CSR / BUSINESSES IMPORTANCE OF CSR

Organizations are motivated to contain stakeholders in their selection-making and to deal with societal demanding situations because nowadays’s stakeholders are more and more aware about the significance and impact of corporate decisions upon society and the surroundings. The stakeholders can reward or punish employer’s. Businesses can be influenced to trade their corporate behaviour in response to the enterprise case which a csr approach doubtlessly guarantees. This includes: 

1) more potent economic overall performance and profitability (e.G. Through eco-performance), 

2) progressed duty to and tests from the investment community, 

3) more suitable worker dedication,

Four) reduced vulnerability via stronger relationships with groups, and 

Five) improved recognition and branding.

Csr is set how businesses control the business processes to provide an basic effective effect on society. 

The enterprise society right here we find that groups need to reply two aspects in their operations:

1) the quality in their control - each in phrases of people and strategies (the  internal circle).

2) the nature and amount in their impact on society within the diverse areas.

Outdoor, stakeholders are taking an increasing hobby inside the interest of the organisation. Most look to the outer circle what the employer has truly completed, accurate or bad, in terms of its services and products, in terms of its effect on the environment and on neighborhood communities, or in how it treats and develops its group of workers. It's miles believed that this version may be more sustainable because right here social duty becomes an fundamental a part of the wealth creation procedure, which if managed nicely have to beautify the competitiveness of business and maximize the price of wealth advent to society when times get difficult, there is an incentive to practice csr extra.

Since the early 1980s, a good sized frame of csr studies has focused across the  debate over whether or not there is a relationship between true corporate social overall performance ( csp) and strong monetary overall performance and what sort of relationships exist. Nowadays agencies have become more and more inquisitive about the concept of the ‘triple backside line (tbl)' this concept focuses not just at the economic cost of the groups that they will gain from appearing in certain way, but additionally at the cost that they may accrue to the company’s bottomline by way of carrying out environmentally and socially useful practices. The three :line’ represent the economy, the surroundings and the society and are all dependent on each other. Whether agencies do in reality take each line into account is hard to measure as the arguments surrounding Economic advantages of the organization from being socially responsive are not clear out. Even though effective relationships were located, there are numerous problems inherent in measuring those linkages. One problem is that it is not clean whether or not social obligation results in increased monetary performance or whether higher income lead to more funds being available to devote to csr activities. The opposite problem is that earnings is an incomplete degree of social overall performance (lantos 2001). But some other is the , difficulty of developing a consistent set of measures that outline csr or csr.

The following factors are taken into account for expertise the significance of csr:

• Globalization and the associated boom in opposition
•  Improved size and impact of companies 
• Struggle for skills, organizations competing for information 
• Accelerated importance of intangible belongings

Advanced monetary overall performance:

Whilst it stays hard to determine an instantaneous causal ielationship between expanded duty and economic overall performance a ramification of studies advise that one of these hyperlink exists. For example, consistent with 2002 international investor opinion survey released with the aid of mckinsey & agency, a majority of buyers are organized to pay a premium for organizations exhibiting excessive governance standards. Charges averaged 12-14 percent in north the usa and western europe; 20-25 percentage in asia and latin america; and over 30 percentage in jap europe and africa. The observe additionally located that extra than 60 percentage of buyers nation that governance concerns may make them avoid individual companies with negative governance.

Heightened public credibility: 

groups that show a willingness to provide information this is credible, verifiable and accessible can garner accelerated trust among stakeholders. Forthright and candid reporting approximately corporation achievements as well as overall performance shortfalls enables businesses create a public recognition for honesty. At the equal time, groups that make a public dedication to growth duty and transparency need to make certain that they've sturdy structures for implementation, lest the organisation danger bad public backlash for failing to live as much as its commitments.

Reduced charges: 

the enhanced communique this is regularly a part of company responsibility efforts can assist construct accept as true with between organizations and stakeholders, which can reduce steeply-priced warfare and enhance decision-making. Corporations that proactively and correctly engage shareholders and deal with their worries can lessen the expenses related to shareholder proposals. Further, social and environmental reporting efforts can help perceive the effectiveness of various programmes and regulations, often improving working efficiencies and decreasing prices. Reporting facts also can ,assist become aware of priorities to ensure that employer is accomplishing the finest possible impact with available resources.

Expanded elegance to traders:

investors -whether or not shareholders invested in socially responsible finances that display screen corporations for social and environmental attributes; or big institutions --"welcome the extended disclosure that includes 

Company responsibility. A growing range of buyers are such as non-economic metrics of their evaluation of the satisfactory in their investments. New metrics cowl labour and environmental practices; board range, independence, and different corporate governance problems; and a wide type of other social and environmental standards. Studies shows investors can be willing to pay better fees for the stock of companies taken into consideration to be responsible. For instance, a 2000 survey of two hundred massive institutional buyers performed by using mckinsey & co, the arena financial institution, and  institutional investor’s regional institutes determined that 3-quarters of stackholders consider board practices as vital as economic overall performance whilst comparing businesses for funding. The look at additionally found that more than 80 percent of investors would be willing to pay extra for the stocks of a nicely-governed corporation than for a  poorly ruled enterprise with similar economic performance.

Advanced relationships with stakeholders: 

Organizations that take some time to be , obvious and responsible for their actions and choices are better able to construct agree with among their stakeholders. This engagement enables corporations understand how network agencies and other stakeholders understand them, and educates them approximately future troubles and concerns that can have an effect on their operations. The information won can help organizations better define priorities and make sure commercial enterprise sports align with professed business principles or moral codes. Many authorities agencies and  stakeholders appearance favourably at companies that self-become aware of and publicly disclose duty demanding situations and display that they may be running to clear up them. Best practice solutions include the improvement of control systems that lessen the probability of recurrence.

