Chapter 9 Managers and Their Information Needs

Learning Objectives When you finish this chapter, you will: See the link between an organization’s structure and information flow. Be able to list the main functions and information needs at different managerial levels. Recognize the characteristics of information needed by different managerial levels. Recognize the influence of politics on the design of, and accessibility to, information systems.

Managers and Information Generally, managers at different levels of an organizational hierarchy: Make different types of decisions Control different types of processes Therefore, they have different information needs

Managers and Information Figure 9.1 The management pyramid

The Traditional Organizational Pyramid Many organizations follow pyramid model CEO at top Small group of senior managers, one level down Larger number of middle managers, reporting to senior managers Many more lower-level managers who report to middle managers Clerical and Shop Floor Workers Bottom of organizational pyramid Operational Management In charge of small groups of front-line workers

The Traditional Organizational Pyramid Tactical Management Also called middle managers Make decisions for subordinates, affecting the near and somewhat more distant future Strategic Management Decisions affect entire or large parts of the organization; “what to do” decisions

Characteristics of Information at Different Managerial Levels Different management levels have different information needs Information needed by different managerial and operational levels varies in the time span covered, level of detail, source, and other characteristics over a broad spectrum

Characteristics of Information at Different Managerial Levels Data Range Amount of data from which information is extracted Time Span How long a period the data covers Level of Detail Degree to which information is specific

Characteristics of Information at Different Managerial Levels Source: Internal versus External Internal data: collected within the organization External data: collected from outside sources Media, newsletters, government agencies, Internet

Characteristics of Information at Different Managerial Levels Structured and Unstructured Data Structured data: numbers and facts easily stored and retrieved Unstructured data: drawn from meetings, conversations, documents, presentations, etc. Valuable in managerial decision making

The Web: The Great Equalizer Outside information now easier to get More free information Information available in easy-to-manipulate format “Data shoppers” allowed to download data they can further process to fit their needs Subscriptions to online message services on highly focused topics Results of research and reports of trends and forecasts offered for a fee

The Nature of Managerial Work Planning Planning at different levels Long-term mission and vision Strategic goals Tactical objectives Most important planning activities Scheduling Budgeting Resource allocation

The Nature of Managerial Work Figure 9.3 An example of a mission statement, strategic goals, and tactical objectives for an in-line skate manufacturer

The Nature of Managerial Work Figure 9.4 The main ingredients of planning

The Nature of Managerial Work Controlling Managers control activities by comparing plans to results. Figure 9.5 Examples of processes used to control projects

The Nature of Managerial Work Decision Making Both planning and control call for decision making The higher the level of management: The less routine the manager’s activities The more open the options The more decision-making involved

The Nature of Managerial Work Management by Exception Managers review only exceptions from expected results that are of a certain size or type to save time. Figure 9.6 An example of a budgetary exception report

The Nature of Managerial Work Leading Managers expected to lead, which requires Having a vision and creating confidence in others Initiating activities to make work efficient and effective Creating new techniques to achieve corporate goals Encouraging and inspiring subordinates Presenting a role model for desired behavior Taking responsibility for undesired consequences Motivating employees and delegating authority

Trends in Organizational Structure IT Flattens the Organization Eliminates several layers of middle managers Figure 9.7 Information systems flatten managerial layers

Trends in Organizational Structure The Matrix Structure People report to different supervisors, depending on project, product, or location of work More successful for smaller, entrepreneurial firms IT supports matrix structure Easier access to cross-functional information

Trends in Organizational Structure Figure 9.8 An example of a matrix organization

Characteristics of Effective Information Tabular and Graphical Representation Certain information better presented graphically Trends as lines Distributions as pie charts Performance comparisons as bar charts Many people prefer tabular data for complex problem solving

Characteristics of Effective Information Figure 9.9 Tabular and graphical presentations: the information in the two presentations is identical, but the trend is detected faster with the line graph.

Characteristics of Effective Information On-line Analytical Processing (OLAP) Cube of tables showing relationships among related variables Operates on specially organized data or on relational database data Easily answers questions like “What products are selling well?” or “Where are the weakest-performing sales offices?” Faster than relational applications

Characteristics of Effective Information Figure 9.10 OLAP applications provide information on multiple dimensions for management decision making.

Characteristics of Effective Information Dynamic Representation Data presented in real time Includes moving images representing speed or direction Changing colors represent rate of change Use expected to grow

Managers and Their Information Systems Figure 9.11 Types of information systems typically used at different levels of an organization’s hierarchy

Managers and Their Information Systems Transaction-Processing Systems (TPS) Capture and process raw materials for information Interfaced with applications to provide up-to-date information Clerical workers use TPS for routine responsibilities Operation managers use TPS for ad-hoc reports

Managers and Their Information Systems Decision Support Systems (DSS) and Expert Systems (ES) DSS and ES support more complex and nonroutine decision-making and problem-solving activities Used by middle managers as well as senior managers

Managers and Their Information Systems Executive Information Systems (EIS) Provide timely, concise information about organization to top managers Provide internal as well as external information Economic indices Stock and commodity prices Industry trends

Managers and Their Information Systems Customer Relationship management Systems (CRM) Help collect data about customers Analyze the data into useful information to help serve customers better Help managers find effective and efficient marketing strategies Challenge Address the right customer at the right time with the right offer

Information, Politics, and Power Development and control of ISs often involves problematic politics Power Information affords power which can be problematic. Who owns the system? Who pays for developing the system? Who accesses what information? Who has update privileges? The Not-Invented-Here Phenomenon

Ethical and Societal Issues Electronic Monitoring of Employees Monitoring on the Rise 73.6% of major U.S. firms reported recording and reviewing employees’ communications and activities on the job (AMA published survey, April 2001) The Microchips Are Watching Video cameras Software to count keystrokes Artificial intelligence to monitor cash disbursement and detect fraud Monitoring e-mail and Web access

Ethical and Societal Issues Electronic Monitoring of Employees The Employers’ Position Entitled to know how employees spend time Believe monitoring is an objective, nondiscriminatory method to gauge output The Employees’ Position Deprives them of autonomy and dignity Increases stress and stress-related illness and injury