I.T.F.M. Learning Outcome 1

1. I.T.F.M.Learning Outcome 1 Explain the role of information in decision making

2. Nature of Information • Data = raw facts and figures which have been collected but have not been processed • Information = data which has been processed into a form which helps make a decision

3. Nature of Information Quantitative: • Easily counted or measured, is definable • Factual, often in number form • Eg. Sales figures, salary costs Qualitative: • Descriptive information • Concerned with opinions, attitudes and judgments • Describe something as ‘poor’, ‘good’ etc • Attitude towards firm’s new dress code

4. Nature of Information Primary: • Gathered first-hand for specific purpose • New information collected through opinion polls, interviews, surveys, questionnaires Secondary: • Already exists – gathered in the past • Gathered for one purpose and re-used for another • Check before collecting primary • Government statistics, Internet, journals

5. Nature of Information External: • Obtained from outwith the organisation • Trade journals, newspaper articles Internal: • Gathered from the organisation’s own internal records • Concerned with happenings within the firm • Employee records, department costs, sales reports, HR databases

6. Role and Importance of Information • Information and Communications Technology (ICT) is the collecting, processing and transmitting of information by electronic means • Collecting: Internet, fax, voicemail • Processing: WP, SS, DB, DTP

7. Advantages of use of ICT • Increase in volume of information which can be dealt with • Increase in speed which information can be dealt with • Increase in employee productivity • Improve quality of output of information • Increase employees’ motivation • Opportunities to standardise processes • Flexibility in the use of equipment

8. Sources of Information Electronic: • Accessed quickly, printed as required • Queried and manipulated • PC files, CD-ROM, Internet, Teletext Paper-based: • Printed form (internal or external) • Phone book, yellow pages, road maps • AA/RAC handbook, timetables, Thesaurus

9. Sources of Information Oral: • Passed by word of mouth • Accurate record should be kept • Meetings, interviews, visits Internal: • Obtained from organisation’s own records • Personnel records, payroll records, reports

10. Sources of Information External: • Obtained from outwith the organisation • Required when comparing the performance against other similar businesses • Government reports, Internet, market research, catalogues • **Sources of Information Handout**

11. Sources of Information Telecommunications: • Phone book, yellow pages, business pages Travel: • AA/RAC handbook, A-Z Guides Famous People: • Who’s Who/Who Was Who Miscellaneuos: • Hansard, Mailguide

12. Electronic Sources of Information CD-ROM’s • Specific searches at high speed • Some information may become out of date • F&S Index: companies and products • Hansard: parliamentary debates

13. Electronic Sources of Information Internet: • Fast up-to-date information • May be on a subscription basis • Travel,exchange rates,accommodation • Weather, media, sports, business

14. Features of Good Information Accurate: • Inaccurate information may be worse than none at all • Should contain no errors • Provide basis on which to make decisions Up-to-Date: • Latest should be available • Assist when decision making

15. Features of Good Information Relevant: • Irrelevant information may delay or confuse decision taking Sufficient: • Comprehensive and complete but sufficient Appropriate: • Format that is easily useable • Must not be misleading

16. Features of Good Information Available: • At the time required • Delays in accessing information could delay decision taking • May miss opportunities or take wrong decision Cost effective: • Should not be costly to obtain • Depend upon type and level of decision

17. Decision Making • Choosing between 2 or more alternative courses of action • Short-term: how to spend leisure time (low risk) • Medium-term: how your bedroom is decorated • Long-term: deciding on a course of study (high risk)

18. Management decision making • Short-term decision: taken daily • Long-term decision: less frequent • Long term decisions affect the business over a number of years Small businesses: • One person may make all the decisions • Therefore, takes on all the risks

19. Management decision making Long term decision: • Strategic • Taken by Directors, Chief Executive Medium term: • Tactical • Middle management, senior staff Short term: • Operational • Lower management, supervisors

20. Strategic (Long term) • Taken by top management • Sets aims and objectives of organisation • Production of policies giving organisation overall direction, purpose • Gives a competitive edge • High risk decisions • Difficult and costly to reverse • Affect firm over a long term

21. Strategic (Long term) • Whether to expand the market for the firm’s products • Whether to install networks within the firm • Whether to take over a rival firm • Whether to introduce new organisational structure

22. Tactical (Medium Term) • Taken by senior departmental managers • Putting strategic decisions into action • Use resources to achieve aims and objectives • Medium risk affect firm over six months to one year period

23. Tactical (Medium Term) • Whether to introduce new working arrangements • Whether to change stock levels • Whether to extend flexitime to office staff • Whether to change layout of office

24. Operational (Short Term) • Taken by junior management staff • Day-to-day decisions • Ensures standards and targets are met • Detail of tactical decisions • Affect organisation over a few days to a few months • Usually carried a low level risk • Rectified quickly at little cost • Eg. How to organise leave arrangements

25. Operational Decisions taken by an Admin Assistant • How much stock of paper to hold in the office • How to organise staff holiday rota • Whether to reorganise filing system • Whether to introduce new procedure for dealing with urgent mail