Early identification of capacity liabilities: the strategic statistics that may come from efforts to increase a more responsible enterprise --which includes social and environmental auditing and reporting and stakeholder communicate --can discover practices or situations that could pose liabilities to a enterprise. Early identification can provide corporations with the opportunity to remedy problems earlier than they result in high-priced felony moves or terrible public exposure. Troubles that would floor more fast in an accountable employer include environmental troubles that might endanger public health, workplace discrimination or harassment that might result in lawsuits, marketing practices that don't fee services or products equitably, or hiring practices that inadvertently supply unfair advantage to sure populations. Social and environmental auditing and reporting also can pick out wherein business enterprise practices can be in violation of presidency regulations or the requirements or expectations of key stakeholder groups.

Market advantages: 

Accountability could make entry and achievement in new markets simpler with the aid of helping establish direct relationships with key customers and business companions. Those relationships can make contributions to innovation in product deveiopment or transport, help mitigate potential negative media insurance, and decorate marketplace presence. Some companies have used speak with stakeholders to help make selections on distant places investments and operations, or to overcome the challenges of operating in markets. With extraordinary cultures, laws, and languages. 

             For instance, unilever’s indian subsidiary , hindustan lever, has labored with neighborhood stakeholders to develop a new transport device for washing detergent in indian villages. The business enterprise turned into experiencing problem in selling its product until it changed into suggested through stakeholders that the organization package its product in unmarried use  portions that could be low priced to local residents with confined disposable earning.

Advanced ordinary management: 

Many companies which have evolved clean csr overall performance and accountability systems internal their corporations document experiencing an development in their management practices universal. Increasingly more, companies are locating that the effect of structures designed to growth duty for csr performance is not restricted to the csr realm, but also can impact performance in different regions because the tradition of the organisation undergoes exchange. An analysis of fortune 500 companies performed on the boston university carroll college of control determined that agencies judged as treating their stakeholders properly are rated by peers as also having superior management.

Improved organizational effectiveness: 

the process of self-assessment and evaluation, that's part of increasing accountability may have useful impact on agency operations. For instance, social and environmental auditing and reporting deliver groups the possibility to assemble and investigate more complete records on operations and affects. This statistics can assist coordinate and maximize efficiencies and collaborations across departments, facilities, and-business units. Via this technique, companies collect examples of successful programmes from various elements in their companies and share the learnings at some stage in the organisation, leading to extra effective and green policies and practices. Talk and a Partnerships with stakeholder organizations can help corporations construct capabilities and , competencies, or align organization operations with overarching assignment and values.

Decreased chance of damaging exposure: responsible companies may be better prepared to cope with the concerns of clients or other stakeholders who might in any other case take bad movement on social problems. As an example, by using accomplishing a dialogue with stakeholders about their hobbies and concerns and addressing those worries in busines implementation tactics, businesses can be able to head off or minimize the impacts of boycotts prepared by way of purchaser groups. Similarly, corporations that proactively address the issues of shareholders can lessen the chance of adverse publicity stemming from highprofile shareholder disputes.

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CSR -- Corporate Social Responsibility

INTRODUCTION

Corporate Social Responsibility (CSR) is an evolving concept which is yet to command a standard definition or a fully recognized set of criterion. With the given understanding that businesses have a key role of job and wealth creation in society, CSR is generally understood to be the way an organization achieves a balance between economic, environmental, and social imperatives while they address the expectations of the shareholders and the stakeholders. While businesses try to comply with laws and regulations on social, environmental and economic objectives set by the legislations and legal institutions, CSR is often understood as involving the private sector commitments and activities that extend beyond the of compliance with laws. In fact, a key feature of the concept is the way businesses engage or involve the shareholders, employees, customers, suppliers, governments, non-governmental organizations, international organizations, and others in the organization.

         

         CSR is generally seen as the business contribution to sustainable development which has been defined as “development that meets the present needs without compromising the ability of future generations to meet their own needs”, and is generally understood as focusing on how to achieve the integration of economic, environmental, and social imperatives. CSR also overlaps and often is synonymous with many features of other related concepts such as corporate sustainability, corporate accountability, corporate , responsibility, corporate citizenship, corporate stewardship, etc.

         

           Today it is generally accepted that business firms have social responsibilities that extend well beyond what in the past was commonly referred to simply as the ‘business economic function’. In earlier times managers in most cases had only to concern themselves with the economic results of their decisions. Today, managers must also consider and weigh the legal ethical, moral and social impact and repercussions of each of their decisions.

CSR AND HISTORICAL DEVELOPMENTS

Corporate Social responsibility has its roots in the thinking of the twentieth century where the theologians and the religious thinkers suggested the application of religious principles to business activities. First was the principle of philanthropy in which the wealthy and generous individuals contributed to the resources for aiding the unfortunate. The next was the stewardship principle, a biblical doctrine, which requires business and Wealthy individuals to see themselves as stewards or caretakers not just of shareholders but also of society’s resources for the benefit of the society as a whole. Similarly different authors see corporate social responsibility from different angles.

            

             Although the topic rose to prominence in 1975 ( Caroll, 1979; Wratick and Cochran, ' 1985), the first publication specifically in the field dates back to 1953, with Bowen’s ‘social reSponsibilities of the businessman. In this work, Bowen argues that industry has an obligation to pursue those policies and to make those decisions, or to follow  those lines of actions Which are desirable in terms of the objectives and values of society’ (Bowen, 1953), which means; 

• That businesses exist at the pleasure of society and that their behaviour and methods of operation must fall within the guidelines set by society. 
• Businesses act as moral agents within society.

