GMS200 Chapter 7 Notes
1. How is information technology changing the workplace?
2. What is the role of information in the management process?
3. How do managers use information to make decisions?
4. What are the steps in the decision-making process?
5. What are the current issues in managerial decision making?
Study Question #1’s Answer
• Information and knowledge – basic linkages
o Knowledge and knowledge workers provide a decisive competitive factor
in today’s economy
o Knowledge worker
Someone whose value to the organization rests with intellect, not
• Electronic commerce
o The process of buying and selling goods and services electronically
through the use of the internet
B2C e-commerce (business to customer)
B2B e-commerce (business to business)
Stages of development in e-commerce:
• Secure an online identity
• Establish a Web presence
• Enable e-commerce
• Provide e-commerce and customer relationship
management • Utilize a service application model
Implications of IT within organizations
o Facilitation of communication and information sharing
o Operating with fewer middle managers
o Flattening of organizational structures
o Faster decision making
o Increased coordination and control
How IT is changing the office:
o Progressive organizations actively use IT to help achieve high
Study Question #2’s answer
What is useful information?
Raw facts and observations
Data made useful for decision making
o Information drives management functions.
o Characteristics of useful information:
Information needs of organizations
o Information exchanges with the external environment:
Gather intelligent information
Provide public information
o Information exchanges within the organization:
Facilitate decision making
Facilitate problem solving
Basic information system concepts
o Artificial intelligence (AI)
Computer systems with the capacity to reason the way people do.
o Expert Systems (ES)
Software systems that use AI to mimic the thinking of humans.
o Intranets and corporate portals
Allow employees by password access, to share databases, and
o Extranets and enterprise portals
Allow communication and data sharing between the organization
and the external environment
o Electronic data interchange (EDI)
Use controlled access to enterprise portal and supporting
software to enable electronic transactions between businesses.
Managerial advantages of IT utilization
o Planning advantages
Better and more timely access to useful information
o Leading advantages Improved communication with staff and stakeholders
Keeping objectives clear
o Controlling advantages
Study Question #3’s answer
A performance deficiency is…
o Actual performance being less than desired performance
A performance opportunity is…
o Actual performance being better than desired performance.
o Apply solutions that are readily available from past experiences to solve
o Structured problems are ones that are familiar, straightforward, and
clear with respect to information needs
o Best applied to routine problems that can be anticipated
o Develop novel solutions to meet the demands of unique situations that
present unstructured problems.
o Unstructured problems are ones that are full of ambiguities and
o Commonly faced by higher-level management
Crisis decision making
o A crisis involves an unexpected problem that can lead to disaster if not
resolved quickly and appropriately
o Rules for crisis management
Figure out what is going on
Remember that speed matters Remember that slow counts, too
Respect the danger of the unfamiliar
o Problem avoiders
Inactive in information gathering and solving problems
o Problem solvers
Reactive in gathering information and solving problems
o Problem seekers
Proactive in anticipating problems and opportunities and taking
appropriate action to gain an advantage
Systematic versus intuitive thinking
o Systematic thinking approaches problems in a rational step-by-step and