KMBN208/MIS/UNIT-II

INFORMATION,MANAGEMENT & DECISION MAKING

Attributes of Information & It’s relevance to Decision Making

Quality of information refers to its fitness for use or its reliability. Some of the attributes
of information which influence the quality of information are as follows:

1. Timeliness
Timeliness means that information must reach the recipients within the prescribed time frame.
Timely information can ensure correct executive action at an early stage. The characteristic of
timeliness, to be effective, should also include current information.
2. Accuracy
Accuracy is another key-attribute of management information. It means that information is free
from mistakes and errors, is clear and accurately reflects the meaning of data on which it is
based. It conveys an accurate picture to the recipient, who may require a presentation in
graphical form rather than tabular form.

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3. Relevance
Relevance is yet another key attribute of management information. Information is said to be
relevant if it answers specifically for the recipient what, why, where, who and why? In other
words, the MIS should serve reports to managers, which are useful, and the information helps
them make decisions.
4. Adequacy
Adequacy means information must be sufficient in quantity. MIS must provide reports
containing information, which is required in deciding processes of decision-making.
5. Completeness
The information, which is provided to a manager, must be complete and should meet all his
needs. Incomplete information may result in wrong decisions and thus may prove costly to the
organization.
6. Explicitness
A report is said to be of good quality if it does not require further analysis by the recipient for
decision-making. Thus the reports should be such that a manager does not waste any time on the
processing of the report, rather he should be able to extract the required information directly.
7. Exception based.
Top managers need only exception reports regarding the performance of the organization.
Exception reporting principle states that only those items of information, which will be of
particular interest to a manager, are reported. This approach results in saving precious time of
the top management and enables the managers to devote more time in pursuit of alternatives for
the growth of the organization.

Types of Information
Introduction: Information is a vital component of our everyday lives. It is the raw material that
fuels our decision-making, enables us to learn and grow, and helps us to communicate with one
another. In essence, information is the building block of knowledge, and without it, we would
struggle to make sense of the world around us. Types of information

Information comes in many different forms, including written text, images, videos, and audio
recordings. It can be accessed through various channels, such as books, the Internet, and social
media platforms. The rise of digital technology has revolutionized the way we produce,
consume, and share information, making it easier than ever to access vast amounts of data from
anywhere in the world.

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The importance of information extends far beyond our personal lives. It is a critical resource for
businesses, governments, and institutions, helping them make informed decisions and stay
competitive in a rapidly changing world. From scientific research to financial analysis,
information plays a crucial role in driving progress and innovation across all sectors of society.

As we continue to navigate the complexities of the digital age, understanding the nature and
power of information has never been more important. By harnessing its potential and using it
wisely, we can unlock new opportunities and solve some of the world’s most pressing
challenges.

The concept of Information

Information is a collection of data that has been processed, organized, or structured in a
meaningful way to convey knowledge, ideas, or instructions. It can be communicated through
various mediums, such as text, images, audio, or video, and can be accessed and shared through
multiple channels, such as books, websites, and social media.

At its core, information is a representation of reality, and it is used to convey knowledge about
the world around us. It can be factual, subjective, or even fictional and can take many different
forms depending on its purpose and audience.

Information can be defined as data that has been organized, processed, or structured in a
meaningful way to provide context, relevance, and value to a user. It can take many forms, such
as text, images, audio, or video, and can be communicated through various means, such as
books, websites, social media, or conversation. Information is essential for decision-making,
learning, and communication, and it plays a critical role in shaping our understanding of the
world around us. The quality and accuracy of the information can significantly impact individual
and collective outcomes, making it crucial to critically evaluate and verify the sources and
reliability of the information we consume.

Definitions of Information:

Information meaning assigned to data within some context for the use of that data. – Watters, C.
(1992)

“Information is an assemblage of data in a comprehensible form capable of communication. This

may range from content in any format – written or printed on paper, stored in electronic
databases, collected on the Internet, etc. -to the personal knowledge of the staff of an
organization.” – Prytherch, R. (2016)

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Information has its varieties. David B. Hertz and Albert B. Rubenstein (2014) have identified six
types of information [Fulbright, R., & McGaha, S. (n.d.)]. These are as follows:

 Conceptual information.
 Empirical information.
 Procedural information.
 Stimulatory information.
 Stimulatory information.
 Policy information.
 Directive information.

