Information Processing Model of Executive Decision

Abstract

Company information systems demand a better understanding of the nature of the executive's decision process. Above all his information requirements must be specified. The capacity to specify these requirements is the hallmark of the information-processing model. An example of the form of the simulation of a pricing decision process is presented. The model, a binary flow chart type, simulates the pricing decision in a differentiated oligopolistic market. The validity of the model is established by comparing the two kinds of predictions that it makes—output and process—with reality. A number of problems encountered in developing models of this type are discussed. Some of the broader implications of these models are described and others are briefly mentioned.