Wood (1991) expanded these ideas encapsulating them into three driving principles of social responsibility, which are: 

•  Business is a social institution and thus obliged to use its power responsibly;
• Businesses are responsible for the outcomes relating to their areas of involvement with society; and
• Individual managers are moral agents who are obliged to exercise discretion in their decision-making.

A growing number of scholars take the View that firms can no longer be seen purely as private institutions but as social institutions instead. The benefits flowing from firms need to be shared collectively. This thesis is similar to the stakeholders model and claims that a firm is not responsible only to its shareholders but to all stakeholders whose contribution is necessary for a firm’s success.

         

           However, Friedman differed from these and felt that the corporation is an economic institution and thus should specialize in the economic sphere alone and the socially responsible behaviour will be rectified by the market through profits.

 

             Opinions differ in terms of the basis or scepe of CSR and even the very definition of the term. As a consequence different aspects of a firm’s operations can be seen to fulfillment of social contractual obligations, achievement of a social equilibrium, etc. . depending on the stance taken. World Business Council for Sustainable Development in its publication “Making Good Business Sense” by Lord Holme and Richard Watts defines CSR as, “Corporate Social Responsibility Is the continuing commitment by business to behave ethically and contribute to economic development while Improving the quality of life of the workforce and their families as well as of the local community and society at large".

History

The view that a business can have obligations that extend beyond economic role Is not new in many respects. Throughout recorded history the roles of organizations producing goods and serices for the marketplace were frequently linked with and include political, social and/or military roles For example, throughout the early evolutionary stages of company development In England (where organizations such as the Hudson Bay Company and the East India Company received broad mandates), there was a public policy understanding that corporations were to help achieve , societal objectives such as the exploration of colonial territory, setting up settlements, providing transportation services developing bank and financial services etc.

      During the nineteenth century, the corporation as a business form of organiorganiz evoled rapidly in the US. It took on a commercial form that spelled out  responsibilities of the board of directors and management to shareholders.(.i.e.g fiduciary duty). In this later evolutionary form, public policy frequently addressed Specific social domains such as health and safety for workers, consumer protection,labour practices, environmental protection, etc. Thus, corporations responded to social responsibilities because they were obligated to be In compliance with the law and public policy. They also responded voluntarily to market demands that reflected consumer morals and social tastes. By the midpoint of the twentieth century, corporate social responsibility was being discussed in the US-by business , management experts such as Peter Drucker and in business literatures CSR emerged and continues to be a key business management, marketing, and accounting concern in the US, Europe, Canada, and other nations. 

            

           Traditionally in the United States, CSR has been defined much more in terms of a philanthropic model. Companies there made profits unhindered except by fulfilling their duty to pay taxes. Then they donated ,a certain share of the profits to charitable causes. It is seen as tainting the act for the company to receive any benefit from the giving. The first generation of CSR this way showed how companies can be responsible in ways that do not detract from and may contribute to commercial success. Corporate philanthropy is the practice of companies of all sizes and sectors making charitable-contributions to address a variety of social, economic and other issues as part of an overall corporate citizenship strategy.

      

           The second generation of CSR is now developing where companies and whole industries see CSR as an integral part of the long term business strategy. Now a days lot of companies are taking it seriously for good of business. From a progressive business perspective, CSR usually involves focusing on new opportunities as a way to respond to inter-related economic, societal and environmental demands in the marketplace. Many firms believe that this focus provides a clear competitive advantage and stimulates corporate innovation in.

          the last decade. CSR and related concepts such as corporate citizenship and corporate sustainability have expanded. This has perhaps occurred in response to new challenges such as those emanating from increased globalization on the agenda of business manager as well as for related stakeholder communities. It Is now more a part of both the vocabulary and agenda of academics, professionals, non-governmental organizations, consumer groups, employees, suppliers, shareholders, and investors.

       A third generation of CSR is needed in order to make a significant contribution to addressing poverty and environmental degradation. This Will go beyond voluntary approaches by individual, companies and will involve leadership companies and organizations influencing the market in which they operate and how it is regulated to re-mould whole markets towards sustainability.

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MIS AND DATA PROCESSING

MIS AND DATA PROCESSING

MIS can be differentiated from data processing from the users point of view. Historically the data processing was the first subsystem to be used in business organisations. It is recently that the data processing is being treated as a lower level activity as compared to MIS. Data processing is basically aimed at processing of transactions generated from day-to-day operations within an organisation; whereas MIS aims at supplying information from the processed data to various cadres of management to support their decision making process. The use of computers for processing of data actually started/with data processing. MIS has evolved only recently within the organisations. Data processing could be further divided into four different streams as given below:

a) Office Automation Systems (OAS)

The Office Automation Systems are these activities and processes which are undertaken on the computer to perform the office routines such as routine correspondence scheduling  appointments, calendar functions, bulk mail, word processing. etc. However it may be noted, that OAS does not lead to generation of data directly. These systems are designed following basic principles of Office Management.

b) Transaction Processing Systems (TPS)

The transactions which get generated on a day-to-day basis in an organisation are 

collected. stored and used for updating master data files so as to change the current status of organisational entities within an organisation. The Transaction Processing Systems are primarily aimed at updating the history files. generation of detailed transaction reports and preparing summarised processed transaction data. Examples of Transaction Processing Systems are sales accounting systems, financial accounting systems personnel accounting systems, etc. All these systems are designed following the basic principles of accounting.

c) Management Information Systems (MIS)

These systems are designed for providing/information to the key functionaries in an organisation. These systems make use of the already processed transaction data which is outputted from TPS and generate information reports after processing data. The examples of this kind of systems could be personnel information systems, marketing information systems, sales information systems, production and operations systems, etc. These systems are designed following the principles of organisational theory. The major group of users for this kind of systems are the middle levels of management.

