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Chapter 3

Chapter 3.doc

Management (MGT)
Course Code
Chris Bovaird

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Chapter 3 Managing Information Systems and Communication Technology
Information Management: An Overview
Information manager: the manager responsible for the activities needed to generate, analyze and disseminate information
that a company needs to make good decisions.
Information management: an internal operation that arranges the firm’s information resources to support business
performance and outcomes.
- Data versus Information:
Data: raw facts and figures.
Information: a meaningful, useful interpretation of data.
- Information systems:
Information systems (IS): an organized method of transforming data into information that can be used for decision
Example: text, format, commands word processor finished document
New Business Technologies in the Information Age
- Electronic Business and Communications Technologies:
Electronic information technologies (EIT): IS applications based on telecommunications technologies. EITs enhance the
performance and productivity of general business activities by performing two functions: providing coordination and
communication within the firm, and speeding up transactions with other firms.
- Six types of EIT:
Fax machine (facsimile machine): a machine that can quickly transmit a copy of documents or graphics over telephone
Voice mail: A computer-based system for receiving and delivering incoming telephone calls.
Electronic mail (email) system: electronic transmission of letters, reports, and other information between computers.
Electronic conferencing: allows people to communicate simultaneously from different locations via telephone, video or
email group software.
Groupware: a system that allows two or more individuals to communicate electronically between desktop PCs.
- Data Communication Networks:
Data communication networks: global networks that permits users to send electronic messages quickly and
Internet: A gigantic network of networks that serves millions of computers, offers information on businesses, science,
and government, and provides communication flows among more than 170,000 separate networks around the world.
Internet service provider (ISP): A commercial firm that maintains a permanent connection to the internet and sells
temporary connections to subscribers.
World Wide Web: A system with universally accepted standards for storing, retrieving, formatting and displaying
information on the Internet.
Web servers: dedicated workstations – large computers – that are customized for managing, maintaining and supporting
Browser: software that enables a user to access information on the web.
Directories: features that help people find the content they want on the web. The user types in key words and the
directory retrieves a list of websites with titles containing those words.
Search engine: software for searching web pages that does not pre-classify them into a directory.
Intranet: A company’s private network that is accessible only to employees via entry through electronic firewalls.
Firewall: Hardware and software security systems that ensure that internal computer systems are not accessible to
Extranet: A network that allows outsiders limited access to a firm’s internal information system.
New Options for Organization Design: The Networked Enterprise:
- Leaner organizations:
Information networks leading to leaner companies with few employees and simpler organizational structures.
Since today’s networked form can maintain information linkages among both employees and customers, more work can
be accomplished with fewer people.
Widespread reductions in middle-management positions and the shrinkage of layers in organizational structure are
possible because information networks now provide direct communications between the top managers and workers at
lower levels.
Electronic information networks are replacing the operating managers who formerly communicated company policies,
or work instructions to lower-level employees.
- More flexible operations:
Mass customization: producing large volumes of products or services, but giving customers the choice of features and
options they want.
- Increased Collaboration
Collaboration not only among internal units but with outside firms as well, is on the rise because networked systems
make it cheaper and easier to contact everyone, whether other employees or outside organizations.
Aided by intranets, more companies are learning that complex problems can be solved better by means of collaboration,
either in formal teams or through spontaneous interactions.
In the new networked organization, decisions that were once the domain of individuals are now shared as both people
and departments have become more interdependent.
- Networking and the Virtual Company:
Networked systems can also improve collaboration between organizations through the so-called virtual company.
This can be a temporary team assembled by a single organization, but a virtual company can also be created by several
allied firms.
Each contributes different skills and resources that collectively result in a competitive business that wouldn’t be feasible
for any one of them working alone.
- Greatest Independence of Company and Workplace:
Geographic separation of the workplace from the company headquarters is more common than ever because of
networked organizations.
Employees do not work only at the office or the factory, nor are all of a company’s operations performed at one location.
A company’s activities may also be geographically scattered but highly coordinated, thanks to a networked system.
- Improved Management Processes:
Networked systems have changed the very nature of the management process.
The activities, methods, and procedures of today’s manager differ significantly from those that were common just a few
years ago. Before, upper-level managers did not concern themselves with all the detailed information that filtered
upward in the workplace, since gathering that information was expensive and the arrival was slow in coming. This type
of management was delegated to middle and first-line managers.
With networked systems, however, instantaneous information is accessible in a convenient and usable format.
Consequently more and more upper managers use it routinely for planning, leading, directing and controlling operations.
Today a top manager can find out the current status of any customer, inspect productivity statistics for each workstation,
and analyze the delivery performance of any driver and vehicle.
Enterprise Resource Planning (ERP): large information systems for integrating all the activities of a company’s business
Type of Information Systems
- User Groups and Systems Requirements:
Knowledge workers: employees whose jobs involve the use of information and knowledge as the raw materials of their
- Managers at Different Levels:
Due to their work on different kinds of problems, top manager, middle managers, knowledge workers and first line
managers have different information needs.
First line (operational) managers: need information to oversee daily details of their departments.
Knowledge workers: need special information for conducting technical projects.
Middle managers: need summaries and analyses for setting intermediate and long-range goals for the departments or
projects under their supervision.
Top-management: analyzes broader trends in the economy, the business environment, and overall company performance
to conduct long-range planning for the entire organization.
- Functional Areas and Business Processes:
Each business function – marketing, human resources, accounting, production, and finance – has its own information
In addition, in business organized according to business processes, process group need special information.
Each user group and department is represented by an IS.
Major Systems by Level:
Transaction Processing System (TPS): applications of information processing for basic day-to-day business transactions.
- Systems for Knowledge Workers and Office Applications:
Systems analysts and designers deal with the entire computer system. They represent the IS group in working with users
to learn user’s requirements and to design systems that meet them.
Programmers write the software instructions that tell computers what to do.