1. Conceptual information: Conceptual information refers to information that relates to abstract

or theoretical ideas, concepts, or principles. It is often used in academic or philosophical contexts
to discuss broader ideas or concepts unrelated to specific examples or instances. Examples of
conceptual information may include theories of psychology, philosophical concepts such as
justice or morality, or mathematical concepts such as calculus or probability theory. Conceptual
information is often used to build a framework or foundation for understanding more specific or
concrete information. It can also be used to explain complex ideas or to make connections
between seemingly unrelated topics.

2. Empirical Information: Empirical information is derived from observation, experimentation,

or direct experience. It is based on data that can be measured or verified through objective and
systematic methods. Empirical information is often used in scientific research, collected through
experiments, surveys, or other forms of data collection. Examples of empirical information may
include the results of a clinical trial, data on the effects of climate change, or observations of
animal behavior. Empirical information is valued because it is based on objective evidence and
can be replicated and verified by others. It is often used to inform decision-making and to
support or refute theories or hypotheses.

3. Procedural Information: Procedural information refers to information that provides

instructions, directions, or steps on how to perform a task or complete a process. It is often
presented as a manual, guide, or standard operating procedure (SOP). Procedural information is
commonly used in manufacturing, healthcare, and transportation industries, where precise and
consistent procedures are critical to ensuring safety, quality, and efficiency. Examples of
procedural information may include instructions on operating a piece of machinery, guidelines
for administering medication, or a step-by-step guide for performing a medical procedure.
Procedural information is designed to be clear, concise, and easy to follow, and it may include
visual aids such as diagrams or illustrations to help clarify the steps involved.

4. Stimulatory Information: Stimulatory information refers to information intended to provoke

or stimulate a reaction or response from the audience. This type of information is often used in

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advertising, marketing, or public relations campaigns, where the goal is to capture the audience’s
attention and encourage them to take action. Stimulatory information may be designed to evoke a
particular emotion, such as excitement, fear, or curiosity, or it may be intended to challenge or
inspire the audience to think differently. Examples of stimulatory information may include
provocative advertisements, political campaigns that use emotionally charged slogans, or
motivational speeches that inspire people to take action. Stimulatory information can influence
behavior, but it can also be controversial or divisive, depending on the context and the message
being communicated.

 e.g. Victory Day celebration.

5. Policy Information: Policy information refers to information that pertains to government

policies, laws, regulations, and guidelines that affect individuals, organizations, and society as a
whole. It includes information about policy objectives, processes, outcomes, policy
implementation, and evaluation data. Policy information is often used to inform decision-making
and monitor policies’ effectiveness over time. Examples of policy information may include
reports on the impact of environmental regulations, data on the effectiveness of public health
interventions, or analyses of the economic effects of tax policies. Policy information is essential
for ensuring transparency and accountability in government decision-making and facilitating
public participation and input into policy development processes. It is often disseminated
through official government websites, public records, and media outlets.

6. Descriptive information: Descriptive information refers to information that describes a

particular object, person, event, or situation in detail. It may include appearance, size, shape,
color, texture, or behavior. Descriptive information is often used to create a mental image or
picture of something or to provide a complete understanding of a particular topic or concept.
Examples of descriptive information may include product descriptions in e-commerce,
eyewitness accounts of a crime or accident, or detailed reports of historical events or cultural
phenomena. Descriptive information facilitates communication and understanding between
individuals and groups and provides context and background information in various fields such
as literature, art, and science.

Benefits of Information
Information has numerous benefits, including:

 Knowledge: Information helps us learn about different topics, subjects, and domains.
With the help of information, we can learn new things, expand our understanding, and
acquire expertise in various areas.

