1. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-1 Chapter 11 Managing information: communication and technology

2. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-2 Learning objectives After studying the chapter, you should be able to: –explain why effective communication—the sharing of information—helps an organisation gain a competitive advantage, and describe the communication process –describe the communication process and explain the role of perception in communication –define information richness and describe the information richness of communication media available to managers

3. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-3 Learning objectives (cont.) –differentiate between data and information, list the attributes of useful information and describe three reasons why managers must have access to information to perform their tasks and roles effectively –describe the computer hardware and software innovations that have created the information technology revolution and changed the way managers behave –differentiate among six performance-enhancing kinds of management information systems.

4. . Management challenge ‘Technology tunes up customer contact’ Case Study: SAP Australia and mobile devices PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-4

5. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-5 Overview –Information Technology (IT) is a tool to improve human communications, NOT a substitute. –IT needs to be humanised. –Ineffective communication leads to poor performance. –Effective communication is very important. –A huge range of communication media/options exist. –Good communication leads to competitive advantage.

6. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-6 Information and the manager’s job –Information is essential to the manager’s job. It is the source of knowledge and informs managers to make knowledgeable, prudent choices. –Data are raw, unsummarised and unanalysed facts. –Information is data that has been organised in a meaningful fashion (e.g. graphs, tables, reports). –Decisions can be made from information. –IT can help order data into useful information.

7. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-7 Attributes of useful information

8. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-8

9. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-9 Information systems and technology Information technology –A system for acquiring, organising, storing, manipulating and transmitting information

10. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-10 Management information systems (MIS) A specific form of IT that managers utilise to generate the specific, detailed information they need to perform their roles effectively

11. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-11 Information and decision-making In planning, organising, leading and controlling, much of management is about making decisions. To make effective decisions, managers need information, both from inside and outside the organisation.

12. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-12 Information and control Managers achieve control by establishing measurable goals, measuring actual performance, comparing actual performance with goals and taking any corrective action. Managers must have information to achieve control over any organisational activity.

13. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-13 Information and coordination Coordination problems that managers face in managing global supply chains are increasing. Managers have adopted sophisticated IT that helps them coordinate the flow of materials, semi-finished goods and finished goods throughout the world.

14. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-14 Communication, information and management Communication: the sharing of information between two or more individuals or groups to reach a common understanding Something has been communicated when a common understanding is achieved. Good communication is essential for achieving: –efficiency –quality –responsiveness to customers –innovation. This leads to competitive advantage. IT facilitates effective communications.

15. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-15 The communication process Sender: person or group sending the message Message: information intended for sharing Encoding: converting the message into understandable symbols or language Noise: anything hampering any stage of the communication process Messages are transmitted through a medium such as email, phone, reports or meetings. Messages are decoded or interpreted by a receiver. The receiver ‘feeds back’ to original sender.

16. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-16

17. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-17 Encoding messages Messages can be encoded into words, written or spoken, making for verbal communication. Messages can be encoded into non-verbal communication (NVC) with no written or spoken words. –Examples are facial expressions, hand movements, posture and dress –Non-verbal communication sometimes involuntary and less controlled than verbal communication

18. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-18 Dangers of ineffective communication –Up to 85 per cent of a manager’s time is spent on communication. –Managers need to help subordinates communicate effectively. –Performance suffers with poor communication. Loss of competitive advantage Jeopardy to safety and human life

19. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-19 Information richness and communication media –Effective communication needs the right medium. Right medium (phone, fax, meeting) will vary—need to choose carefully Need to choose the right level of ‘information richness’ –Information richness is the amount of information that a medium can carry and the extent to which the chosen medium enables the sender and the receiver to reach a common understanding. –Face-to-face communication has the highest information richness—less ambiguity and confusion.

20. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-20

21. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-21 Information technology aids richness Use of videoconferencing –visual and audio Use of teleconferencing –audio Voicemail messages

22. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-22 Personal written communications –Demand greater attention –Are personally tailored to the receiver –Do not have immediate feedback mechanism –Email can be one example of a personal message –Importance of etiquette, politeness, succinctness and format in all written messages

23. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-23 Email’s ‘seven sins’ –Ignoring emails –Denying receipt of emails –Tactlessness –‘Waffle’ –Presumption that email has been sent –Copying unnecessary people into emails –Sloppiness

24. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-24 Abuse of email –Harassment –Use for purposes other than company work –Junk mail –Email overload –Compulsion to view emails All lead to loss of productivity.

25. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-25 The information technology revolution The tumbling price of information –The cost of computer hardware has dropped dramatically while the power of computers has risen sharply. –IT can greatly improve communication.

26. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-26 The information technology revolution (cont.) Wireless communications –Cellular service has grown rapidly to over 110 million users. –Wireless access now connects laptops to networks.

27. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-27 The information technology revolution: computer networks Networking –Networking is the exchange of information through a group or network of interlinked computers. –Servers are powerful computers that relay information to client computers connected on a Local Area Network (LAN). –Mainframes are large computers processing vast amounts of information. –The Internet is a world-wide network of computers.

28. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-28

29. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-29 Software developments Operating system software –Tells computer hardware how to run Applications software –Designed for a specific task or use Artificial intelligence –Behaviour performed by a machine that, if performed by a human being, would be called intelligent

30. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-30 The organisational hierarchy Traditionally, managers have used the organisational hierarchy as the main system for gathering information necessary to make decisions and coordinate and control activities. Drawbacks –Can reduce timeliness of information –Reduces quality of information –Tall structure can make for an expensive information system

31. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-31

32. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-32 Types of information systems Transaction processing systems (TPS) –Systems designed to handle large volumes of routine transactions –The first computer-based information systems handling billing, payroll and supplier payments Operations information systems (OIS) –Systems that gather, organise and summarise comprehensive data in a form of value to managers –Can help managers with non-routine decisions such as customer service and productivity

33. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-33 Types of information systems (cont.) Decision support systems (DSS) –Provide interactive models to help managers make non-routine decisions –Analyse investment potential, new product pricing Expert systems and artificial intelligence –Employ human knowledge embedded in a computer to solve problems usually requiring human expertise –Use artificial intelligence to recognise, formulate and solve problems and learn from experience

34. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-34 Types of information systems (cont.) Enterprise resource planning systems –Multi-module application software packages that coordinate the functional activities necessary to move products from the product design stage to the final customer stage

35. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-35 Impact of information systems Computer-based information systems –Increasingly associated with decentralisation of managerial decision-making –Flattening (‘delayering’) organisations Information systems reduce the need for the hierarchy to control the firm. Managers control and coordinate using the system, not workers.

36. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-36 How computer-based information systems affect the organisational hierarchy

37. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-37 Impact of information systems Horizontal information flows –Information networks can bridge functional departments which allows information to flow horizontally between departments, leading to much higher productivity, quality and innovation.

38. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-38 Information systems and competitive advantage Competitive advantages of information systems –Improved managerial decision-making capability –Reduced need for hierarchical control systems –Increased efficiency by reducing requirements for personnel Virtual products –Firms can use their information systems to custom-tailor goods and services individually for each of their customers

39. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-39 Limitations of information systems Loss of the human element –Information systems cannot present all kinds of information accurately. –Thick information, which is rich in meaning and not quantifiable, is best suited to human analysis. –Information systems should support face-to- face communication, and not be expected to replace it.

40. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-40 Limitations of information systems (cont.) Causes of difficult implementations –Information systems can be hard to develop and put into service. –Consistent standards for systems do not always exist. Makers of hardware may use different standards which makes it hard to share information between systems.

41. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-41 Limitations of information systems (cont.) Implementation difficulties To avoid problems: –list major organisational goals and the information types required to measure those goals –audit the current system to verify that information collected is accurate, reliable, timely and relevant –investigate other sources of information –build support for the system with workers –create formal training programs –emphasise that face-to-face contact is important.

42. . Management in the media ‘How can managers create competitive advantage by using it to improve communication?’ PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-42

43. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-43 Summary –IT now central to operation of most organisations –Need quality, timely, relevant and sufficient information –IT can improve productivity markedly –Good communication essential for competitive advantage –Information richness needed for understanding –Great increases in IT power and great decreases in IT cost

44. . PPTs to accompany Contemporary Management 2e by Waddell, Jones & George © 2011 McGraw-Hill Australia Pty Ltd 11-44 Summary (cont.) –Four types of MIS transactions processing operations information decision support artificial intelligence –IT has limitations as well as advantages –Human element must be preserved