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The Nature of Information

The Nature of Information. Information vs ‘Risk’ : More information, less risk in decision making (Microsoft software improvement through information gathering) Less information, more risk in decision making

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The Nature of Information

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  1. The Nature of Information Informationvs‘Risk’: • More information, less risk in decision making (Microsoft software improvement through information gathering) • Less information, more risk in decision making • Impossible to have all information available at times so managers and employees have to use past experience as a guide.

  2. Information Rules • Information rule – emerges when business research confirms that the same result occurs each time a particular event happens.(discounted prices = sold cars) • These rules shorten the time it takes to analyze business decisions. • Consumers use the same practice to make buying decisions. (shorten choice by selecting only certain brand names, warranty and price range)

  3. Data vs Information • Dataare numerical or verbal descriptions that usually result from some sort of measurement. • Informationis data presented in a form that is useful for a specific purpose. • Databaseis a single collection of data stored in one place that can be used by people throughout the organization to make decisions. Review Figure 17.2, page 502

  4. The Information System • Management Information System [MIS] is a system that provides managers and employees with information they need to perform their jobs as effectively as possible. • Overseen by anInformation Technology Officer – an executive-level manager responsible for ensuring the firm has the necessary equipment (and training) to provide information to all employees to make efficient and effective decisions. Review Figure 17.3, page 506

  5. The Information System. . . (continued) • Managers’ Information Requirements: • Financial Managers – need info on firm’s payables/receivables, cash flow, future capital needs, financial statements, state of the economy, interest rates, predictions of future business, etc. • Operations Managers – present and future sales levels, inventory levels of work in process and finished goods, availability and cost of resources needed to produce products/services, new product planning, new technology, etc.

  6. The Information System. . . (continued) • Marketing Managers – prices and pricing strategies, new promotional campaigns, competitors’ products being test-marketed, target markets, current and projected market share, new/pending product legislation, distribution channel developments, etc. • HR Managers – current wage levels, benefits packages inside/outside firm, current legislation and court decisions affecting employment, union activities, firm’s plans for growth (expansions or mergers), etc.

  7. The Information System. . . (continued) • Administrative Managers: • Must ensure all employees have access to the information they need to do their jobs. • Must ensure that the information is used in a consistent manner throughout the firm. • Must ensure that all managers and employees are able to use the information technology that is available (i.e., proper training). • Must ensure MIS is updated and any additional training is made available when necessary.

  8. Size/Complexity of the MIS • Must meet the present needs of the firm, but have the capacity to be upgraded as the firm grows. • Must not be too difficult to use by the users (employees). • Some organizations use outside software to manage their information needs such as PeopleSoft and Oracle.

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