Page 74 -

Chapter 2 • Foundations and Technologies for Decision Making 73

Intelligence Phase
Organization objectives
Search and scanning procedures
Reality Simplification Data collection
Assumptions Problem identification
Problem ownership
Problem classification
Problem statement
Problem Statement
Design Phase
Formulate a model
Validation of the model Set criteria for choice
Search for alternatives
Predict and measure outcomes

Success Alternatives
Choice Phase
Verification, testing of Solution to the model
proposed solution Sensitivity analysis
Selection of the best (good)
alternative(s)
Plan for implementation

Implementation
of solution
Failure
figure 2.1 The Decision-Making/Modeling Process.

we view monitoring as the intelligence phase applied to the implementation phase. Simon’s
model is the most concise and yet complete characterization of rational decision making.
A conceptual picture of the decision-making process is shown in Figure 2.1.
There is a continuous flow of activity from intelligence to design to choice (see the
bold lines in Figure 2.1), but at any phase, there may be a return to a previous phase
(feedback). Modeling is an essential part of this process. The seemingly chaotic nature of
following a haphazard path from problem discovery to solution via decision making can
be explained by these feedback loops.
The decision-making process starts with the intelligence phase; in this phase, the
decision maker examines reality and identifies and defines the problem. Problem ownership
is established as well. In the design phase, a model that represents the system is constructed.
This is done by making assumptions that simplify reality and writing down the relationships
among all the variables. The model is then validated, and criteria are determined in a princi-
ple of choice for evaluation of the alternative courses of action that are identified. Often, the
process of model development identifies alternative solutions and vice versa.
The choice phase includes selection of a proposed solution to the model (not
necessarily to the problem it represents). This solution is tested to determine its viability.
When the proposed solution seems reasonable, we are ready for the last phase: imple-
mentation of the decision (not necessarily of a system). Successful implementation results
in solving the real problem. Failure leads to a return to an earlier phase of the process. In
fact, we can return to an earlier phase during any of the latter three phases. The decision-
making situations described in the opening vignette follow Simon’s four-phase model, as
do almost all other decision-making situations. Web impacts on the four phases, and vice
versa, are shown in Table 2.1.

M02_SHAR9209_10_PIE_C02.indd 73 1/25/14 7:45 AM