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 Decision-making: Information is critical for making informed decisions. It helps us

evaluate options, assess risks and benefits, and select the best action.
 Innovation: Information is a key driver of innovation. It inspires new ideas, enables us to
identify new opportunities, and facilitates the development of new products, services, and
technologies.
 Collaboration: Information facilitates collaboration and cooperation among individuals
and groups. It helps us share ideas, coordinate our efforts, and work together to achieve
common goals.
 Empowerment: Information empowers individuals by giving them access to knowledge,
resources, and opportunities. It enables us to take control of our lives, make informed
choices, and pursue our goals and aspirations.
 Economic Growth: Information is a critical factor in economic growth and development.
It helps us identify market opportunities, optimize production processes, and create new
products and services that meet the needs of consumers.
 Personal Development: Information contributes to personal development by providing
new perspectives, insights, and ideas. It helps us develop critical thinking skills, broaden
our worldview, and enhance our creativity and problem-solving abilities.

Models of Decision Making

1.Classical Model of Decision-Making

Decision-making is a complicated process that an understanding of relevant business models can
simplify. A skill set that organizations look for in employees is exceptional decision-making
skills. Having such employees makes it easy for management to decentralize decision-making
and allow employees to participate in making vital decisions.
There are decision-making models that management work with, varying from one business to
another. A decision-making model is a framework used to identify and solve business problems.
The classical decision-making model is also called the Rational Model, which is an approach
that combines logic and rationality to develop a final solution or response. It is based on the
premise that people are rational beings who carefully consider all available options before
making decisions.
Other common decision-making models include:

 Bounded rationality model: The approach of this model views people as seekers of the
best solution in every situation. However, the majority go for less due to the demands of
the best solutions. Therefore, most go for ''good enough.''
 Retrospective decision model: This model focuses on the past, as it is based on the idea
that all decisions should be recorded and reviewed regularly, preferably after each critical
event.

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 Intuitive model: The model focuses on developing and using human intuition. This
model assumes that a person's intuition will lead them to the best decision if they give it
the right opportunity. At times, highly consequential decisions are needed within the
shortest time, which does not offer management enough time to gather all information.
 Creative model: The model focuses on creativity as an important part of decision-
making. It assumes that people can develop creativity, and doing so can help them make
better decisions. Competition and the need for progress make creativity a significant
aspect of an organization.

Effective decision-making processes are paramount for successful businesses. With so many
models, selecting the right one can be challenging. But with information and preparation,
businesses can choose the best decision-making model to implement.
Classical decision-making helps leaders make the right decisions by balancing emotions and
considering various options. It is not just about thinking fast but also slow, weighing risks,
gathering data, analyzing pros and cons, and coming up with solutions that do not just look good
on paper but align with the long-term strategy and short-term goals.

Classical Decision-Making Model Assumptions

The classical decision-making model is based on four main assumptions:

 Full information: Before making decisions, a team takes time to gather enough relevant
information. The full information is a guarantee for this model due to all available funds
required and no time constraints involved. Therefore, it assumes that any required
alternatives for decision-making are available.
 Certain environment: The model avoids all risks by authorizing the decision makers to
remove all uncertainties during the process. Therefore, this means that the decisions made
have not accounted for risks.
 Clearly defined problem: Making rational decisions requires clarity of the problem
because one cannot solve a problem they do not understand. Therefore, it assumes that
the parties involved have clear objectives. It also assumes that the objectives and goals
are unambiguous.
 Rational decisions: It assumes that the decision makers are objective and logical
throughout the process, ensuring that all the decisions benefit the company.

All decision-making models have assumptions involved that account for their unique use.
However, in the classical decision-making model, there is no guaranteed reward for the decisions
made.

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Classical Decision-Making Model Steps

The rational model specifies the essential steps in implementing it. After management has
identified and defined the problem, the steps for implementation include:

I. Developing a list of alternatives: There is always more than one solution to a problem.
To find the best solution, it is essential that a business has multiple alternatives available.
The decision-makers can also explain why each solution is relevant by giving facts.
II. Ranking alternatives: After researching and generating all the needed facts for the
alternatives, a business can rank them. The available evidence gives the decision maker
enough details to rank them.
III. Choosing the best-suited alternative: The last step involves using the list to select the
best alternative. However, it is also important to re-evaluate all the alternatives until the
decision makers are certain about a particular choice.

When organizations implement decisions made from the rational model, it is vital to monitor the
results for some time. If the results are unsatisfactory, the business can repeat the process until it
finds a viable solution.