(d) Decision Support Systems (DSS)

DSS are the highest order of systems among the computer based information systems. These systems make use of the summarised organisational data as well as external data collected from the environment of the organisation. The internal data is mostly used for studying the trends whereas external data is mostly used for understanding the environment. These systems also make use of analytical and planning models such as management science and operations research models. These systems are mostly used for assisting the top management in taking unstructured and semi-structured decisions having long-term impact on the organisational performance.

OPERATING ELEMENTS OF INFORMATION SYSTEMS

Any information system will make use of the following physical components:

a) Hardware: The equipment and devices for inputting, outputting, secondary storage, processing as well as communications in the system.

b) Software: The set of programmes to facilitate processing procedures; it includes systems software, applications software and the model base.

c) Data Base: The organisational data to be used by various software programmes is usually stored in the form of files and database on the physical storage media such as computer tapes, disc drives, floppy diskettes.

d) Procedures: The operating procedures documented in the form of physical manuals constitute an important part of MIS components. These documents could be divided into three major types: Operating Manuals, User Manuals, and Systems Manuals.

e) Operating Personnel: The manpower operating these information svstems include systems managers, systems analysts, data administrators, programmers, data entry ( and computer operators.

Processing Functions

The major processing functions in information systems include the following:

a) Processing of business transactions: To capture, collect,.record,‘store and process the events of business interest, so that their effect should be carried over to the organisational performance records.

b) Updation of master files: The effect of these transactions is carried over to the , status files of the organisational performance. Master files at any given time shall reflect the status of any entity after having incorporated the impact of 

up-to-moment transactions.

c) Generation of information reports: After having processed the transactions and updation of master files, the information reports are generated so as to assist the managers in their decision making.

(d) Processing of interactive enquiries: On-line information processing systems provide the facility of responding to the business queries raised by the managers on the data files-both master as well as transaction files.

e) Providing interactive analytical support: The key decision makers not only need to interact with the data files for extracting data, with the help of scientific and planning models, they also require on-line processing support to analyse, the impact of some possible actions. When the system is able to extract data from 

relevant files and address this to the models chasm by the user, this leads to a , Decision Support System.

MIS AND TOP MANAGEMENT

In order to relate the information systems to the corporate strategy in an organisation, it becomes important that the top management should take keen 

interest in the development and implementation of information systems. More often than not, it has been found that the top management does not take keen interest in the development of structured, formalized and public information systems.The key managers normally tend to depend upon their informally designed private information systems, It is necessary that, for successful implementation of information systems in an organisation, a corporate plan should be prepared covering a period of 5 to 10 years for the organisation. The components of corporate plan should include a mechanism for implementation, proposed organisational structure and changes over a period of time, applications to be computerised issues relating to operations management, procurement of equipments and training of staff and effective control of information system function. It could be noted that the companies belonging to the strategic cell need to look after their processing activity more carefully Where as in turnaround cell the companies might be able to convert their processing function as a major competitive weapon. In the factory setting, there is not much to plan, yet the existing applications should be continued. In support cell, processing is not at all critical to the success of the organisation. The top management involvement varies from critical in strategic cell to just negligible in support cell.

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Privacy Policy

Privacy Policy

This privacy policy has been compiled to better serve those who are concerned with how their
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When ordering or registering on our site, as appropriate, you may be asked to enter your email
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Google

Google's advertising requirements can be summed up by Google's Advertising Principles. They 
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We use Google AdSense Advertising on our website.

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California Online Privacy Protection Act

CalOPPA is the first state law in the nation to require commercial websites and online services to 
post a privacy  policy. The law's reach stretches well beyond California to require any  person or 
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on its  website stating exactly the information being collected and those individuals or companies
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According to CalOPPA, we agree to the following:

Users can visit our site anonymously. Once this privacy policy is created, we will add a link to it
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You will be notified of any Privacy Policy changes:

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We honor Do Not Track signals and Do Not Track, plant cookies, or use advertising when a Do Not
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It's also important to note that we allow third-party behavioral tracking

COPPA (Children Online Privacy Protection Act)

When it comes to the collection of personal information from children  under the age of 13 years 
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Fair Information Practices

The Fair Information Practices Principles form the backbone of privacy law in the United States and the
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We will notify the users via in-site notification

      • Within 7 business days

We also agree to the Individual Redress Principle which requires that individual have the right to
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CAN SPAM Act

The CAN-SPAM Act is a law that sets the rules for commercial email, establishes requirements for 
commercial messages, gives recipients  the right to have emails stopped from being sent to them,
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      • Not use false or misleading subjects or email addresses.

      • Identify the message as an advertisement in some reasonable way.

      • Monitor third-party email marketing services for compliance, if one is used.

      • Honor opt-out/unsubscribe requests quickly.

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Contacting Us

If there are any questions regarding this privacy policy, you may contact us using the information below.

gyannworld.blogspot.in

Korba

Korba, Chhattisgarh 495684

India

crackcgpsc@gmail.com

Last Edited on 2017-02-26

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Decision making-IV( RATIONAL INDIVIDUAL MODELS OF DECISION MAKING )

RATIONAL INDIVIDUAL MODELS OF DECISION MAKING

Because organisations are made up of individuals, it makes sense to build information systems that facilitate individual decision making, wherever possible. Different assumptions have been made while proposing some model or the other.

1. Rational Model

Some economists, mathematicians and management experts believe that the decisions are always made rationally because the decision maker:

* knows his or her objectives and ranks them in order of importance;

*knows all possible alternative solutions to the decision problem;

*I knows the relative pros and cons of each alternative; and

*chooses the alternative that maximises attainment of the objective.

