe Herbert Simon’s model of decisionmaking.
· Mention the types of decisions.
· State the four ways of decision analysis.
· Examine the behavioural concepts and decisionmaking.
Intelligence:
Raw data collected, processed and examined. Identify a problem
calling for a decision.
Design:
Inventing, developing and analysing the different decision
alternatives and testing the feasibility of implementation. Assess
the value of the decision outcome.
Choice:
Select one alternative as a decision, based on the selection
criteria.
In the intelligence phase, the MIS collects the data. The data is
scanned, examined, checked and edited. Further, the data is
sorted and merged with other data and computations are made,
summarised and presented. In this process, the attention of the
manager is drawn to all problem situations by highlighting the
significant differences between the actual and the expected, the
budgeted or the targeted.
In the design phase of the model, the designer is to ensure that the
system provides models for decisionmaking. These models should
provide for the generation of decision alternatives, test them and
pave way for the selection of one of them. In a choice phase, the
designer must help to select the criteria to select one alternative
amongst the many.