Administrative Model of Decision Making

The decision-making process is vital, especially in an organizational, administrative or business
context. Many factors, such as training, technology, competition and employee motivation
influence decision-makers. Indeed, the decision-making process is complex because it demands
extensive scrutiny and judgment.
Decision-makers must consider these factors when making organizational, administrative or
business decisions. One of the approaches they use is the administrative model of decision-
making. According to this model, decision-making is characterized by ambiguity and
uncertainty. The administrative model of decision-making is founded on the belief that
decision-makers are constrained by limited motivation and lack of time. As a result, they end up
settling on less ideal solutions.
Also referred to as the bounded rationality model, the approach assumes that people are not
100% rational. This limitation on rationality increases the possibility of making bad decisions.
Generally, people are prone to making decisions based on emotions. Furthermore, decision-
makers may fail to consider or calculate all factors accurately. Coupled with the fact that
organizations operate under extreme pressure and are subject to numerous variables, the
decision-making process becomes very complex.
How do decision-makers deal with these complexities? Organizations try to settle for the best
solutions as quickly as possible due to time, motivation and resource constraints. This approach
is called satisficing. In this case, decision-makers avoid exhaustively analyzing all possibilities.

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Instead, they settle on a few solutions and attempt to implement the best option. In most cases,
the implemented solution will be less than perfect.

Understanding Decision-Makers

A decision-maker is an individual who decides things. For example, an entrepreneur is the de

facto decision-maker in his business. Likewise, general managers, CEOs and directors are top-
level decision-makers in corporations and institutions.
There are two types of decision-makers:

1.The administrative man- The administrative man focuses on satisfaction instead of the
optimal outcome when making decisions. This decision-maker is comfortable with simplifying
the situation at hand. In other words, he does not determine and analyze all possible alternatives
before implementing his preferred option. His decisions are based on the force of habit, rule of
thumb, or trade tricks. The organizational culture plays a vital role in shaping the administrative
man's decision-making process.

2.The economic man- A major difference between the administrative and economic man is that
the latter is more idealized. The concept assumes that people are rational human beings whose
decisions are based on mathematical analysis. The economic man makes rational decisions
because he considers all criteria and alternatives. He seeks maximum satisfaction and utility.
Notably, the economic man is under no mandate to behave responsibly or morally. He does not
have to appear rational to an outside onlooker. He needs to analyze all possible alternatives and
implement solutions that allow him to achieve specific, pre-determined goals at a minimum cost.
For example, if a taxi driver can earn the same income with an old, second-hand car or a new,
more expensive vehicle, he will opt for the second-hand vehicle even if it means risking
recurrent breakdowns.

Administrative Model Benefits and Drawbacks

The administrative model of decision-making has notable benefits. Some of the benefits of this
approach include;

 The administrative model requires less time to make a decision. Opting for a "good
enough" solution is an efficient, time-saving strategy.
 The approach does not require a lot of resources, which saves on costs. Searching for
ideal solutions is more expensive.

However, the main drawback of this decision-making model is that it compromises the quality of
decisions and solutions because decision-makers consider only a limited number of alternatives.
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Hearbert Simon’s Model of Decision Making

Herbert Simon, the Nobel Prize winning researcher, showed that humans went through three
essential stages in the act of problem solving. He called these the Intelligence, Design, and
Choice stages.

Decision making can also be considered as a type of problem solving. In the first stage, that of
intelligence, they collect information about the issue from the environment and the surrounding
context.
For example, if a person is faced with the problem of traveling from Bangalore to New Delhi, a
distance of about 2000 km, then in the intelligence stage the person will seek all possible
information of how to travel – by air, by train, by bus, or by a personal vehicle. This inquiry is
open-ended and will involve searching for all possible avenues by which the problem can be
solved.
The question addressed at this stageis as follows: What criteria should be used to decide between
the alternative possible solutions to the problem? This question requires the decision maker to
settle on the criteria that are important, and then select or rank-order them. For example, the
choice of cost and time may be the most important criteria for the decision-making process.
At the next stage, that of choice, the criteria are applied to select the best answer from the
available choices. For example, based on the criteria of cost and time available, it may be best to
travel to Delhi from Bangalore by train. The criteria may be weighted and these weights are
applied in a formal manner, often with the help of a mathematical model. Once a solution is
available, the decision maker may be satisfied with the answer or may return to earlier stages to
redo the process.

