2. The Functions and Roles of a Manager
Managers have several responsibilities in an
organization. These responsibilities, referred to
as management functions, are to plan,
organize, direct, and control the various
business processes in the company. Managers
also play several roles when they interact with
people, both inside and outside the
organization. These management roles are:
interpersonal ensures that information is
provided, informational roles links all
managerial work together, and decisional roles
makes significant use of the information.
3. Types of Management Decisions
To understand how information technology can be useful, it is
important to understand the three types of decisions that
managers make: structured, semi-structured, and unstructured.
A manager makes a structured decision when he or she
understands the situation clearly and uses established
procedures and information to resolve the problem. A semi-
structured decision occurs when there’s some uncertainty
about a problem and a manager must use his or her judgment.
Sometimes a manager faces unique circumstances or must
anticipate events over a relatively long period of time. In these
situations, a manager must make an unstructured decision,
which requires many quantitative and ethical judgments that
have no clear answers.
4. Levels of Management
There are three management levels in an organization:
operational, tactical, and strategic. A manager at the
operational level is responsible for supervising the day-to-
day activities in the organization’s value chain. A
manager at the tactical level is called a middle manager
and may be responsible for a large organizational unit
such as a sales region or a production plant. Tactical-
level managers responsible for the development and use
of information systems in an organization are called
information systems managers.
A manager at the strategic level is called a top manager
and is responsible for the long-range issues related to the
business’ growth and development. The top manager
responsible for the overall planning of information systems
in an organization is called the chief information officer
5. Management Information Requirements
The time dimension of information relates to when the
information was created, how frequently the information is
needed, how often it is updated, and whether the information
relates to past, present, or future time periods.
The content dimension of information relates to its accuracy and
completeness, how relevant the information is, whether the
information has a broad or a narrow scope, and whether the
source of the information is within the organization or from the
The form dimension of information relates to how the information
is arranged and presented in a report, whether the report
contains detailed or summary information, and what medium is
used to present the information.
6. INFORMATION TECHNOLOGY TO SUPPORT MANAGERIAL
Communication is a social process of people exchanging
ideas or other messages through some physical medium.
The number of people participating in a communication
can vary a person might send a message to one other
person, called a one-to-one communication, or to many
other people, called a one-to-many communication.
The physical location of a sender and receiver can vary
from being in the same room, called same-place
communication, to being in geographically dispersed
locations around the world, called different-places
communication. The time difference between when a
message is sent and when it is received can vary from
simultaneous communication, or same-time
communication, to hours, days, or longer, called different-
7. Collaborative Work
A workgroup can be a committee, a single social unit to
perform some task. Groupware is software that allows groups
of users to share calendars, send messages, access data, and
work on documents simultaneously. Many of these
applications focus on the concept of work flow—the path of
information as it flows through a workgroup.
However, the advent of the World Wide Web changed the
workgroup landscape. Corporations are installing intranets
using Hypertext Markup Language (HTML), Web browsers, and
other Internet technologies that enable managers and
employees to access and share the company’s internal data
and to collaborate on projects easily. Because these intranets
are built on standardized protocols like TCP/IP, corporations
can open up their intranets to strategic partners and
customers, creating extranets.
8. Distributed Computing
In the age of networks, the challenge for a
company’s chief information officer (CIO) and other
information systems managers is to integrate all
kinds of computers into a single, seamless system.
This approach, often called distributed computing,
allows PCs, workstations, networks computers, and
mainframes to coexist peacefully and complement
each other. Many organizations are adding thin
clients network computers, Internet appliances, and
similar devices to the mix.
9. The Automated Office
An automated office enables individuals, workgroups, and
organizations to acquire, process, store, and distribute information
electronically using computers and telecommunication networks.
Computer conferencing, voice teleconferencing, and video
teleconferencing fall under the general category of electronic
meeting technologies; they enable members of a workgroup to
conduct meetings even when participants are scattered around
Experts have also predicted the paperless office—an office of the
future in which magnetic and optical archives will replace paper
To reduce the flow of paper, a growing number of organizations
are turning to document imaging systems that can scan, store,
retrieve, and route bit-mapped images of paper documents.
10. Inter - organizational Information Systems
Another way a company can automate communications
and reduce paper flow between itself and its suppliers,
customers, and other organizations is through an inter -
organizational information system. Such systems use
networking and telecommunication technologies that enable
a company to share business data and exchange
transactions with other companies electronically.
Electronic Data Interchange (EDI)
Electronic data interchange (EDI) is the direct, computer-to-
computer exchange of standardized, common business
transaction documents, such as purchase orders and
invoices, between business partners, suppliers, and customers.
EDI systems have been developed for particular business
partners in specific industries for several decades.
11. International Information Systems
Information technology, especially networks,
telecommunications, and the Internet, have made it
economically feasible for a company to do business
internationally and conduct its business processes virtually
anytime and anywhere. Any information system that supports
international business activities is called an international
An international environment is multilingual and multicultural,
has multiple governments, has many different regulations
regarding privacy and intellectual property protection, has
varying standards for telecommunications and other
technologies, and has multiple geographic conditions, time
zones, and monetary currencies. All these factors affect the flow
of data between countries, commonly called transborder data
12. INFORMATION TECHNOLOGY TO SUPPORT MANAGERIAL
Decision making is a process that includes four phases:
intelligence, design, choice, and implementation.
Managers use conceptual models in decision making to cope
with the complexities of a situation. A model is a simplified
representation, or abstraction of reality, containing only the most
relevant aspects of the real situation. A manager may use a
mental model, a mathematical model, an analog model, or an
A manager’s decision style reflects how that individual
approaches decision-making. One manager may have a rational
decision style where another may prefer a satisfying decision
13. Management Information Systems
A management information system (MIS) gives a manager
the information he or she needs to make decisions,
typically structured decisions, regarding the operational
activities of the company. Management information
systems are also referred to as management reporting
systems because their main output is a variety of reports for
managers. An MIS provides three types of reports: detailed
reports, summary reports, and exception reports.
