» Theory and Philosophy

Warning: gzinflate() [function.gzinflate]: data error in /home/totalq/public_html/wp-includes/http.php on line 1787

In order to examine the necessity, effectiveness and efficiency of business intelligence, one has to define it in its most basic terms as well as determine the necessity of it. Generally speaking, business intelligence is mostly referred to the materialization of tools in order to support proper decision making which may include informational technology, customer data as well as industry standards. The main concept in business intelligence or BI is simply enabling the best possible decision making in order to improve on business practices as well as profitability. Essentially BI should result in effectiveness and efficiency by preparing and enabling the most obvious, viable and effective decision. As previously mentioned, it is obvious that BI can and is a part of large business; however, the small and midsize business may not have the same ability or desire to use BI.

First and most importantly, one should determine the necessity of implementing and using BI in small and mid size business. Small and mid size businesses have comparatively rather limited resources in terms of funding, human capital, material and market shares. Hence it becomes even more important to be more effective in product development, production, marketing, advertising and sales in order to grow market shares as well as increase competitiveness and profitability. That is where BI becomes even more important; by allowing for collection of data and analyses, the given organization may be enabled to pursue more effective modes of operation which in turn are meant to steer the company toward more competitive standing in terms of effectiveness and efficiency.

Secondly, it is important to explore the ability of small and mid size business to take advantage of BI by effectively and efficiently implementing it. One of the most significant factors is the nature of cost and available resources. In general terms, the limitations of resources may be the greatest burden to overcome, however, the smaller organizations may have alternatives. Historically large external service providers such as IBM, GeoVu and HP have provided a wide range of BI services to large business. Those services range from design, planning, hardware, and software. Though most of even those large service providers offer solutions for small and mid size businesses, it is expensive and may require internal resources that may prevent those organizations from using those external services. For instance, the cost could depend on factors such as the required hardware and software as well as quantity of users.

Consequently it is important to determine the alternatives and choices of small and mid size businesses to utilize BI in an appropriate manner. Two of the rather common software applications that have been used in small and mid size businesses are File Maker Pro and Microsoft Access.

File Maker is produced by File Maker Inc. In essence, File Maker software allows for organizational data collection by enabling the user to take advantage of database driven data collection, storage and access. File Maker allows the user to design specific databases for individual projects which in terms allow for data collection and analysis. File Maker inc. offers several versions including packages for individuals, academia, non profits, government and small businesses. Essentially this particular software is designed to make data collection and data sharing universal, real time, as well as available to all key personnel.

Similarly, Microsoft Office Access is designed to enable the end user to take advantage of database and its valuable impact on data collection and data analysis. Similarly to File Maker products, there are several versions including standalone MS Access as well as the combination of all MS office suite, with different licensing agreements depending on end users.

The main difference between Microsoft Office Access and File Maker products is within their cross functionality and market shares. Microsoft Access is cross compatible with a wide range of Microsoft Office products such as MS Word, Excel, Outlook, and Power Point, which are all very popular and commonly used in business, government, non profits and academia. Another rather not obvious but important advantage of MS is its existence in Academia: most universities and higher education institutions either use of recommend using MS software due to price advantages as well hardware availability on campuses. This naturally leads to generation after generation of college graduates that are virtually proficient in using MS products hence resulting in reduced costs of training for employers which in turns creates greater market shares.

On the other hand, there maybe advantage to using File Maker products. The manufacturer argues that its products are superior to MS Access because of its better security features, improved macros and queries, better graphic user interface (GUI), and most importantly the self explaining nature of its products.
Both software are available on Windows and Mac platform and cost less than $200 for basic versions, whereby per user licensing may increase the cost. Additional cost may depend on additional components such as server space, script ad on as well as individualize programming.

Moreover it is important to explore as to how such software can have practical application in every aspects of small business. There are several general ways in which such software can be significant.

First and foremost, database driven application allow for individualization of data collection. For instance in Microsoft Access, the user can chose from many options such as how to name each field in tables, format in which data are saved or retrieved, report format and details, specific queries, individual modules and end result output. Such customization and/or need based designed may have several impacts, including creation of expertise, experimental design to improve decision making, and flexibility to change at will without delays or reliance on third party.