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At the choice stage, the criteria and parameters for the decision help curtail the amount of search
required to arrive at a decision. If the criteria are not specified sharply then the number of
alternatives to be considered to arrive at a decision may be very large.
This stage may also require returning to the intelligence gathering activity, and then to the design
stage to change or modify the criteria and the weights used to apply them. In his seminal work,
Herbert

DSS are designed to support mainly the choice stage of the decision-making process.
Managers can enter the relevant data into the system, select or prioritise their criteria and let the
system decide on the final solution.

There Are Three Stages Involved In The Decision Making Process:

1.Intelligence Activity Stage

At this stage, people identify the problems in an organization and the upper management
analyzes the organizational environment to work toward a solution.

2.Design Activity Stage

In order to identify possible solutions to problems, the upper management looks for suitable
strategies. They further analyze the merits and demerits to select a particular course of action.

3.Choice Activity Stage

After making a list of alternatives, the choice activity stage begins. It critically examines and
evaluates the various consequences of all alternatives and the most suitable course of action is
selected. This stage requires creativity, judgment and quantitative analysis skills.

Exploring The Types Of Decisions

With respect to organizational decision-making, the Simon Decision Making Theory recognized
two types of decisions:

 Programmed

Programmed decision making involves those decisions that already have a plan or rule in place,
which is used to reach a solution or conclusion. They follow already established guidelines and

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formal patterns. For example, managers have already made such decisions before and it’s a
repetitive and routine process.

 Non-Programmed

Contrary to programmed decision making, non-programmed decisions are ill-structured and one-
time decisions. Problems or situations that don’t have a concrete set of rules or guidelines to
follow rely on non-programmed decision making. These are complex and have long-term impact.

Management Support System (MSS)

Management support systems focus on managerial uses of information resources. These systems
provide information to manage for planning and decision making. The information provided by
these systems is based on both the internal and external data using various data analysis tools.

They also offer a choice to the user to select out of these tools for the purpose of data analysis.
These systems serve the information needs of managers at middle and top levels in the
managerial hierarchy.

There are three types of management support systems, namely:

a) Decision Support Systems,

b) Executive Information (support) Systems and

c) Expert Systems.

1.Decision Support Systems:

Decision support systems (DSS) are interactive software-based systems intended to help
managers in decision-making by accessing large volumes of information generated from various
related information systems involved in organizational business processes, such as office
automation system, transaction processing system, etc.
DSS uses the summary information, exceptions, patterns, and trends using the analytical models.
A decision support system helps in decision-making but does not necessarily give a decision
itself. The decision makers compile useful information from raw data, documents, personal
knowledge, and/or business models to identify and solve problems and make decisions.

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Programmed and Non-programmed Decisions

There are two types of decisions - programmed and non-programmed decisions.

Programmed decisions are basically automated processes, general routine work, where −
 These decisions have been taken several times.
 These decisions follow some guidelines or rules.
For example, selecting a reorder level for inventories, is a programmed decision.
Non-programmed decisions occur in unusual and non-addressed situations, so −
 It would be a new decision.
 There will not be any rules to follow.
 These decisions are made based on the available information.
 These decisions are based on the manger's discretion, instinct, perception and judgment.
For example, investing in a new technology is a non-programmed decision.
Decision support systems generally involve non-programmed decisions. Therefore, there will be
no exact report, content, or format for these systems. Reports are generated on the fly.

Attributes of a DSS

 Adaptability and flexibility

 High level of Interactivity
 Ease of use
 Efficiency and effectiveness
 Complete control by decision-makers
 Ease of development
 Extendibility
 Support for modeling and analysis
 Support for data access

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 Standalone, integrated, and Web-based

Characteristics of a DSS

 Support for decision-makers in semi-structured and unstructured problems.

 Support for managers at various managerial levels, ranging from top executive to line
managers.
 Support for individuals and groups. Less structured problems often requires the
involvement of several individuals from different departments and organization level.
 Support for interdependent or sequential decisions.
 Support for intelligence, design, choice, and implementation.
 Support for variety of decision processes and styles.
 DSSs are adaptive over time.

