MIS course plan

Knowledge Management And Decision Making

 

by

Matthew Martin

Here we will look at the role of the manager in an organisation and how information systems can help the manager perform his role and what types of information systems are most useful to managers.

 

Contents

1. The Schools Of Maangement Theory
2. Decision Making
3. Information Technology And Management Processes
4. Knowledge Management Systems

The Schools Of Management Theory

The formal study of management started in the 1880s as an offshoot of engineering, where large engineering projects required careful management. There are three main approaches, or schools, of management theory.

Technical-Rational:

Organisation of tasks into jobs and jobs into production systems. Emphasis on the manager understanding the technical details and precision of understanding. This was the earliest school of management theory to emerge, the first work from the perspective being done in the late 19^th Centaury, so it is some time called the Classical school.

The manager is seen as performing key functions:

• Planning
• Organising
• Co-ordinating
• Decision making
• Controlling.

Behavioural:

Asks how well an organisation can adapt to changes in the external and internal environment. The behavioural school emerged in the 1920s and 1930s, in part as a reaction against the technical-rational school which was seen as failing to treat the people in an organisation as human beings. The behavioural school can be divided further into two sub-schools:

• The Human Relations School which looks at the relationships between people in an organisation and the behaviour of people. Managers can be seen as fulfilling a number of different roles:
• Interpersonal Role: Managers are figureheads, acting in a symbolic role for the organisation. They act as leaders for their subordinates, motivating them.
• Informational Roles: Managers act as an information nexus, gathering information from within the organisation and from outside the organisation, redistributing the information to those who need it within the organisation.
• Decisional Roles: Managers are the decision makers, resolving conflicts, allocating resources, negotiating.
• The Systems Structural School which looks at the structure of the organisation and the ability of the organisation to adapt as a system.

In the behavioural school managers get things done by making personal agendas which are in-line with those of the organisation and by building personal networks at all levels within the organisation (both through formal and informal channels). Managers use the personal networks the build in order to achieve their personal agendas. Research on this was lead by Kotter.

A typical view of a manager is that of a leader making sweeping statements and decisions about the organisation but this view is often incorrect, as the researcher Wrapp has shown. Managers can also be seen as getting involved in low-level problems and decision making within the organisation. This keeps the manager well informed about what is going on. The manger focuses his energy on problems that he can directly affect. Managers acting in this way avoid making sweeping statements about policy because this can hold them to too much and make it difficult to change direction in the future. Such mangers tend to be vague in describing the overall nature of the organisation but still provide a strong sense of direction by dealing with problems as they arise.

Cognitive:

Focuses on the knowledge that the organisation accumulates. Looks at organisational learning and application of knowledge. There are two sub-schools:

• Managerial Sense-Making: Managers in this view must provide meaning to situations both for the organisation as a whole and for individuals. Managers do this by creating knowledge structures or mental maps. A key aspect of this is information filtering performed by managers. A consequence of information filtering is that the knowledge structures are as wrong as they are right. Summarising we can say that the manager:

1. Managers produce knowledge structures and perform information filtering.
2. Managers are the problem solvers and decision makers. To do this they must define the problems.
3. Managers process information from within the organisation and from outside the organisation.
4. Managers create information scanning processes and routines that scan both the internal and external environments for information in accord with the manager’s knowledge structures.

• Knowledge-Based View: In this view the survival of the organisation depends on its ability to gather, produce, organise, maintain and disseminate knowledge. The key points of this view are:

1. Knowledge is the key asset of the organisation.
2. Knowledge is complex, it includes information, social relations, and personal skills. Personal knowledge can be encoded and captured by the organisation.
3. Knowledge can be explicit or tacit. Explicit is encoded in books and documentation. Tacit knowledge is implicit.
4. Both organisations and individuals can learn.
5. Knowledge can be physically encoded. This means that capital can be seen as knowledge.
6. Specialised knowledge allows the organisation to survive.
7. The strategic aim of the organisation is to develop “key competencies”, which are difficult for its competitors to copy.

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Decision Making

Decision making is clearly one of the key roles of the manager and it is also one of the most difficult areas of management.

Levels of Managerial Decision

There are four key levels of managerial decision making:

• Strategic Decision Making: Determination of the long term objectives of the organisation, an important aspect of which is predicting future conditions. Usually only a small number of high level managers are involved.
• Management Control: Monitoring the efficiency and effectiveness with which tasks are performed. Typically managers need to have close contact with all levels of the organisation. Control takes place within the context of strategy, policies and procedures.
• Knowledge-Level Decision Making: Managers look at knowledge, how it is used within the organisation, how it may be used in new innovative ways.
• Operational Control: How to carry out specific operational tasks that have been decided upon by middle and senior management.

Types of Decision

Decisions may be structured or unstructured.

• Structured Decisions: Performed within a structure, defined by rules and procedures. Often the type of situation has been previously encountered by the organisation and a procedure developed for dealing with it.
• Unstructured Decisions: No procedures exist. The decision maker (manager) must make a decision, providing the evaluation of the situation.

There is also a third category of the semi-structured decision, which is half-way between the two.

The Decision Making Process

The Individual and Decision Making Models

Four models are available to describe how individuals can take different approaches to decision making. These are necessarily behaviourally and psychologically orientated.

The Organisation and Decision Making Models

Organisational models of decision making assume that is not individuals that make decisions but groups and organisations. Organisational models of decision take into account the structure and political environment within the organisation.

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Information Technology and Management Processes

The increased use of IT systems by managers has made it easier for managers to gather information and analyse data. A part of this is increased communication. As employees increasingly work in an electronic environment, one effect may be to empower employees, allowing them to make more decisions. This alters the structure of the organisation, making the decision making process distributed. The design of new IT systems can take into account the decision-making processes and the role of the individual and the organisational structure.

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Knowledge Management Systems

A range of IT systems are available to assist in the management of knowledge within different areas of an organisation.

Sharing Knowledge:

To help share knowledge within the organisation, assisting in group working, allowing individuals to work together more effectively as a group:

• Groupware (e.g. Lotus Notes),
• Intranets.

Distributive Knowledge:

To help distribute knowledge within the organisation, Office Automation Systems (OAS).

• Word processing,
• Desktop publishing,
• Web publishing,
• Electronic calendars
• Desktop databases.

Capture and Codify Knowledge:

Artificial Intelligence (AI) systems:

• Expert Systems / Knowledge-Based Systems (KBS) – rules-based systems, codifying expert knowledge in a computer program. A database of case studies may be used, termed Case-Based Reasoning (CBR).
• Neural Networks – learning program.
• Fuzzy logic – going beyond the Aristotelian either/or logic of computer systems.
• Genetic algorithms – evolving programs, that learn from their environment.
• Intelligent agents – a program that performs a repetitive task on behalf of a user or program using any one or combination of the above AI approaches.

Create Knowledge:

Knowledge work systems:

• CAD,
• CAM,
• Virtual reality,
• Investment workstations.

by

Matthew Martin