Decision Support Systems
A decision support system (DSS) helps a manager make
semistructured decisions. The DSS design philosophy is to
provide managers with the tools they need to analyze
information they deem relevant for a particular decision or
class of decisions.
14. Components of a Decision Support System
A DSS has three major components. The data
management component is a database of relevant
internal and external information of the
organization. The model management component
allows the manager to evaluate alternative
problem solutions and identify the best or most
satisfying solution by using appropriate software,
such as a spreadsheet and statistical modelling
tools. The third DSS component is the user interface,
or dialog management, through which a manager
utilizes the data and modelling capabilities of the
DSS easily and effectively.
15. Group Decision Support Systems
Group decision support systems (GDSS) are designed to
improve the productivity of decision-making meets by
enhancing the dynamics of collaborative work. The GDSS
also includes specific communication-oriented software
tools that support the development and sharing of ideas.
Geographic Information Systems
A geographic information system (GIS) is a special type of
decision support system designed to work with maps and
other spatial information. A GIS is used to support a wide
variety of managerial decisions that involve geographic
16. Executive Information Systems
An executive information system (EIS) combines features of MIS
and DSS to support unstructured decision making by top
managers. An EIS has similar design components to a DSS. The
EIS data management component provides interactive access
to the company’s important information, and the model
management component provides access to data on the
company’s critical success factors.
An EIS enables the executive to drill down through the available
information to the level of detail needed. This ability to access
both internal and external information makes an EIS a powerful
tool during the intelligence phase of decision making.
17. Expert Systems
An expert system (ES) supports decision making by
providing managers with access to computerized
expert knowledge. An ES is designed to replicate
the decision-making process of a human expert.
Today’s expert systems are based on years of
artificial intelligence (AI) research devoted to
replicating elusive human cognitive abilities in
A knowledge base is similar to the database
component in an MIS or a DSS. In addition to facts,
a knowledge base contains a system of rules for
determining and changing the relationship
between those facts.
18. Along with the knowledge base, an ES includes a user
interface and an inference engine. The inference engine
combines the user input with the knowledge base, applies
logical principles, and produces the requested expert
Expert systems are difficult to build. To simplify the process,
many software companies sell expert system shells—generic
expert systems containing human interfaces and inference
engines. These shells do not include the difficult-to-create
knowledge base. A knowledge engineer—a specialist who
interviews and observes experts and converts their words
and actions into the knowledge base—usually constructs the
19. Information Systems in Perspective
Information systems rarely fall cleanly into just one
of the categories of MIS, DSS, EIS, or ES. Any
specific system can have a mix of their features.
Which design features to incorporate into an
information system should be chosen based on
the communication and decision-making
requirements of the managerial users.
20. INFORMATION TECHNOLOGY TO SUPPORT BUSINESS
The competitive forces model is a tool used to
examine the five key factors that influence, and
often threaten, a company:
II. New competition.
21. A strategy is an organization’s intention to pursue a set of activities
over the long term to attain its goals.
Managers use five strategies to achieve competitive advantage:
A cost leadership strategy focuses on providing high-quality
products and services at the lowest cost in the industry. A firm can
also find ways to help its suppliers or customers reduce their costs or
to increase costs of their competitors.
A differentiation strategy focuses on providing products and
services that are particularly valued and are perceived by
customers as uniquely different from the competition. This allows a
firm to focus its products or services to give it an advantage in
particular segments or niches of market.
An innovation strategy emphasizes finding new ways to restructure
business processes for producing or distributing products and
services or developing unique products and services.
22. An innovation strategy emphasizes finding new ways to
restructure business processes for producing or distributing
products and services or developing unique products and
A Growth Strategy focuses on expanding a business’s capacity
to produce goods and services, expanding into global
markets, diversifying into new products and services.
An Alliance strategy focuses on establishing new business
linkages and alliances with customers, suppliers, competitors,
consultants and other companies. These linkages may include
mergers, acquisitions, joint ventures, forming of “virtual
companies” or other marketing, manufacturing or distribution
agreements between a business and its trading partners.
23. The Value Chain and Strategic Information Systems
Inbound logistics receives and stores supplies and materials
from the firm’s environment and distributes them when and
where they are needed in the organisation.
• Operations use the supplies and materials to create or
manufacture the organisation’s products and services.
• Outbound logistics delivers the products and services when
and where needed by customers.
• Marketing and sales investigates customer needs and
promotes the value of and sells the products and services in
the environment (marketplace).
• Service maintains and enhances the product or service
usefulness to customers through, for example, training and
24. Value chain Example
A collaborative intranet-based system can increase the
communication and collaboration needed to dramatically
improve administrative coordination and support services. A
career development intranet can help human resource
management function provide employees with professional
development training programs. Computer aided engineering
and design extranets enable a company and it’s business
partners to jointly design products and processes. E-commerce
auction and exchanges can dramatically improve
procurement of resources by providing an online market place
for a firm’s suppliers
25. Competing on Efficiency and Effectiveness
Efficiency is how primary and support activities
produce desired output with less work or lower
Effectiveness is how customers evaluate the
quality of the output—products and services—of
the value chain.
The ways to use information technology to
improve efficiency are:
Using the best-known way to do the work.
Integrating across functions and organizations.
26. A company can improve effectiveness using
information technology by:
Purchasing the product.
Fitting the product to customer requirements.
Using the product.
Making the product easier to maintain.