Benefits of DSS

 Improves efficiency and speed of decision-making activities.

 Increases the control, competitiveness and capability of futuristic decision-making of the
organization.
 Facilitates interpersonal communication.
 Encourages learning or training.
 Since it is mostly used in non-programmed decisions, it reveals new approaches and sets
up new evidences for an unusual decision.
 Helps automate managerial processes.

Components of a DSS

Following are the components of the Decision Support System −

 Database Management System (DBMS) − To solve a problem the necessary data may
come from internal or external database. In an organization, internal data are generated by
a system such as TPS and MIS. External data come from a variety of sources such as
newspapers, online data services, databases (financial, marketing, human resources).
 Model Management System − It stores and accesses models that managers use to make
decisions. Such models are used for designing manufacturing facility, analyzing the
financial health of an organization, forecasting demand of a product or service, etc.
Support Tools − Support tools like online help; pulls down menus, user interfaces,
graphical analysis, error correction mechanism, facilitates the user interactions with the
system.

Classification of DSS

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There are several ways to classify DSS. Hoi Apple and Whinstone classifies DSS as follows −
 Text Oriented DSS − It contains textually represented information that could have a
bearing on decision. It allows documents to be electronically created, revised and viewed
as needed.
 Database Oriented DSS − Database plays a major role here; it contains organized and
highly structured data.
 Spreadsheet Oriented DSS − It contains information in spread sheets that allows create,
view, modify procedural knowledge and also instructs the system to execute self-
contained instructions. The most popular tool is Excel and Lotus 1-2-3.
 Solver Oriented DSS − It is based on a solver, which is an algorithm or procedure
written for performing certain calculations and particular program type.
 Rules Oriented DSS − It follows certain procedures adopted as rules.
 Rules Oriented DSS − Procedures are adopted in rules oriented DSS. Export system is
the example.
 Compound DSS − It is built by using two or more of the five structures explained above.

Types of DSS

Following are some typical DSSs −

 Status Inquiry System − It helps in taking operational, management level, or middle
level management decisions, for example daily schedules of jobs to machines or machines
to operators.
 Data Analysis System − It needs comparative analysis and makes use of formula or an
algorithm, for example cash flow analysis, inventory analysis etc.
 Information Analysis System − In this system data is analyzed and the information
report is generated. For example, sales analysis, accounts receivable systems, market
analysis etc.
 Accounting System − It keeps track of accounting and finance related information, for
example, final account, accounts receivables, accounts payables, etc. that keep track of the
major aspects of the business.
 Model Based System − Simulation models or optimization models used for decision-
making are used infrequently and creates general guidelines for operation or management.

2.Executive Information (support) Systems

Executive support systems are intended to be used by the senior managers directly to provide
support to non-programmed decisions in strategic management.
These information are often external, unstructured and even uncertain. Exact scope and context
of such information is often not known beforehand.

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This information is intelligence based −

 Market intelligence
 Investment intelligence
 Technology intelligence

Examples of Intelligent Information

Following are some examples of intelligent information, which is often the source of an ESS −
 External databases
 Technology reports like patent records etc.
 Technical reports from consultants
 Market reports
 Confidential information about competitors
 Speculative information like market conditions
 Government policies
 Financial reports and information

Features of Executive Information System

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Advantages of ESS

 Easy for upper level executive to use

 Ability to analyze trends
 Augmentation of managers' leadership capabilities
 Enhance personal thinking and decision-making
 Contribution to strategic control flexibility
 Enhance organizational competitiveness in the market place
 Instruments of change
 Increased executive time horizons.
 Better reporting system
 Improved mental model of business executive
 Help improve consensus building and communication
 Improve office automation
 Reduce time for finding information
 Early identification of company performance
 Detail examination of critical success factor

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 Better understanding
 Time management
 Increased communication capacity and quality

Disadvantage of ESS

 Functions are limited

 Hard to quantify benefits
 Executive may encounter information overload
 System may become slow
 Difficult to keep current data
 May lead to less reliable and insecure data
 Excessive cost for small company

3.Expert System
An expert system is a computer program that uses artificial intelligence (AI) technologies to
simulate the judgment and behavior of a human or an organization that has expertise and
experience in a particular field.

