Page 25 - DCAP208_Management Support Systems

Management Support Systems

Notes 6. Choose a solution: After conducting extensive research, a decision will have to be made
regarding an optimal solution. Managers operate within an environment of incomplete
information, time deadlines, and limited resources. All solutions represent opportunity
choices having limited outcome predictability.

!
Caution Managers must make decisions within a range of known alternatives having
unknown outcomes.

7. Implement the decision: This requires developing human resources to carry out the decision.
This mandates a high communication level between the manager and the human resource
team.

8. Follow up: All decisions require constant monitoring. Changes will have to be made over
time to ensure optimum results. This requires an effective organizational control and
evaluation system for future organizational decisions

Example: A word processing software manufacturer that has been very successful in the
text-based operating system market is facing a crucial decision when the industry standard operating
system is changed to a Graphical User Interface (GUI) system. The company‘s text-based word
processor is extremely successful and has a large following. The commands used in the text-based
word processor are difficult to learn, but once learned, it is a very versatile word processor.
If the word processor is converted to a graphical user interface, then a portion of the installed
user base may be lost, and its competitive advantage based on powerful non-intuitive commands
may also be compromised. However, failure to convert the word processor to a graphical user
interface will mean losing its market share since the major competitors have already released
GUI word processors.
After deciding to develop a GUI word processor, the company had to decide whether to do a
fundamental rewrite of the program, which could take at least two years, or simply update it
and make it GUI compatible. The company decides to release a GUI update to its word processing
program with a fundamental GUI rewrite scheduled for a future date.

Decision-making involves managing three major elements:
1. Decision strategy: A decision maker develops a plan affecting long-term organizational
outcomes utilizing existing organizational resources.

2. States of nature: These are elements of the environment over which the manager has little
or no control. States of nature include the weather, political environment, the economy,
technological developments, etc. They can dramatically affect the outcomes of any decision
strategy.

3. Outcome: This is the result of the interaction of the implementation of a decision strategy
with the states of nature.

Did u know? Because of the many variables within the states of nature, outcomes can be
extremely difficult to forecast.
Thus, outcomes of a decision strategy, O, the dependent variable, is a function of the interaction
of the two independent variables, D, decision strategies and, S, the states of nature. Figure 2.1
shows a decision matrix. The rows are strategic choices a manager can make while the columns
represent decision outcomes. An outcome O is a function of a decision strategy D ; and a state of
ij i
nature S.
j

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