Such idealistic assumptions have their share of criticism. Decision makers are not so well informed as to consider all the alternatives or to know all consequences.  Moreover, it is not just a singular objective that is pursued in real life situations. Still, 

despite these criticisms, the rational model remains a powerful and attractive model of human decision making.

2. Bounded Rationality and Satisficing

Instead of searching for all of the alternatives and consequences (unlimited rationality) as in the preceding model, people limit the search process to sequentially ordered alternatives (alternatives that are not radically different from the current policy. Wherever possible they avoid new, uncertain alternatives and rely instead on tried-and-true rules, standard operating procedures) and programmes. Individuals and/or organisations have multiple goals, some in conflict with each other also. Even goals are prioritised or placed in a hierarchy. In this way rationality is bounded. Simon proposes the ‘satisficing’ approach rather than the ‘optimising approach’.

3. Muddling through Model

In 1959, Lindblom proposed the most radical departure from the rational model in his article on the “science of muddling through”. He described this method of decision making, as one of “successive limited comparisons”. Here values are chosen at the same time as policies, and no easy means-end analysis is possible. For instance labour and management can rarely agree on values, but they can agree on specific policies. Because of the limits on human rationality, Lindblom proposes, ‘incremental decision making’, or choosing policies most like the previous policy. Non-incremental policies are a political (not likely to bring agreement among important groups) and dangerous as nobody knows what they will lead to. Lastly, it is argued that choices are not “made”. Instead decision making involves a continuous process in which final. decisions are always being modified to accommodate changing objectives,  environments, value preferences and policy alternatives provided by decision makers.

4. Psychological Types and Frames of Reference

The psychologists have given an additional perception to the rationality concept. They say that humans differ in how they maximise their values as well as in using the frame of reference for interpreting information and making choices. Here we hear about the ‘cognitive style’ that refers to underlying personality dispositions in the treatment of information, the selection of alternatives and the evaluation of consequences. Systematic thinkers impose order on production and evaluation; intuitive thinkers are more open to unexpected iniormation and use multiple models and perspectives when evaluating information. Neither is more rational than the other. 

                    Some studies have found that humans have a deep seated tendency to avoid risks. when seeking gains but to accept risks in order to avoid losses. In other words, people are more sensitive to negative outcomes than to positive ones.

5. Implications of the Models for Information Systems

Decision making is not a simple process and hence some guidelines need be kept in mind when designing information systems. The following characteristics of Information systems could be encouraged :

---they are flexible and provide many options for handling data and evaluating information. .

---they are capable of supporting a variety of styles, skills and knowledge.

---they are capable of changing as humans learn and clarify their values:

---they are powerful in the sense of having multiple analytical and intuitive models for the evaluation of data and the ability to keep track of many alternatives and 

consequences.

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Decision making-III (Information requirement)

INFORMATION REQUIREMENTS FOR DIFFERENT DECISION MAKING STAGES

Let us now look into the information requirements for the various stages described In the earlier section.

1.Information for Intelligence Phase

Information Systems can help in the intelligence stage by providing information about external and internal conditions. Intelligence entails scanning the environment, either intermittantly or continuously, depending on the Situation to identify potential decision situations. For example:

a) a marketing executive makes periodic visits to key customers to review possible problems and identify new customer needs;

b) Sales analysis reports can be furnished to managers periodically, When exceptional sales situations occur, or on demand. These help managers to identify the status of sales performance. Also information from market research studies and external databases could also help managers (at higher levels) identify changes in consumer preferences or competitive activity;

c) A design engineer might attend a trade Show at the International Trade Fair to observe new materials that may or could 'be incorporated in future product designs. '

The Intelligence phase and its activities result in some type of dissatisfaction with current state or alternatively aid in the identification of potential rewards for a new state. The intelligence phase is the ‘tricky’ phase and embraces the unstructured non-programmed category of decisions that we have discussed earlier in this unit. 

                           A major information system capability is needed at this stage. It Should be possible to ' provide situation-Specific information to managers when they make adhoc Inquiries that could be unique and often unscheduled. All this Should be In addition to some of , the exception reports that might be churned out on a weekly basis.

Also read--Unstructured decision

2.Information for the Design Phase

The design phase involves designing of several possible solutions to the problems and evaluation of the alternate courses of action. Here more carefully specified and directed information activities and capabilities focused on specific designs are required. This stage calls for quite a deal of creativity and innovation. Idea generation and idea engineering could play a useful role in this stage of decision making. Techniques like Brainstorming, Nominal Group Technique etc. , could be utilised. Here also some decisions might fall in the category of highly structured, programmed .‘situations and move towards semi-structured or unstructured non-programmed ‘ decision situations. We have already discussed the use of decision tables for structured situations. Decision trees-could also be utilised by laying out graphically the alternative courses of action that are within the control of the decision maker and the states of nature, which are beyond the control of the decision maker. 

                As for the semi-structured or unstructured decisions, decision support systems (D88) and expert systems (ES) can provide assistance to managers. Models of business operations can be developed with decision support software, including advanced statistical, management science, and modelling packages, or less complex spreadsheet programs. These packages and models can then be used to manipulate information collected in the intelligence stage to develop and evaluate a variety of alternatives. Thus the information system should contain decision models to process data and generate alternative solutions. It should assist with checklists, templates of decision processes, scenarios etc. The models should assist in analysing 'the alternatives.

3. Information for the Choice Phase

In this stage a final selection of a particular course of action has to be made out of the various alternatives generated in the preceding design stage. Here a manager can use information tools that can calculate and keep track of the consequences, costs and Opportunities provided by each alternative designed in the previous stage. 