Expert systems are usually intended to complement, not replace, human experts.

The concept of expert systems was developed in the 1970s by computer scientist Edward
Feigenbaum, a computer science professor at Stanford University and founder of Stanford's
Knowledge Systems Laboratory. The world was moving from data processing to "knowledge
processing," Feigenbaum said in a 1988 manuscript. That meant computers had the potential to
do more than basic calculations and were capable of solving complex problems thanks to new
processor technology and computer architectures, he explained.

How does an expert system work?

Modern expert knowledge systems use machine learning and artificial intelligence to simulate
the behavior or judgment of domain experts. These systems can improve their performance over
time as they gain more experience, just as humans do.

Expert systems accumulate experience and facts in a knowledge base and integrate them with an
inference or rules engine -- a set of rules for applying the knowledge base to situations provided
to the program.

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The inference engine uses one of two methods for acquiring information from the knowledge
base:

1. Forward chaining reads and processes a set of facts to make a logical prediction about what
will happen next. An example of forward chaining would be making predictions about the
movement of the stock market.
2. Backward chaining reads and processes a set of facts to reach a logical conclusion about
why something happened. An example of backward chaining would be examining a set of
symptoms to reach a medical diagnosis.

An expert system relies on having a good knowledge base. Experts add information to the
knowledge base, and nonexperts use the system to solve complex problems that would usually
require a human expert.

The process of building and maintaining an expert system is called knowledge engineering.
Knowledge engineers ensure that expert systems have all the necessary information to solve a
problem. They use various knowledge representation methodologies, such as symbolic patterns,
to do this. The system's capabilities can be enhanced by expanding the knowledge base or
creating new sets of rules.

What are the components of an expert system?

There are three main components of an expert system:

 The knowledge base. This is where the information the expert system draws upon is stored.
Human experts provide facts about the expert system's particular domain or subject area are
provided that are organized in the knowledge base. The knowledge base often contains a
knowledge acquisition module that enables the system to gather knowledge from external
sources and store it in the knowledge base.
 The inference engine. This part of the system pulls relevant information from the
knowledge base to solve a user's problem. It is a rules-based system that maps known
information from the knowledge base to a set of rules and makes decisions based on those
inputs. Inference engines often include an explanation module that shows users how the
system came to its conclusion.
 The user interface. This is the part of the expert system that end users interact with to get an
answer to their question or problem.

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What are the advantages of expert systems?

Expert systems have several benefits over the use of human experts:

 Accuracy. Expert systems are not prone to human error or emotional influence. They make
decisions based on defined rules and facts.
 Permanence. Human experts eventually leave their role, and a lot of specific knowledge
may go with them. Knowledge-based systems provide a permanent repository for knowledge
and information.
 Logical deduction. Expert systems draw conclusions from existing facts using various types
of rules, such as if-then rules.
 Cost control. Expert systems are relatively inexpensive compared to the cost of employing
human experts. They can help reach decisions more efficiently, which saves time and cuts
costs.
 Multiple experts. Multiple experts contribute to an expert system's knowledge base. This
provides more knowledge to draw from and prevents any one expert from skewing the
decision-making.
What are the challenges of expert systems?
Among expert systems' shortcomings are the following:

 Linear thinking. Expert systems lack true problem-solving ability. One of the advantages of
human intelligence is that it can reason in nonlinear ways and use ancillary information to
draw conclusions.

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 Lack of intuition. Human intuition enables people to use common sense and gut feelings to
solve problems. Machines don't have intuition. And emulating gut-feeling decision-making
using mechanical logic could take much longer than an expert using intrinsic heuristic
knowledge to come to a quick conclusion.
 Lack of emotion. In some cases -- medical diagnoses, for example -- human emotion is
useful and necessary. For example, the disclosure of sensitive medical information to a
patient requires emotional intelligence that an expert system may not have.
 Points of failure. Expert systems are only as good as the quality of their knowledge base. If
they are supplied with inaccurate information, it can compromise their decisions.

