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Frameworks for Information Technology

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Frameworks for Information Technology
A framework provides you with a way to organize your thoughts and analyze a problem. A major function of frameworks in organizations is to support decision making.
There is no one theory of frameworks, information systems and technology, though a user or designer of a system needs some conceptual model of an information system.
In this course we will learn about how decisions are made in the organization and how frameworks may be designed to support decision making.
It is important to have some conceptual model when making decisions pertaining to the design of frameworks and information systems.
Types of Decisions
Not all decisions are alike; some involve different levels of the organization and some are more important than others. There are three broad categories of decisions made in organizations.
Click the numbers to view the categories of decisions.
1: Strategic Planning
In strategic planning the decision maker develops objectives and allocates resources to obtain them. Decisions in this category are characterized by long time periods and usually involve a substantial investment and effort. The development and introduction of a new product is an example of a strategic decision.
2: Managerial Control
Decisions involving managerial control concern the use of resources in the organization and often include personnel or financial problems. For example, an accountant may try to determine the reason for a difference between actual and budgeted costs.
3: Operational Control
An operational control decision covers the day-to-day problems that affect the operation of the firm: What should be produced today in the factory? What items should be ordered for inventory?
Top managers in the organization spend more time on strategic decision making than supervisors, and supervisors would be more concerned with operational decisions.
Stages in the Decision Making Process
In finding and solving a problem, the decision maker faces myriad decision cycles.
1. What is the problem?
2. What is its cause?
3. What additional data are needed?
4. How should the solution be implemented?
Each of these major steps in solving a problem involves the solution of sub problems.
Stages in the Decision Making Process
The Nobel laureate, Herbert Simon (1965), suggests a series of descriptive stages for decision making to help understand the decision process.
Stage Four
The implementation stage is the fourth stage, in which we ensure that the solution is carried out.
Stage Three
In the choice stage, the decision maker selects one of the solutions. If all the alternatives are evaluated well, the choice stage is usually the simplest one to execute.
Stage Two
During the design stage, the problem solver tries to develop a set of alternative solutions. The problem solver asks what approaches are available to solve the problem and evaluates each one.
Stage One
The first stage is defined as intelligence which determines that a problem exists. The decision maker must become aware of a problem and gather data about it. We have described this stage as problem finding or identification.
The Decision Making Process
Stages in the Decision Making Process
First, a decision maker must recognize that a decision needs to be made. Although this observation probably sounds obvious, there have been many examples of individuals who ignored the need for decisions.
Next the decision maker must identify alternatives, a process similar to the design stage in Simon's model of decision making.
For routine or repetitive decisions, the decision maker may be able to simply choose the usual action. (e.g. order a determined amount when stock levels reach a certain level.)
The decision maker must rate the alternatives on some basis; he or she then chooses the most attractive (or in some cases the least unattractive) alternative.
If the situation is hopeless, the decision maker may abandon the problem. In most organizational settings, this last course of action is not acceptable or is certainly not encouraged.
How do Individuals make Decisions?
Once the decision maker has made a choice, it is necessary to implement it, that is, to effect the choice. Many managers and leaders have been faulted, not because they made bad decisions, but because they failed to take the action necessary to implement them.
Implementation is often difficult for managers because they have to act through others. The individuals charged with implementation may not be committed to the decision or may have reasons to subvert it.
Making a decision can be a complex undertaking; however, decisions are what determine the direction of our lives and our organizations.
Information systems and frameworks, among other roles, help provide information for decision making.
Frameworks for Information Technology
Decision making and information processing are very important activities in a business organization. Frameworks must address these activities, and information systems can greatly improve the quality of decision making and information processing.
Click on the managers below to learn about decision making and a synthesized framework.
Types of Decision
Herbert Simon proposes that there are two types of decisions: programmed and non-programmed.
Programmed decisions are routine and repetitive and require little time spent in the design stage. Entering data into a spreadsheet program is an example of a programmed activity.
Non-programmed 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 decisions are at one polar extreme or the other; most fall along a continuum between programmed and non-programmed.
Structured and non- structured have been proposed as more suitable terms for these decisions.
A Synthesized Framework
A synthesized framework combines the theories of decision making to come up with a business framework that is optimal for making the best decision based on the problem or situation in occurrence.
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.
Many individuals in the information systems field believe that unstructured decisions have the greatest pay off for the organization.
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.
Elaboration of a Synthesized Framework
Click on the headings on the left to read examples of decision types in areas of management in the organization.
Classification
Structured
Semi-Structured
Unstructured
Operational Control
Management Control
Strategic Planning
Structured
Order
processing,
accounts
payable

Budgets,
personnel
reports
Warehouse
location,
transportation
mode mix
Semi -
Structured
Inventory
Control,
production
planning
Analysis of
Variance
Introduction
of new
product
Unstructured
Cash
management
Management
of personnel
Planning for
R&D
Adding Organizations and Decisions to a Framework
An expanded framework in light of new IT applications provides additional insights.
An organization develops some internal structure so the people who work in the organization can perform their tasks.
People undertake these tasks so the firm can accomplish its mission or purpose, such as manufacturing and selling a product or providing a service.
An expanded framework separates Information Technology from the other technology in the firm because IT has become central in linking all parts of the organization and helping it accomplish its tasks.
Adding Organizations and Decisions to a Framework
A significant feature of the framework is the idea that a change in one component is likely to cause changes in others.
A change in the environment may force the company to restructure itself-change its tasks and even the number of people who are associated with it.
Many firms were "restructured" and "downsized" or reduced their numbers of employees to improve profits in the 1990s.
The great communications advances of the twenty-first century have seen many people choose to work from home, and connect to the company via email and networks, known as "working remotely".
On the next slide we will examine a model framework based on Information Technology, called the Harold Leavitt Model.
A Framework Based on IT: The Harold-Leavitt Model
Click on the blue areas to read more about each one.
Organizational Structure
Environment
Task
Information
Technology
People
Environment
Firm’s Technology
Organizational structure
1. Formal organizational structure (hierarchy, teams)
2.Corporate roles, responsibilities
3. Corporate goals, strategy, policies
4. Informal communication structure, culture
5.Formal and informal decision processing mechanisms
People

1. Intrinsic factors: age, education, knowledge, technical skills, managerial skills, leadership skills, personality types, cognitive styles
2.Motivational factors: personal objectives, utilities
3.Interpersonal factors: corporate political affiliations, friends, alliances, influence
4.Extrinsic factors: roles, responsibilities, position in organization
Tasks
1.Management categories: scanning, organizing, motivating, monitoring, controlling
2.Repetitive activities, non-repetitive activities
3.Individual level: learning, communicating, deciding, performing
Technology
1.Physical asset structure: land, buildings, plant, equipment
2.Financial asset structure
3.Geographic distribution of resources
Information Technology
1.Databases, storage devices
2.Computational capabilities, software
3.Communication capabilities, networks
4.Knowledge bases
5.Information architecture
6.Environment
7.National and global economy
8.Customers, suppliers, competitors
9.Products, substitutes
10.Technological innovation

Adding Organizations and Decisions to a Framework

The systems we have just discussed may be used by an individual, a workgroup, or the entire organization, or they may be inter-organizational systems that connect one or more organizations.
For example, there are many ways to structure an organization and there are a large number of influences on people. Firms in the 1990s chose to dramatically cut employment numbers. Firms in the twenty-first century often allow employees the option of working from home. Information Technology opens up different ways to communicate both within the organization, communicate with suppliers and communicate with the customer market. These factors are important to the decision processes in the organization. They affect the way we can use Information Technology to help the organization achieve its objectives.