Ch.8 - Information Technology and Control

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University of Fraser Valley
Business Administration
BUS 304
Liz Wiebe

Chapter 8 Information Technology and ControlInformation Technology EvolutionEssential for organizationsManagers spend at least 80 of time actively exchanging informationProblems and information differ depending on place in organizationoFirstline management focuses on welldefined problems operational issues and past eventsoTop management focuses on ambiguous issues strategy and planningTransaction processing systems TPS are automation of the organizations routine daytoday business transactions and its goal is to reduce labour costs and make the system more efficientData warehousing is the use of a huge database that combines all of an organizations data and allows users to access the data directly create reports and obtain answers to whatif questionsBusiness intelligence refers to the hightech analysis of a companys data in order to make better decisions Also known as data mining it allows for data analysis from multiple sources inside and outside of the organization to identify patterns and relationshipsInformation for Decision Making and ControlOrganizational DecisionMaking SystemsManagement information system MISoComputerbased system that provides information and support for rapid and efficient managerial decision makingInformation reporting systemoMost common form of MIS and are computerized systems that provide managers with reports that summarize data and support daytoday decision makingExecutive information system EISoA higherlevel application that facilitates decision making at the highest levels of management that are based on software that convert large amounts of complex data into pertinent information and provide that info to top managers quicklyDecision support system DSSoEnables managers at all levels to retrieve manipulate and display info from integrated databases for making decisions and they can test multiple alternatives and choose the one with the best outcomeFeedback Control ModelA control cycle that involves setting goals establishing standards of performance measuring actual performance and comparing it to standards and changing activities as needed based on the feedbackThis model explains why McDonalds for example started introducing healthier items on their menu2 types are management control systems and balanced scorecardManagement Control SystemsThe formalized routines reports and procedures that use info to maintain or alter patterns in organizational activityTargets are set in advance outcomes are compared to the targets and differences reported to managers for corrective action Many organizations use executive dashboards which enable managers to see at a glance key control indicators such as sales in relation to targets number of products on backorder or percentage of customer service calls resolved within a specified time period4 elements of management control systems includeoBudget financial reportsControls financial resources and reduces uncertainty about availability of resourcesoStatistical reports
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