FREE online courses on Information Technology - Chapter 2 FRAMEWORKS FOR IT - Decision-Oriented Frameworks

 

In the previous chapter we discussed the decision-making stages of intelligence, design, and choice proposed by Simon. Anthony is concerned with the purpose of decision-making activities, whereas Simon stresses methods and techniques. In addition to the stages listed above, Simon proposes that there are two types of decisions: programmed and nonprogrammed. Programmed decisions ar routine and repetitive and require little time spent in the design stage. Posting journal entries would be an example of a  programmed activity. Nonprogrammed decisions are novel and unstructured, for example, deciding on the marketing mix for a set of products. There is no one solution and much time is spent in design since the problem has probably not appeared before. Clearly, few decision are at one polar extreme or the other and fall along a continuum between programmed and nonprogrammed.

 

Different types of decision-making technology are suitable for attacking each type of problem. Programmed decisions have traditionally been made through habit, by clerical procedures, or with other accepted tools. More-modern techniques solving programmed decisions involve operations, research, mathematical analysis, modeling, and simulation. Nonprogrammed decisions tend to be solved through judgement, intuition, and rules of thumb. Over time, we expect to see new technology providing more programming for nonprogrammed decisions; that is, decisions will tend to move toward the more programmed pole of the continuum.

 

A framework synthesizing the work of Anthony and Simon is very appealing because it helps us classify a variety of systems. Table below classifies Anthony's decision types from operational control to strategic planning, on a scale of structured to unstructured.

 

In a structured decision, the three phases, intelligence, design, and choice are fully structured. In an unstructured decision, all three phases are unstructured. Any decision in between the two extremes is semi-structured. As in Simon's framework, the line between structured decisions shifts over time as new decision techniques are developed and applied to unstructured problems.

 

Classification	Operational control	Management control	Strategic Planning
Stuctured         Semi-structured       Unstructured	Order processing, accounts payable       Inventory control, production planning   Cash management	Budgets, personnel reports       Analysis of variance       Management of personnel	Warehouse location, transportation mode mix   Introduction of new product     Planning for R&D

 

Table: The Gorry-Scott Morton Framework

 

From Table above, it appears that many information systems have attacked problems in the structured, operational control cell. These problems are similar in many organizations and are among the most easily understood. It is easier to mechanize these decisions or strategic planning decisions. Since operational systems are important to the daily functioning of the firm, they are high-priority applications.

 

Many individuals in the information systems field believe that unstructured decisions have the greatest payoff for the organization. The development of systems for unstructured problems is major challenge and is undoubtedly more risky than the development of comparable systems for structured problems. The goal and design techniques for unstructured decisions differ from those for structured ones. In the structured case, the goal of an information system is usually to improve the processing of information. In an unstructured situation, the goal of the information system is more likely to improve the organization and presentation of information inputs to the decision maker.