Question

1. Why an effective information system must be a biased system? Explain.

2. Describe the business perspective on information systems.

Answer 1

1.Information systems and in particular decision support systems have been developed to supplement human information processing and to assist with decision-making. Human decision-making is facilitated by the often unconscious use of heuristics in situations where it may not be possible or feasible to search for the best decision. Judgemental heuristics have previously been found to lead to biases in decision-making. When information systems are used as decision aids, they may have an influence on biases. This study investigates the role of information systems in introducing, reinforcing or reducing biases. It was found that information systems have the ability to introduce new biases and to reinforce biases. Information systems can also reduce biases, but this requires innovative thinking on the way information is represented and the way human decision-making processes are supported. It was also found that in the real world, as opposed to the laboratories where biases are usually measured, other constraints on rational decision-making, such as politics or data errors, can overshadow the effects of biases.

2.From a business perspective, an information system is an important instrument for creating value for the firm. Information systems enable the firm to increase its revenue or decrease its costs by providing information that helps managers make better decisions or that improves the execution of business processes.