The Role of Data Mining in Organizational Cognition

The Role of Data Mining in Organizational Cognition

Chandra S. Amaravadi (Western Illinois University, USA) and Farhad Daneshgar (University of New South Wales, Australia)
DOI: 10.4018/978-1-59904-951-9.ch138
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Data mining has quickly emerged as a tool that can allow organizations to exploit their information assets. In this chapter, we suggest how this tool can be used to support strategic decision-making. Starting with an interpretive perspective of strategy formulation, we discuss the role of beliefs in the decision-making process. Referred to as Micro-Theories (MTs), these beliefs generally concern some assumption regarding the organization’s task environment, such as sales increasing in a certain segment or customers preferring a certain product. The strategic role for data mining, referred to as Organizational Data Mining (ODM) is then to provide validation for these beliefs. We suggest a four-step process for identifying and verifying MTs and illustrate this with a hypothetical example of a bank. Implications and future trends in ODM are discussed. Ultimately results of data mining should be integrated with strategic support systems and knowledge management systems.

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