                   Information systems should help managers select a proper course of action. An information system is most effective if the results of design are presented in a decision-impelling‘format. The final choice would depend whether there is a single criteria or objective on which it is to be decided or whether the delcision situation is one which involves multiple criteria and objectives. Most decision making situations fall under the multiple criteria category, which is more difficult and complex and Operations researchers are just about getting into this field. The manager is hardly an optimiser now; he believes in satisficing. Worse still, one has to account for factors both subjective and objective, quantifiable and non-quantifiable, tangible and intangible. A technique called Analytic Hierarchic Process (AHP) developed by Saaty is finding a great deal of application in such situations and seems to be becoming a great boon for decision makers. An ‘expert choice’ software is available for the purpose of prioritisation of alternatives. 

               The quality of the choice stage depends very much on the quality of inputs made from the previous two stages -intelligence and design phases. It is possible that the manager, even though at the choice stage, might like to refer and return to the previous stages and reopen the issues for more data or alternatives etc. Information systems can help managers in the choice stage in various ways. Managers can be provided with summarised and organised information emphasising major points such as major assumptions, resource requirements and expected results of each decision alternative. Some type of a ‘what-if’ simulation analysis could be established.

4. Informatio for the Implementation Phase

This is the final stage of the decision making process. It is concerned with implementing and monitoring. When the choice is made in the previous stage, the role of the system changes to the collection of data for further feedback and assessment. The information systems must help managers monitor the successful implementation of the decision. Here managers can use a reporting system that _ delivers routine reports on the progress of a specific solution. Some of the difficulties . that arise are resource constraints, and possible ameliorating actions. Support systems can range from full-blown Management Information Systems to much smaller systems and project planning (PERT/CPM based) software operating on micro-computers. Feedback about business operations affected by a decision helps a manager assess the decision’s success or failure, and whether follow-up decisions are needed.

Also read-Introduction to decision making

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How Stanford University was established ?

A lady in a faded light cotton dress and her husband, dressed in a homespun wornout suit got off the train in Boston, United States. They walked with a feeling of fear and shyness into the outer office of the President of Harvard University. They had no appointment to meet the President. The Secretary could tell in a moment that such awkward persons typical of rural areas had no business at Harvard University noted for business studies and law. The lady wrinkled her brow in anger and disgust. The man said softly that they wanted to see the President. The Secretary said in a sharp, short way that he would be busy all day. The lady replied that they would wait. 

                For hours, the Secretary took no notice of them. She hoped that they would become discouraged and go away. They did not. And the ,Secretary grew frustrated. She told the President that they would just see him for a few minutes and leave and he sighed in irritation and  gave a quick shake of his head.

              Being a man of importance he did not have time to spend with them. He hated country folk with homespun clothes moving in his outer office in an untidy way. The President, not gentle and harsh, walked stern-faced with dignity toward the couple. The lady told him that they had a son , who attended Harvard for one year and he was accidently killed a year ago. She continued that they would like to give a building to Harvard somewhere on the campus as a memorial to their son. The President rolled his eyes, and glanced at the couple. He then spoke out with anger that they had no idea how much a building would cost. He added that they had spent more than a seven and a half million dollars in the construction of a building over there. 

Also read:Secret of happy long life....

                         For a moment the lady was silent. The President was pleased. He could get rid of them then. And the lady turned to her husband and said quietly that was all it would cost to start a university. She told him that they would start their own university it he could agree. Her husband nodded. 

         The President’s face sank in confusion and in great doubt. Mr. and Mrs. Leland Stanford walked away.They travelled to Palo Alto in California. There they established the Stanford university that bears their name. It is a memorial to their son whom Harvard no longer cared about.

Source:- wisdom montly digest

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Decision making-2-management study

UNSTRUCTURED DECISIONS

Thus far we have been discussing the structured programmable decisions which are very large in number and perhaps more easy to handle as compared to the 

unstructured or relatively less structured decisions which we would now like to 

discuss. Though fewer in number as compared to the structured situations ,this category of decisions is more repetitive in nature, usually 'one shot’ occurrences for which Standard responses are usually not available Hence they recuire a creative process of problem solving which is specially tailored to meet the requirement of the situation on hand. In fact managers at higher evels in an organisation are usually faced with more such unstructured decision making situations. Some have aptly described the situations as somewhat 'strategic’ in nature as compared to the ‘tactical’ orientation of the structured decisions at the lower levels of management.

Strategic decisions are non-repetitive, vital and important and aim at determining or changing the ends or means of the enterprise.Since each manager, in the case of such unstructured, non-programmed decisions, may bring, his own personal beliefs, attitudes and value judgment to bear on the decision process, it is possible for two managers to often distinctly different solutions to the same aroblem, each  claiming that he is acting rationally. In fact the ability to make good non-programmed decisions helps to distinguish effective managers from ineffective managers. Unstructured decisions are not simple. They are usually quite complex in nature. We can’t shy away from them for someone has to ultimately make these decisions even though there are inherent dangers when confronting I'll-structured problems. Non-programed decisions are essentially new and unique. They have to be often solved de novo. There is no tried and true method of handling them. Unstructured decisions are those in which the decision maker must provide Judgment, evaluation and insights into the problem definition.

ADDITIONAL CATEGORIES

There are many ways of categorising decisions as proposed by various persons from time to time. We have already discussed structured and unstructured situations. Some ' have termed them as programmed/programmable and non-programmed/non programmable decisions.Yet others have talked of routine/repetitive and non-routine/non-repetitive decisions. Some have stated the range of tactical and strategic decisions, others have termed them as minor and major decisions. We can easily have just two classes of decisions as ‘ follows -

Class I : Unstructured, Non-programmable, Strategic, Major, Routine, Repetitive, Complex, Long-run.

