Chapter # 4 Effective Information & Decision Making

Effective Information

Data refers to unprocessed facts, statistics, or figures collected from various sources. It can be numbers,
text, images, or any other form of input. On the other hand, information is the organized, processed, and
meaningful interpretation derived from data. Transforming the raw data into organized, relevant, and
insightful form makes it information. This process typically includes data collection, extraction, cleaning,
analysis, and presentation as information.
Characteristics of Effective Information

1. Subjectivity: Characteristics of information refer to the qualities that define its usefulness. Subjectivity
is one such trait, which denotes the extent to which the information has been influenced by personal
opinion or bias. It is important for users of data and other forms of information to be aware of this aspect
so as to ensure their decisions are based on accurate facts rather than interpretations. It is best to use
sources of information with minimal subjectivity.

2. Relevance
The relevance of information is another important characteristic. It implies that the collected data should
be useful and applicable to the purpose for which it is being used. For instance, a student searching for
information about a particular topic should have access to data that is related and helpful in furthering
their understanding and research. Relevance also pertains to the timeliness of the content, meaning how
current or updated the information is at any given time. It is important for this to be up to date so that users
can trust the accuracy of their sources.

3. Timeliness
Timeliness is an important characteristic of information because it provides evidence about when the data
was collected or updated last. This helps users to gauge its accuracy and whether it is applicable to their
current needs. Additionally, timely information can be used to make decisions that are informed and in line
with the current situation.

4. Accuracy
The accuracy of information is one of its most important characteristics. This implies that the content
should provide correct and reliable data which has been verified by reliable sources. Accuracy also refers
to how precise or detailed the information is, as users must have access to enough details for them to carry
out their tasks accurately and effectively.

5. Correct Information Format

Correct information format means ensuring that the data provided is structured in a way that makes it easy
for users to access, understand, and utilize it. This involves presenting the data in an organized manner so
that it can be read and interpreted quickly without any confusion or ambiguity. Additionally, providing
clear labels for the different data points allows users to quickly identify and make sense of the information.

6. Completeness
The completeness of the information is another one of its important characteristics. It implies that all
necessary details are available so that users can make well-informed decisions. This means providing
enough background information on a particular topic, as well as any other relevant pieces of data which
may be required.
7. Accessibility
One more characteristic of information is
accessibility, which refers to how easy it is to get
access to the content. This includes making sure
it is available online or in physical form and that
there are no restrictions that impede users’
ability to use it. Additionally, if there are
language barriers or copyright issues, they need
to be addressed so that users can access the
information with ease.

8. Adequacy
Adequacy is also an important characteristic of
information, which implies that it should
provide enough details for users to achieve their desired goals or outcomes.

Decision Making

Decision Making: Decision-making is one of the core functions of management. Decision-making is the
process of selecting the best course of action from a set of alternative options to achieve a desired goal
or objective. Managers often have to consider large amounts of data, synthesize from them only relevant
information and make decisions that will best benefit the organization. There are various types of decisions
the managers have to take in the day to day functioning of the firm.
Types of Decisions
Structured decisions follow a set of rules. This means that: decisions can be taken objectively there is a
clearly defined method of solving the problem generally, there is a right answer. There are a number of
operational research techniques to help reach structured decisions.
Unstructured decisions are normally subjective and do not follow any definite set of rules. (Efforts are
made to turn unstructured decisions into structured ones by setting hard-and-fast criteria.).
Semi-structured decisions lie between structured and unstructured decisions. Some parts of the decision
making process are programmable (structured), others not.
Programmed decisions are related to routine and repetitive problems. Information about these
problems is readily available and can be processed using pre-established methods. These decisions have
a short-term impact and are relatively simple, typically made at lower management levels.

