Information and decision making
ORGANISATIONAL DECISION MAKING ASSIGNMENT 2002 Information and decision-making Name: Beáta Szalay Enrolment number: 008056370 Course: BEBA Tutor: Ferenc Ternovszky Introduction Everyday life involves a whole series of decisions ranging from trivial ones without significant affect (e. ... In other words decision making became a vital organisational activity. This assignment aims to provide an insight into the decision-making process by explaining the importance of information and its most important characteristics. The assignment will also deal with the conditions of decision making including certainty, uncertainty and risk. ... It will also analyse the characteristics of decision makers which affect their decision, the role of rationality, resources and constraints. ... Information One definition of information suggested by Davis and Olson (1985): “Information is data that has been processed into a form that is meaningful to the recipient, and is of real perceived value in current or prospective decisions.” This definition of information systems stresses the fact that data have to be processed in some way to produce information; information is more than raw data, since data are only the foundation for all other information; it consists of non-edited, basic information. Analyzed and arranged data are called information. Effective decision making depends on effective information processing. Gathering information is needed for each decision making stage and thus it is a very -if not the most important part of the decision making process. Although we have to accept that the availability of perfect information is a very rare situation it is clear that information will play a vital part in the quality of solution achieved. The usefulness of information is determined by characteristics like relevance, reliability, timeliness and quality. The information has relevance when it serves a particular task and supplements the decision maker’s prior knowledge. Information is relevant if an individual needs it in a particular decision-making or problem-solving situation. ... A set of information that was relevant at one time may not be relevant now if it is not actually needed and will not be used by the recipient. Similarly, information collected and maintained by someone on the assumption that sooner or later it will be needed is not relevant now because it is not needed now. ... Decision makers have to be clear about what kind of information they require and why do they need it in order to gather relevant information. Large quantities of irrelevant information are potentially harmful because they may create hindrance, distortion or misplaced confidence. To be useful, information must be reliable (or accurate) as well as relevant. In organisations, numerous sources of unreliability can cause bias in the information that is presented or otherwise available to the decision maker. ... The reliability of information must be assessed; the credibility of its sources must be ascertained. This does not imply merely that the potential biases of the people who provide information must be taken into account in appraising the utility of information. ... Timeliness means that the information has to be up-to-date and it has to be available in the right time to help making the decisions. ... Besides being relevant, reliable and timely information also needs to be of good quality. Although quantity of information is also important, the ever-increasing problem of information overload is a warning for managers not to use quantity as a substitute for quality. Many people think that getting as much information about a topic as possible is the basics of good decision making.