Secondly, the availability of such detailed reports and information creates a robust mode of inter organizational communication by providing the same quality and quantity of information to all stakeholders and participants. For instance, departmental decision makers have uniform data which can be their base of decisions as well as their ability to cross organize departmental and/or individual internal and external efforts.

Thirdly, since all the stakeholders and participant have the same information, the decision making process becomes more transparent which in turn may positively impact the decision making process as well as cross coordination among different divisions and decision makers. Similarly, uniform data availability may impact the customer service aspect of business by allowing the decision makers to provide continuous and uniform service based on constant information.

Fourth, uniform data availability will create a viable platform for performance measurement: data availability may enable the decision makers to mine and examine the results of departmental and/or individual contribution/s and performance/s which in turn will enable the decision makers to have the quantitative platform for fair and viable performance evaluation. For instance, budget projections can be judged retrospectively based on their accuracy and viability which in turn may enable the appraisal of management and/or all participants in compiling budget projections. 

Fifth, business intelligence and use of appropriate software such as MS Access or File Maker Pro may create a more effective mode of communication and decision making among small businesses and their respective vendors. For instance, it may enable the sma

Tweet This Post 

Warning: gzinflate() [function.gzinflate]: data error in /home/totalq/public_html/wp-includes/http.php on line 1787

PLC or Product Life Cycle refers to traditional stages in which a product / services are integrated into market. Those traditional stages include: introduction, growth, maturity, and decline. PLC in general illustrates a traditional theory which may not hold for long because of the change in business environment: considering the current trend in globalization and the ever changing dynamic market, it is a logical assumption that those traditional theories may be in decline. Consider the following: in a business environment where internet technology dominates other vehicles of advertising and marketing, it is hard to quantify cycles that are either overlapping or non existence. For instance, eCommerce dictates a dynamic approach in which products are introduced and experience rapid growth and maturity within a very short period of time. Further, the overlapping of introduction and maturity makes it even harder to distinguish cycles.Personally, I believe that PLC theory is one of those propositions that may hold theoretical values, yet not adaptable to the flexible and ever changing business environment; especially in terms of small business.

Brought to you by World Consulting Solution Your one stop firm for all your consulting needs.

Tweet This Post 

Warning: gzinflate() [function.gzinflate]: data error in /home/totalq/public_html/wp-includes/http.php on line 1787

Background and Introduction

Decisions are made everyday, and it is described as intelligently processing information that will result in rational decision making. A manager undertakes the responsibility of making rational choices by being logical and consistent in a decisive manner. Assessments of descriptive, normative, and behavioral decision theories will be the theoretical foundation of this paper. Also, the three different theories will be discussed in relation to teamwork, diversity, and the ethics of organization.

Main Conclusions

The theories examined in this paper illustrate three different types of decision making; each of them influences the process of decision making in an organization differently. The descriptive decision theory concentrates on the immediate solutions, while the normative decision theory has an idealistic standpoint – opposites of extreme. The behavioral decision making theory acts as a middle-man where its main purpose is to be the mediator between the descriptive and normative decision theory. In spite of their differences, all three theories share one common feature: rational decision in any give circumstances.

Recommendations

In order to run a successful organization, management has to understand the different theories behind decision-making process. Even though the theories are bounded by rationality, each theory values teamwork, diversity, and ethics at different levels. Thus, different levels of managements use different types of decision making process for the survival of the company. It is important to clearly distinguish the theories’ boundaries and limitations to successfully decide which variables are important at each level of an organization.

Decision-making

Decision making is not specifically reserved for the management; is done daily by everyone. From choosing home appliances to family dinner preparations, decision making is a part of everybody’s daily routine. To better comprehend the managements’ role of decision making in an organization, three theories of decision making will be discussed: descriptive, normative, and behavioral theory. However, for the purpose of easy comparison and contrasts, the theories will be analyzed in relations to management types: i.e. technical mangers, organization managers and institutional managers.

