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Information Based Decision

Making and Source of Knowledge

By: Prof. Monali Jani
Making a decision…
• An integral part of day to day life

• Choice making from available alternatives with

apparently similar importance
Managerial roles
• Interpersonal
▫ Figurehead
▫ Leader
▫ Liaison
• Informational
▫ Monitor
▫ Disseminator
▫ Spokesperson
• Decisional
▫ Entrepreneur
▫ Disturbance handler
▫ Resource Allocator
▫ Negotiator
Decision Making Process
• Identification of a problem or need
• Identifying different alternatives
• Selecting different criteria
• Evaluating the alternatives
• Making a choice
• Implementation
• Evaluation and feedback
Business Decisions
• Goals
• Strategies
• Tactics
Hierarchy of Information Based
Decision Makers
Top Tier - Visionaries (guided by
research, developing methodologies)

Middle Tier - Standardized Decision

Makers (Some based on business
research, tried and true methodologies)

Base Tier - Intuitive Decision Makers

(based on past experience or instinct,
secondary data as a source)
• Data, Information & Knowledge
• Explicit Knowledge (easily communicated)
• Tacit Knowledge (we do not know we know,
Sources of Knowledge
• Experience
• Expert Opinion
• Reasoning
▫ Deductive
▫ Inductive
Deductive Reasoning
• Conclusive argument.
• Conclusion derived from the reasons/premises/
facts given.
(Ex.) 1. We promote a product but sales do not

2. We run an effective promotion and sales increase.

Deduction: Ineffective promotion will not increase

the sales.
Inductive Reasoning
• Conclusion is a hypothesis
• Asking “why” to the facts
• Inferential jump beyond the evidences
▫ Why sales did not increase?
 Regional retailers did not have sufficient stock
during promotional period.
 A strike by the truck employees prevented stock
from arriving in time
 A hurricane closed all retail locations in the regions
for 10 days during the promotion.
Knowledge based Systems and Decision
• Transaction Processing System (TPS)
▫ Collects, stores, modifies and retrieve the transactions in
the organization
▫ Ex. E- Payment, Air ticket reservation
• Management Information system (MIS)
▫ Used to analyze operational activities, developing standard
• Decision Support System (DSS)
▫ Data and models intended to assist in the solution of semi/
unstructured problems.
▫ Ex. What-if Analysis, Cost/ Benefit analysis
Business Intelligence
• A Business Intelligence System (BIS) is designed
to provide the manager with ongoing
information about events and trends in the
technological, economic, political & legal,
demographic, cultural, social and most critically,
competitive arenas.
Who will conduct the research???
Research Firms

Business Consultants