Class Il : Structured, Programmed, tactical, Minor, Non-routine, Non-repetitive, Simple, Short-run.

Departmental, Inter-departmental and Enterprise Decisions

Let us discuss decisions that could he departmental, inter-departmental and  enterprise decisions. For instance, sanctioning leave to an employee is a departmental decision, but making a slight change in the design of the product is an interdepartmental decision, and entering a new line of business is an enterprise decision. The department level decision is strategic in nature whereas departmental level is tactical in nature .

Organisational and Personal Decisions

When an executive acts formally in his expected role in an organisation, he makes organisational decisions. However, when the manager takes a decision in his personal capacity and not as a member of the organisation, it is known as a personal decision. For instance, transfers that are effected by an executive are organisational decisions. However, an executive who decides to leave the present organisation is making a personal decision.

Individual and Group Decision Making

Decisions may be taken either by an individual or by a group or a committee. It is difficult to say which is a better method of taking decisions. Each method has its strengths and weaknesses. We are all aware of the delaying tactics that are adopted by institution of committees in the resolution of conflicts On the other hand, it is argued that two blockheads are better than one. There would be richer ideas and many more alternatives generated in the process. But when it comes to assessment of selection, there could be ‘lot of heat’ generated. How does one resolve such a situation? Is it by 

consensus? or by voting?

1) Individual Decisions

According to Simon, “It is impossible for the behaviour of a single isolated individual to reach any high degree of rationality. The number of alternatives he must explore so great, the information he would need to evaluate them so vast, that even an approximation to objective rationality is hard to conceive. The individual decision maker is an individual human being --the one factor most vital and most difficult understand because of various factors such as age, perception, intelligence, experience in a given area, confidence in decision making, time available, resource position, upbringing, family background, and so on that could come into play. 

             The most mysterious factor is still this decision making individual human being. How and why an “individual acts in a certain way at a certain time is still quite a mystery. The individual decision maker could have quite an amount of prejudice and bias that is inherent on account of perceptual processes which act as great filters. We only accept what we want to accept and hence only such information filters down to our senses, and secondly, the perception is highly subjective. The information gets , distorted to coincide with our pre-established beliefs, attitudes and values. 

               These are additionally ‘cognitive’ constraints. Psychologically we are always uncomfortable with decision making. We are never sure if our choice of the alternative was correct and optimum, until the impact of the implication of the decision has been felt. This makes us feel very insecure and could be one of the many causes of ‘stress' in individuals leading to hypertension 'and other health complications. 

                  No doubt it is important to have adequate and accurate information about the situation for good quality decision making. However, it must be recognised that “an individual has constraints of nature such as physical, psychological, sociological etc. These limit the amount of information the individual can handle.

ii) Group Decisions

As for group decisions, these are usually taken for major issues in order to secure wider cooperation, acceptability and coordination. Usually in a group like situation the chances of subjective errors are reduced and more options are thrown open. If the  group is larger, such decisions suffer from unnecessary delays, deadlocks and petty party politics.

Some advantages of group decisions are

i) increased acceptance by those affected and hence implementation is easier.

ii) Easier Coordination.

Ill) Easier Communication.

iv) More information processed on account of availability of a larger number of specialists in the group.

v) Group decision making is more democratic in nature. 

vi) Participative group process builds up a training ground for subordinates and others which allows for smooth handover when individuals leave the scene (no vacuum is created).

Let us novv enlist some of the disadvantages of group decisions.

i) Group decisions take longer.

ii) Groups can be indecisive.

iii) Groups can compromise.

iv) Groups can be dominated.

v) Group members may exhibit “focus effect” viz., the group may just focus on one or a few suggested alternatives and spend all the time in evaluating these and may never come up with other ideas thus limiting the choices

DECISION MAKING PROCESS 

Simon’s Decision Making Model

Let us now look at the decision making process as proposed by Herbert A. Simon. His model is a conceptual framework that divides the decision making process into 

the following stages or phases:

i) Intelligence Activities: At this stage, a search of the environment takes place to identify events and conditions requiring decisions. Data inputs are obtained, processed and examined for clues that may identify problems or opportunities.

ii) Design Facilities: At this stage, alternative courses of action are developed, analysed and evaluated. This involves processes to understand the problem, to generate solutions, and to test solutions for feasibility

iii) Choice & Implementation Activities: Here one has to select an alternative as course of action from those available. A choice is made, implemented and monitored.

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Decision Making1- Management study

INTRODUCTION TO DECISION MAKING

The field Of decision making is vast. There have been many approaches to managerial decision making.These have ranged from the strictly quantitative as typified by the methods of operations research -to those based on human and Organisational behaviour. It is only recently that those working in the area Of decision making have started to combine approaches that could cater to the multiplicity Of subjective and Objective factors, and the multiplicity of criteria and-Objectives -some in conflict with one another. 

            Decision making is an essential part Of management. Some have even suggested that. management 15 synonymous with decision making. Managers are decision makers and problem solvers. Whether a manager is involved in evaluating new Opportunities or eliminating long standing difficulties, decision making for management is essentially problem solving. The process of deciding is intimately related to the whole process of knowing (or cognition ). Knowing “what the problem is” will assist in deciding “what to do about it”. that us finding the best solution. This is basic for each individual personally and also for a professional manager, whose main orientation is towards the making of decisions There is always an implicit Opportunity loss associated with poor decisions. They are the foregone gains, profits or cost savings, which could have been realised had a better decision been made. 