Background:

Decision making is more than randomly choosing an option, but a cognitive process or a thought-out process to achieve rational decisions. Individuals, from all levels of an organization make decisions. Not all decisions are multifaceted, but their decisions affect their job securities as well as the organization’s interest. A successful decision making process involves rationally analyzing the problems to achieve the most efficient choice that will compliment the situation. According to Walls “the premise behind rationality in organizations is based on the notion that reasonable people will respond to their environment by assessing known facts, estimating possible outcomes, and weighing those outcomes against their respective costs Decision making process differ from one level of management to another, however, they all share common responsibility; rational choices that are consistent, and “value-maximizing choice within specified constraints

Descriptive Theory

The descriptive or positive theory is a black-and-white concept where individuals visualize how things are rather than how things should to be. Descriptive theory focuses on the choices made in a situation, and considers decision as a single event  According to Shrode & Brown, the “descriptive decision theory is based on describing, as precisely as possible, the actual decision-making behavior of the decision-maker” and “how people…make decisions”. In a relation to management type, descriptive theory is associated with the technical managers, where their primary concern is to solve problems immediately and “have a short-run time horizon” Computational decision making strategies utilized by the technical managers allow them to solve problems swiftly and effectively since the solution to problems are accomplished by “computing various types of input and output data, and then manipulating the data in accordance with the criteria of rationality” According to Petit, solutions to technical managers problems are “quantitative in nature” and “concerned with concrete problems that require immediate solutions”

Normative Theory:

The normative theory, also called prescriptive theory, narrates how things should be, and lean towards philosophical approach in decision making. This particular theory utilizes well informed and rational individuals to organize alternatives that will lead to a successful end result that will benefit the organization in the long run. The normative theory carries ethical responsibilities as well as guidelines to seek optimum solutions. Thus, the normative theory “attempt to describe the behavior (or hoped for behavior) of a human decision maker…who wished to use intellectual tools to make decisions”. In relations to management type, normative is closely linked with institutional managers (IM) because they “have a philosophic point of view” and “rely in wisdom, experience, and philosophic insight in making important decision.” Decision strategy for institutional managers’ are judgmental because IM “have a long-run time horizon…The future is always hard to read and is highly qualitative: therefore it is interpreted subjectively.” Institutional Mangers’ primary responsibility to the firm is to insure firm’s survival by managing uncertainties of firm’s environment.

Behavioral theory

Behavioral theory implicates how people deal with uncertainties, and takes into an account both the descriptive and normative theories. Behavioral decision theory is bounded by rationality of the world, and the decisions are made based upon decision-maker’s perception on given situation. According to Brooks, Highhouse, et al, “behavioral decision…has shown that people’s judgment do not always derive from their underlying beliefs, but rather from the need to formulate their opinions as a result of having to express them.” According to Petit “behavioral theory of management has most in common with the social system school…social system school focuses on the organization and what we have called the organization level of management” The organizational managers synchronize technical and institutional managers’ transactions by acting as the mediator or an intermediary. Thus, the decision-making strategy of an organizational manager is to compromise in the interest of organizational viability.

Theories in relevance to teamwork, diversity, and ethics

Depending on the level of management or the structure of organization, variables such as teamwork, diversity, and ethical factors might illustrate an issue. It can increase the complexity of management’s decision-making issues. However, incorporating the variables into different management decision-making can increase open-line of communication, generate additional alternatives and ideas, and increase accuracy.

The descriptive decision theory focuses on immediate resolution of problem with little or no concerns to ethical issues, teamwork, and diversity. This is mainly due to the fact that the speed and the efficiency of decision-makings are valued rather than comprehension of knowledge and ideas. Descriptive theory is “concerned with the choices actuall

Tweet This Post 

Warning: gzinflate() [function.gzinflate]: data error in /home/totalq/public_html/wp-includes/http.php on line 1787