Non-programmed decisions tackle unique or unusual problems that demand a high level of executive
judgment and consideration. There are no ready-made solutions for such problems, as they require
creative and thoughtful approaches. Examples of non-programmed decisions include introducing a new
product or determining the location of a plant. These decisions are usually made by higher-level
managers.
Strategic decisions involve long-term commitments and significant investments, influencing the entire
organization’s future. These decisions require careful deliberation and judgment and are usually made
at higher levels of management. Examples of strategic decisions include launching a new product,
selecting the location for a new plant, or implementing major organizational
Tactical Decisions focus on how things will be done to achieve strategic goals. They are short-term and
usually involve specific actions that help meet the broader objectives set by higher management. For
example, a company deciding on a marketing campaign to boost sales in the next quarter is making a
tactical decision. These decisions are usually made by middle managers and are meant to ensure that
day-to-day operations align with the overall strategy.

Operational Decisions deal with the routine activities necessary for running an organization. They are
very short-term, often made on a daily or weekly basis, and involve specific processes and
procedures. For example, a manager deciding on the daily work schedule for employees or handling
customer complaints is making operational decisions. These decisions are typically made by lower-level
managers or supervisors who ensure that everything runs smoothly and efficiently on a daily basis.

Decision-Making Process

There are generally 8 steps involved in a well-structured decision-making process:

Step 1: Identify the Problem

The initial step involves identifying the need for a

decision. Clearly define the problem or challenge to
ensure you are addressing the right issue.
 What is the problem that needs to be solved?
 What is the goal you plan to achieve by
implementing this decision?
 How will you measure success?
These questions are all common goal setting
techniques that will ultimately help you come up
with possible solutions. When the problem is
clearly defined, you then have more information to
come up with the best decision to solve the
problem.

Step 2: Gather Relevant Information

Collect data and information from both internal and external sources. This could include financial
reports, market research, or expert opinions that will help inform your decision.
Gathering information related to the decision being made is an important step to making an informed
decision. Does your team have any historical data as it relates to this issue? Has anybody attempted
to solve this problem before?
It's also important to look for information outside of your team or company. Effective decision making
requires information from many different sources. Find external resources, whether it’s doing market
research, working with a consultant, or talking with colleagues at a different company who h ave
relevant experience. Gathering information helps your team identify different solutions to your
problem.

Step 3: Identify Alternatives

Brainstorm possible solutions or courses of action. This step requires you to look for many different
solutions for the problem at hand. Finding more than one possible alternative is important when it
comes to business decision-making, because different stakeholders may have different needs
depending on their role. For example, if a company is looking for a work managem ent tool, the design
team may have different needs than a development team. Choosing only one solution right off the bat
might not be the right course of action.

Step 4: Evaluate the Alternatives

This is when you take all of the different solutions you’ve come up with and analyze how they would
address your initial problem. Your team begins identifying the pros and cons of each option, and
eliminating alternatives from those choices. This evaluation may involve analyzing costs, potential
risks, benefits, and long-term implications.

There are a few common ways your team can analyze and weigh the evidence of options:
 Pros and cons list
 SWOT analysis

Step 5: Choose among the alternatives

After considering all alternatives, choose the option that best addresses the problem and aligns with
your goals.
The next step is to make your final decision. Consider all of the information you've collected and how
this decision may affect each stakeholder.
Sometimes the right decision is not one of the alternatives, but a blend of a few different alternatives.
Effective decision-making involves creative problem solving and thinking out of the box, so don't limit
you or your teams to clear-cut options

Step 6: Implement the Decision

Put the chosen solution into action. This step often requires careful planning to ensure successful
implementation.
Once the final decision maker gives the green light, it's time to put the solution into action. Take the
time to create an implementation plan so that your team is on the same page for next steps. Then it’s
time to put your plan into action and monitor progress to determine whether or not this decision was
a good one.

Step 7: Review the Decision

Once the decision is made and put into action, assess the outcomes. Did the decision solve the problem?
If not, modifications might be necessary. Here are a few questions to consider when reviewing your
decision:

 Did it solve the problem your team identified in step 1?

 Did this decision impact your team in a positive or negative way?
 Which stakeholders benefited from this decision? Which stakeholders were impacted
negatively?
 If this solution was not the best alternative, your team might benefit from using an iterative
form of project management. This enables your team to quickly adapt to changes, and make the
best decisions with the resources they have.