1. Acquiring, Organizing, and Using Information
Chapter Seventeen
Acquiring, Organizing, and Using Information

2. Understand how information is organized to help people make decisions.
Learning Objectives
Understand how information is organized to help people make decisions.
Describe how business research is conducted.
Discuss management’s information requirements.
Describe the five functions of an information system.
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3. Learning Objectives (cont’d)
Explain how the Internet, intranet, standards for communications, and web pages affect business today.
Discuss how the Internet helps employees communicate, assists a firm’s sales force, trains and recruits employees, and conducts financial activities.
Understand how business application software can be used to collect and distribute information.
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4. The Nature of Information
Information produces knowledge and empowers managers and employees to make better decisions
The relationship between information and risk
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5. The Nature of Information (cont’d)
Information rules
Information rules based on situational experience provide guidance in handling similar situations or circumstances
Business research continuously looks for new rules since business conditions are always changing
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6. The Nature of Information (cont’d)
The difference between data and information
Data
Numerical or verbal descriptions that usually result from some sort of measurement
Information
Data presented in a form that is useful for a specific purpose
Database
A single collection of data stored in one place that can be used by people throughout an organization to make decisions
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7. Data versus Information
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8. Data versus Information
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9. Business Research Secondary research Primary research
Gathering information from sources where the original research was done by someone else
Primary research
Developing and gathering information firsthand
Qualitative research
Involves the descriptive or subjective reporting of information discovered by the researcher
Quantitative research
Involves the collection of numerical data for analysis through a survey, experiment, or content analysis
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10. Copyright © Houghton Mifflin Company. All rights reserved.

11. Which Research Method to Choose
Decision factors
Limitations on time and money
The need for accuracy and validity
Managers rely on the results of proven methods until those methods no longer work well
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12. The Information System
Management information system (MIS)
A system that provides managers with the information they need to perform their jobs as effectively as possible
Purpose: to distribute timely and useful information to the decision makers who need it
Information technology officer
A manager at the executive level who is responsible for ensuring that a firm has the equipment necessary to provide the information the firm’s employees and managers need to make effective decisions
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13. The Information System (cont’d)
Managers’ information requirements
Summary of future possibilities
Summary of present situation
Summary of past performance
Information about 5 principal areas of management: finance, operations, marketing, human resources, and administration
Size and complexity of the system
Must be properly sized to provide sufficient information resources without being simple or too complex to be useful
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14. Management Information System (MIS)
Source: Management, 8th ed., by Ricky W. Griffin. Copyright © 2005 by Houghton Mifflin Company. Adapted with permission.
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15. Five Management Information System Functions
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16. Functions of an MIS Collecting data
Data should be relevant and accurate
Internal sources
Managers and employees, company records and reports, minutes of meetings, accounting data, sales data, HR data, production data
External sources
Customers, suppliers, bankers, trade and financial publications, industry conferences, online computer services, firms specializing in gathering data
Cautions
The cost of obtaining data from external sources should be weighed against the benefits
Check data, especially computerized data, for accuracy
Outdated data are likely to yield inaccurate information
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17. Functions of an MIS (cont’d)
Storing data
An MIS must be capable of storing data until they are needed
Updating data
Manual updating—employee inputs fresh data into the database
Automatic updating—MIS updates itself as data become available
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18. Functions of an MIS (cont’d)
Processing data
The transformation of data into a form useful for a specific purpose
Statistics
A measure that summarizes a particular characteristic of an entire group of numbers
Frequency distribution—a listing of the number of times each value appears in a set of data
Arithmetic mean—the sum of all the values of a data set divided by the number of items in the data set
Median—the value at the exact middle of a set of data when the data are arranged in order
Mode—the value that appears most frequently in a set of data
Range—the difference between the highest and lowest value in a set of data
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19. Statistics Frequency of $3,500 = 2 Arithmetic mean = $2,681.82
Median = $2,800
Mode = $3,000
Range = $1,700
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20. Functions of an MIS (cont’d)
Presenting information
Verbal information—list or paragraph form
A formal report typically includes an introduction, the body of the report, conclusions, and recommendations
Visual displays
Graphs, bar charts, pie charts
Tabular displays
Verbal or numerical information presented in columns and rows
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21. Typical Visual Displays Used in Business Presentations
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22. Typical Visual Displays Used in Business Presentations
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23. Copyright © Houghton Mifflin Company. All rights reserved.

24. The Internet and New Telecommunication Technologies
Information society
A society in which large groups of employees generate or depend on information to perform their jobs
The Internet and the intranet
Internet
A worldwide network of computers linked through telecommunications
Used for e-business, communication, information gathering
Intranet
A smaller version of the Internet for use only within a firm
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26. Copyright © Houghton Mifflin Company. All rights reserved.

27. The Internet and New Telecommunication Technologies (cont’d)
Internet standards for communications
Standardization guidelines let products, services, materials, and processes achieve their purposes
TCP/IP—Transmission Control Protocols and Internet Protocols
Allow computers to communicate with each other
URL —Uniform Resource Locator
Acts as the “address” of a particular website
http—hypertext transfer protocol
Allows for proper transfer of information between one computer and another on the Internet
Web search engines
Software for creating web pages
Developing a website
Hosting a website
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28. Managing Internet Activities
Helping employees communicate
—provides virtually instantaneous communication
Groupware—software that facilitates the management of large projects among geographically dispersed employees as well as such group activities as problem solving and brainstorming
Collaborative learning system—a work environment that allows problem-solving participation by all team members
Assisting the firm’s sales force
Customer-relationship management programs
Sales force automation programs
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29. Managing Internet Activities (cont’d)
Training employees
Reduced educational and training costs
Increased flexibility and availability of training
Faster transfer of information about changes in the firm’s policies and procedures
Recruiting employees
Provides for a global recruiting reach, especially for individuals with unique skills
Helps build a database of potential employees
Reduces recruiting costs for initial applications and screening interviews
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30. Managing Internet Activities (cont’d)
Conducting financial activities
Completing e-business transactions
Requires a secure electronic transaction encryption process
Online banking services
Allows direct customer access to accounts; reduces transaction costs, provides increased security by reducing theft and potential mistakes due to human error
Tracking employee expenses
Employees can input their expenses for reimbursement through software programs that process employee expense reports
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31. Business Applications Software
Integrated software combines many functions in one package
Database management
Graphics
Spreadsheets
Word processing
Desktop publishing
Accounting
Computer-aided design (CAD)
Computer-aided manufacturing (CAM)
Computer-integrated manufacturing (CIM)
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