Managerial ethics illustrate a rather sensitive issue. The recent business history has proven ethics as a rather challenging objective of larger organizations. The following topics / views may illustrate fundamental issues in the current debate. The current competing views include “Maximize Profit” and “society’s welfare” . Maximizing profits illustrate the greatest commitment to shareholder and stakeholders. In this particular theory, the managerial staff is only committed to maximize the bottom-line in terms of profit: a mean to an end in order to achieve the highest possible profits. Society’s welfare illustrates a common goods approach. In this particular approach managerial staff attempts to achieve a balance between the bottom-line and social welfare of the society and employees. It is of great interest to explore the theoretical aspects of managerial issues and compare them to real practices. The two above name theories assume that managerial issues are constrained and objective; stakeholders vs. society. On the other hand, the reality proves a rather multi dimensional reality; stakeholders vs. society vs. culture vs. religion vs. politics vs. diversity vs. personality vs. globalization vs. many other unpredictable factors. Further, both of theories appear to be better suited for larger organizations: small businesses encounter more immediate issues such as revenue and cash flow rather than managerial ethics. Most small businesses ran by savvy business people are less concerned about ethics. Out of extensive experience in consulting small businesses, I can confidentially stat that I have never met a small business owner that was not willing to take unethical actions in order to maximize profits. Given the fact that this is not a scientific statement, it is important to view this statement in terms of personal experiences, which conflicts with the academic management practices.Moreover, there is more to the issue of ethics. Given the fact that both competing theories consider some sort of managerial responsibility to some one or some group, illustrates a major weakness of both theories. Both theories fail to point to the necessity of “perception”. It is hypocritical to expect only one segment of a society i.e. businesses to create value or consider societal consequences. Thus, most business simply attempt to create a perception of societal responsibilities rather than genuine concerns In terms of creating profits, it is important to understand that in practical terms, it is difficult to create social awareness or consider social issues without being able to prove their value to the business shareholder or stakeholder. Thus, any managers’ first priority should be profits, Once the objective of achieving the highest possible profits have been achieved, an organization can effort to pursue alternate goals of societal concerns and improvement.Some people may argue that societal benefits / concerns may have a direct influence on the bottom line of any given business. However, it is important to point to the fact that it is extremely difficult to quantify the direct impact of societal charity work on corporate profits. It is merely possible to use anecdotal and qualitative data in order to assign arbitrary real value to such social actions. Ultimately, it is important to consider the main goal of any given company i.e. profits. It is further important to allow for businesses to pursue and achieve their goals before they can be expected to become beneficial corporate citizens.

Tweet This Post 

Warning: gzinflate() [function.gzinflate]: data error in /home/totalq/public_html/wp-includes/http.php on line 1787

The first and most important aspect to me is the “If it works, use it” concept. I strongly believe that there are only legal limits which may hinder a business to do whatever it takes to succeed. Otherwise, moral considerations should be put aside to create platforms and procedures to maximize profitability. I believe that moral consideration is a question of “affordability”: those organizations that have reached the maximum profitability can effort to have moral standards. Otherwise, it is a fair game as long as no law is broken.

The second significant factor is the adaptability factor in self monitoring: “Individuals high in self-monitoring show considerable adaptability in adjusting their behavior”. I am convinced that those with conscious self monitoring factor realize the need for “whatever it takes” concept to achieve the greatest results for their organization. It is clear that such individuals realize that in a competitive work environment it is vital to adapt to all existing factors in order to create a greater sense of personal involvement, thus promoting organization goals.

The third important personality factor is risk taking: “To maximize organizational effectiveness, managers should try to align employee risk-taking propensity with specific job demands”. It clearly ties in to the previous concepts of Mach and adaptability: a manger will eventually have to realize that risk taking is simply a part of everyday business life. The best decisions can not always be made with complete information, rather than specific uncertainties will always be present. Thus a good manager will be willing to assess a situation and make a decision with the understanding of relative risk.

Ultimately, it is clear to me that a successful manger will have the ability to do what it takes by adapting to all existing factors with consideration of certain degree of risk. I believe that such characteristics are rather universal and independent from industry, market and economy fluctuations. Yet cultural and social factors may dramatically change the overall effectiveness of such approach.

http://www.worldconsultinggroup.com/
http://consultancyissues.blogspot.com/

 

 

Tweet This Post