Chapter Seventeen Acquiring, Organizing, and Using Information

Chapter Seventeen

Acquiring, Organizing, and Using

Information

Copyright © Houghton Mifflin Company. All rights reserved. 17 | 2

Learning Objectives

1. Examine how information can reduce risk when making a decision.

2. Discuss management’s information requirements.

3. Outline the five functions of an information system.

4. Explain how different research methods can be used to obtain information.


Learning Objectives (cont’d)

6. Analyze how computers and technology change the way information is acquired, organized, and used.

7. Discuss how the Internet helps employees communicate, assists a firm’s sales force, trains and recruits employees, and tracks employee expenses

8. Understand how software can be used to collect and distribute information.


How Information Reduces Risk

• Information produces knowledge and empowers managers and employees to make better decisions

• The relationship between information and risk


How Information Reduces Risk (cont’d)

• Information rules– Information rules based on

situational experience provide guidance in handling similar situations or circumstances

– Business research continuously looks for new rules since business conditions are always changing


How Information Reduces Rick (cont’d)

• The difference between data and information– Data

• Numerical or verbal descriptions that usually result from some sort of measurement

– Information• Data presented in a form that is

useful for a specific purpose– Database

• A single collection of data stored in one place that can be used by people throughout an organization to make decisions


Data Versus Information


Data Versus Information (cont’d)


The Information System

• Management information system (MIS)– A system that provides managers with

the information they need to perform their jobs as effectively as possible

– Purpose: to distribute timely and useful information to the decision makers who need it

• Information technology officer– A manager at the executive level who

is responsible for ensuring that a firm has the equipment necessary to provide the information the firm’s employees and managers need to make effective decisions


The Information System (cont’d)

• Managers’ information requirements– Summary of future possibilities– Summary of present situation– Summary of past performance– Information about 5 principal areas

of management: finance, operations, marketing, human resources, and administration

• Size and complexity of the system– Must be properly sized to provide

sufficient information resources without being simple or too complex to be useful


Management Information System (MIS)

Source: Management, 8th ed., by Ricky W. Griffin. Copyright © 2005 by Houghton Mifflin Company. Adapted with permission.


Five Management Information System Functions


How Employees Use an MIS

• Collecting data– Data should be relevant and accurate– Internal sources

• Managers and employees, company records and reports, minutes of meetings, accounting data, sales data, HR data, production data

– External sources• Customers, suppliers, bankers, trade and

financial publications, industry conferences, online computer services, firms specializing in gathering data

– Cautions• The cost of obtaining data from external sources

should be weighed against the benefits• Check data, especially computerized data, for

accuracy• Outdated data are likely to yield inaccurate

information


How Employees Use an MIS (cont’d)

• Storing data– An MIS must be capable of storing data until they are

needed• Updating data

– Manual updating—employee inputs fresh data into the database

– Automatic updating— MIS updates itself as data become available


Functions of an MIS (cont’d)

• Processing data– The transformation of data into a form useful for a

specific purpose– Statistics

• A measure that summarizes a particular characteristic of an entire group of numbers

• Frequency distribution—a listing of the number of times each value appears in a set of data

• Arithmetic mean—the sum of all the values of a data set divided by the number of items in the data set

• Median—the value at the exact middle of a set of data when the data are arranged in order

• Mode—the value that appears most frequently in a set of data

• Range—the difference between the highest and lowest value in a set of data


Statistics

• Frequency of $3,500 = 2• Arithmetic mean = $2,681.82• Median = $2,800• Mode = $3,000• Range = $1,700


How Employees Use an MIS (cont’d)

• Presenting information– Verbal information—list or

paragraph form• A formal report typically includes

an introduction, the body of the report, conclusions, and recommendations

– Visual displays• Graphs, bar charts, pie charts

– Tabular displays• Verbal or numerical information

presented in columns and rows


Typical Visual Displays Used in Business Presentations


Typical Visual Displays Used in Business Presentations (cont’d)


Typical Three-Column Table


Using Business Research

• Qualitative research– Involves the descriptive or subjective reporting

of information discovered by the researcher

• Quantitative research– Involves the collection of numerical data for

analysis through a survey, experiment, or content analysis


Methods Used by Researchers


Which Research Method to Choose

• Decision factors– Limitations on time and

money

– The need for accuracy and validity

• Managers rely on the results of proven methods until those methods no longer work well


Using Computers and the Internet

• Information society– A society in which large groups of employees generate

or depend on information to perform their jobs

• The Internet, the Intranet, and Networks– Internet

• A worldwide network of computers linked through telecommunications; used for e-business, communication, information gathering

– Intranet• A smaller version of the Internet for use only within a firm

– Networks• A group of two or more computers linked together to

share data and information


Using Computers and the Internet (cont’d)

• WAN (Wide-area network)– A network that connects computers over a

large geographic area

– World’s most popular WAN is the Internet

• LAN (Local-area network)– A network that connects computers that are in

close proximity


Information Sources


Insert Table 17.3 (second half)

Information Sources (cont’d)


Using Computers and the Internet (cont’d)

• Accessing the Internet– Standardization guidelines let

products, services, materials, and processes achieve their purposes

– Website addresses• URL —Uniform Resource

Locator • http—HyperText Transfer

Protocol– Web search engines

• www.altavista.com; www.google.com; www.yahoo.com

• Software for creating web pages– Developing a website– Hosting a website


Tips for Website Development

• Develop a theme• Determine how much information to include

on your site• Plan the layout of your site• Add graphics• Outline the material for each page• Develop plans to update the site• Make sure your site is easy to use


Improving Productivity with Computers

• Helping employees communicate– E-mail—provides virtually instantaneous

communication

– Groupware—software that facilitates the management of large projects among geographically dispersed employees as well as such group activities as problem solving and brainstorming

– Collaborative learning system—a work environment that allows problem-solving participation by all team members

• Assisting the firm’s sales force– Customer-relationship management programs

– Sales force automation programs


Improving Productivity (cont’d)

• Training employees– Reduced educational and training

costs– Increased flexibility and availability

of training– Faster transfer of information about

changes in the firm’s policies and procedures

• Recruiting employees– Provides for a global recruiting

reach, especially for individuals with unique skills

– Helps build a database of potential employees

– Reduces recruiting costs for initial applications and screening interviews


Improving Productivity (cont’d)

• Tracking employee expenses– Employees can input their expenses for

reimbursement through software programs that process employee expense reports


Business Applications Software

• Integrated software combines many functions in one package– Database management– Graphics– Spreadsheets– Word processing– Desktop publishing– Accounting– Computer-aided design (CAD)– Computer-aided manufacturing

(CAM)– Computer-integrated manufacturing

(CIM)

Documents

Chapter Seventeen Acquiring, Organizing, and Using Information