        However the process by which one arrives at a decision is quite complex; in fact no one process can be applied to all decisions Over the decades, decision-making methods have evolved from primitive to supersophisticated, ranging from the instinctive/intuitive approach, to traditional precedent based approach, to the commonsense approach, to the scientific method: A decision involves many intuitive and deep-seated Cognitive mechanisms that cannot be observed fully or directly influenced. What can be influenced are the behaviour patterns, the analytical procedures and the sequence of logic that are followed 1n “making a decision Ideals, objectives and goals form the background against which decisions are made. 

            There are many types of decisions, some that are completely specified, some partly specified and many unspecified We shall discuss how computers have entered in decision aiding process, who all are the end users of the systems, the different types of decisions, the decision making process and the implications for the information systems analyst.

STRUCTURED DECISIONS

These structured decisions are those that can be programmed. They are essentially

repetitive routine and involve a definite pnocedure for handling them so that they do not have to be treated each time as if they were new. 

            It has been seen that in general at the lowest level in the organisation viz. the, Operational level and the managerial staff, deal mostly with such fairly well structured problem. In the past most successful applications of information systems have come in dealing with structured, operational and management control decisions. These fall realiy in the domain of transaction processing and it is for this reason that some researchers prefer to call such systems as TPS-Transaction Processing Systems, rather than MIS--Management Information Systems. 

        Thus structured decisions which are also called programmable decisions involve situations where the procedures to follow when a decision is needed can be specified in advance. Therefore such

decisions are structured or programmed by the decision procedures or decision rules develoed for them. structured decision could possibly involve what is known as a deterministic decision or an algorithmic (step y step procedure) decision. In this case, the outcome of a decision can be determined with certainty if a specified sequence of activities viz. the algorithm is performed. No doubt many decision situations do not all come under deterministic criteria. There might be probabilistic decision situations. Since, in this case enough probabilities about possible outcomes are known a decision can be statistically taken or determined with an acceptable probability of success.

Herbert A Simon stresses the programmable part of the structured decisions and“ accordingly terms ‘structured decisions’ as programmed decisions‘. In the programmed dccisions, a problem (or one very similar) occurs frequently enough so that a fixed routine or programme is established for solving its Programmed decision are in fact those that are made in accordance with some policy, rule or procedures so that they do not have TtTW handled de novo each time they occur. In fact these decisions are generally repetitive and routine and are obviously the easiest for managers to make It is for these reasons that such managerial problems are relegated to the supervisory level.The supervisors fall in the first entry ring of management It gives persons of this level the slight ‘kick’ or 'morale boost' as they have entered into 

‘ the management cateogry’. No doubt the perceptions will have to change since they have moved across from the worker/operator level to the other side of the table. Decisions implemented by the supervisors might feel elated, but when compared to managers at the higher levels, the supervisory level decisions are pretty straight forward and simple because of their structured nature. These decisions are in fact routine decisions and they require little deliberation from the top man’s point of view. 

        These routine decisions are taken against a familiar background in everyday business operations. Such decisions involve no extraordinary judgment, analysis or authority, since they are to traverse through more or less fixed avenues On account of the experience gained or because of the trivial nature of the problems on hand, management has already established a set of rulestolicies and procedures. With the organization's

Goals, policies and processes established, the routine decisions demand, on the part of managers, a power of selection of the best path as the 

connecting link between the given means and the established ends. 

               The structured decisions, often termed as programmed decisions, are labels that are derived from the Jargon of the computer field where a program is defined as a plan for the automatic solution of a problem. Programs are simply a string of instructions to accomplis an assignment. However, it is well known that all problems do not lend themselves to automatic programmed solutions. No doubt an information system analyst might be having his cherished dream of having all decisions in an organisation programmed or fully automatic. Then perhaps there would be no dividing line as regards variety of type of skills required by managers at various levels. You would recollect that studies have shown that more technical skills are required at the lower levels whereas more conceptual skills are required by managers at the higher levels, apart from human skills that are required at all levels of management.

       It has been seen that by far the greatest number of business decisions are repetitive and routine ones. If this is true, then there is an overriding need to automate or ' program these decisions so that managers and executives could delegate such problems to lower levels and have them made by one or more techniques of programmed decisions. It is interesting to note that in some cases even up to 90% of management decisions are routine ones. 

                Most programmed decisions are solvable by the ‘force of habit’. We go to our offices make decisions about the in-basket or in-tray correspondence, and take dozens of actions daily that are “programmed” through sheer-force of habit. In fact this is gained by ‘experience’ in an organisation. When ever there are turnovers, it is this valuable esperience that is lost, which could be quite costly. It usually takes time and money for newer recruits to acquire this experience. 

           The ‘force of habit' in fact leads to certain traditions, conventions and practices which might become a platform towards formal statement of rules, procedures, policies, etc. At this stage, it would be worthwhile to spend some time looking at what constitutes a rule, procedure or a policy. 

            A rule is a specific policy statement about the conduct of certain affairs. For instance a rule may state that any person who comes in late to work will face disciplinary action. it could be that if an employee is to start his office hours from 9.00 a. m. if he comes by 9.15 am he could be tolerated. Time between 9.15 a. m. to 9. 30 am could be allowed at best say thrice in a month. Anything beyond these limits would necessitate some disciplinary action. A rule is frequently used when confronting a well structured problem. Rules are usually rigid which might specifically tell about ‘dos and donts'. Rules are usually framed in a manner to take care of almost all situations. However, we do have instances where the rule applies ‘show me the man, I'll show you the rule’. You often hear the term that ‘rules are silent on this issue‘ Indeed rules are quoted again and again depending on what” is to be proved or  justified or rationalised in order to take the final decision. 

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