Group Decision Support System

A group decision-support system (GDSS) is an interactive computer-based system used to

facilitate the solution of unstructured problems by a set of decision makers working together as a
group (DeSanctis and Gallupe, 1987). Groupware and Web-based tools for videoconferencing
and electronic meetings described earlier in this text can support some group decision processes,
but their focus is primarily on communication. GDSS, however, provide tools and technologies
geared explicitly toward group decision making and were developed in response to a growing
concern over the quality and effectiveness of meetings. The underlying problems in group
decision making have been the explosion of decision-maker meetings, the growing length of
those meetings, and the increased number of attendees. Estimates on the amount of a manager’s
time spent in meetings range from 35 to 70 percent.

COMPONENTS OF GDSS

 Hardware: It includes electronic hardware like the computer, equipment used for networking,
electronic display boards and audiovisual equipment. It also includes the conference facility,
including the physical set up – the room, the tables, and the chairs – laid out in such a manner
that they can support group discussion and teamwork.

 Software Tools: It includes various tools and techniques, such as electronic questionnaires,
electronic brainstorming tools, idea organizers, tools for setting priority, policy formation tool,
etc. The use of these software tools in a group meeting helps the group decision-makers to plan,
organize ideas, gather information, establish priorities, take decisions and document the meeting
proceedings. As a result, meetings become more productive.

 People: It compromises the members participating in the meeting, a trained facilitator who helps
with the proceedings of the meeting, and an expert staff to support the hardware and software.
The GDSS components together provide a favorable environment for carrying out group
meetings.

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Characteristics of a GDSS

A GDSS has a number of unique characteristics to support a group of participants in their

decision-making process:

 Special design to support creative thinking, effective communications and decision-

making techniques
 Easy to use so participants from different backgrounds can all participate effectively
 Flexible so it can incorporate the different perspectives and decision-making styles of the
different participants
 Automated record keeping for future review and analysis
 Parallel communication to allow multiple participants to contribute simultaneously

Group Decision Support System (GDSS) Software Tools

Group decision support system software tools help the decision-makers in organizing their ideas,
gathering required information and setting and ranking priorities. The following are some of
these tools:

 Electronic Questionnaire: The information generated using the questionnaires helps the
organizers of the meeting to identify the issues that need immediate attention, thereby
enabling the organizers to create a meeting plan in advance.

 Electronic Brainstorming Tools: It allows the participants to simultaneously contribute

their ideas on the subject matter of the meeting. As the identity of each participant
remains secret, individuals participate in the meeting without the fear of criticism.

 Idea Organizer: It helps in bringing together, evaluating and categorizing the ideas that
are produced during the brainstorming activity.

 Tools for Setting Priority: It includes a collection of techniques, such as simple voting,
ranking in order and some weighted techniques that are used for voting and setting
priorities in a group meeting.

 Policy Formation Tool: It provides the necessary support for converting the wordings of
policy statements into an agreement.

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Advantages of GDSS :

 Better decision : Through the GDSS we can take better decisions because the under
GDSS the decisions are taken by a group of DSS.
 Solve the problem : GDSS provide solution to unstructured problems. GDSS collects
various type of information at various sources.
 Minimize the risk : GDSS allows managers to assess the risks associated with various
alternatives. This helps managers to be proactive rather than reactive.
 Collect large amount of information : GDSS collect information at various sources for
making decision making. This information minimizes the risk.
 Provide interactive communication : GDSS provide interactive communication. It takes
better decision through the interactive communication.
 Improve the decision making process : GDSS improve the decision making process
because GDSS is a goal oriented. When the GDSS is designed the goal is considered.
 Make coordination in various activities :In GDSS decision are taken by a group of
DSS. The work is divided into different parts then each DSS performs own work. So the
coordination is possible.

Disadvantages of GDSS :

 Cost :A significant amount of cost may be associated with putting up the infrastructure
consisting of the room, network connectivity and the software.
 Security : This risk arises when the facility for setting up GDSS has been rented. There
are chances that information gets leaked to the peers by a low level employee.
 Technical Failure : The system must be properly implemented to reduce the risk
associated with loss of connectivity and power loss. It is highly dependent
on LAN/WAN infrastructure and bandwidth.
 Keyboarding Skills : If the members get frustrated they might participate less.
 Training : There is variation in the learning curve of the user in various situations.

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