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Book Contents

Ch. 3
Analyzing Business Decision Processes

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Managerial Decisions

Managers do not make all of their decisions as part of a deliberate, coherent and continuous decision-making process (cf., Mintzberg, 1973). Instead, brevity, variety, and fragmented activities characterize the managerís typical workday. Also, despite its importance managers do much more than make decisions. They also serve roles as a figurehead, leader, entrepreneur, negotiator, and liaison to stakeholders.

For managers decision-making is a dynamic process. It is complex and at times ambiguous. Decision-makers encounter information search problems and detours, delayed feedback of results, uncertainty, ambiguity and in some cases conflict during decision-making. In many situations, managers seem to engage in an informal causal analysis in an attempt to favorably influence decision outcomes.

Figure 3.1 Categories of Organizational Decisions

The scope of organizational and managerial decision-making is very broad. Decisions are made by individuals at all levels in an organization and by a wide variety of groups in an organization. Robert Anthony (1965) classified decisions in four categories associated with organization levels (see Figure 3.1).

Analysts need to determine if a proposed DSS is intended for use in:

Strategic Planning - decision processes related to allocating resources, controlling organizational performance, establishing broad policies, evaluating investment or merger proposals.

Management Control - decision processes associated with acquisition and use of resources by operating units; buyer and supplier behavior; introduction of new products; R&D project expenditures.

Operational Control - decisions related to the effectiveness of organizational actions; monitoring product/service quality; assessing product/service needs.

Operational Performance - day-to-day decisions made in functional units by managers to implement strategic decisions, functional tactics, and operational activities.

Both managers and DSS analysts need to analyze decision support needs and distinguish among them in terms of who participates, the type of decision and other factors discussed in later sections. From an analystís perspective a "decision" is the result of a choice point in an ongoing process of evaluating alternatives to select one or some combination of alternatives that will attain a desired end. We need to do more than support the "decision".

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