Chapter Seventeen Acquiring, Organizing, and Using Information Learning Objectives 1. Understand how information is organized to help people make decisions. 2. Describe how business research is conducted. 3. Discuss management’s information requirements. 4. Describe the five functions of an information system. Copyright © Houghton Mifflin Company. All rights reserved. 17 - 2 Learning Objectives (cont’d) 5. Explain how the Internet, intranet, standards for communications, and web pages affect business today. 6. Discuss how the Internet helps employees communicate, assists a firm’s sales force, trains and recruits employees, and conducts financial activities. 7. Understand how business application software can be used to collect and distribute information. Copyright © Houghton Mifflin Company. All rights reserved. 17 - 3 The Nature of Information • Information produces knowledge and empowers managers and employees to make better decisions • The relationship between information and risk Copyright © Houghton Mifflin Company. All rights reserved. 17 - 4 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 Copyright © Houghton Mifflin Company. All rights reserved. 17 - 5 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 Copyright © Houghton Mifflin Company. All rights reserved. 17 - 6 Data versus Information Copyright © Houghton Mifflin Company. All rights reserved. 17 - 7 Data versus Information Copyright © Houghton Mifflin Company. All rights reserved. 17 - 8 Business Research • Secondary 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 Copyright © Houghton Mifflin Company. All rights reserved. 17 - 9 Copyright © Houghton Mifflin Company. All rights reserved. 17 - 10 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 Copyright © Houghton Mifflin Company. All rights reserved. 17 - 11 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 Copyright © Houghton Mifflin Company. All rights reserved. 17 - 12 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 Copyright © Houghton Mifflin Company. All rights reserved. 17 - 13 Management Information System (MIS) Source: Management, 8th ed., by Ricky W. Griffin. Copyright © 2005 by Houghton Mifflin Company. Adapted with permission. Copyright © Houghton Mifflin Company. All rights reserved. 17 - 14 Class Exercise • When using a management information system, the first step is to collect the data needed to establish the firm’s database. What is the most appropriate source that could be used to answer the following questions? – How successful has the promotional campaign been? – How much does a competitor charge for a particular product? – What is the current population of the state of Arizona? – How do customers view the new pricing policy? – What is the average salary for employees in the shipping department? Copyright © Houghton Mifflin Company. All rights reserved. 17 - 15 Chapter Quiz 1. Numerical or verbal descriptions that usually result from some sort of measurements are referred to as a) b) c) d) e) information. Data. a database. information collection process. computer info base. 2. Observation, interviews, and focus groups are examples of a) b) c) d) e) database research. quantitative research. qualitative research. statistical research. data collection. Copyright © Houghton Mifflin Company. All rights reserved. 17 - 16 Chapter Quiz (cont’d) 3. The difference between the highest value and the lowest value in a set of data is the a) b) c) d) e) arithmetic mean. median. range. standard deviation. mode. 4. __________ software facilitates the management of large projects among geographically dispersed employees. a) b) c) d) e) Database Spreadsheet Collection data Browser Groupware Copyright © Houghton Mifflin Company. All rights reserved. 17 - 17 Chapter Quiz (cont’d) 5. A computer program that allows users to record, process, and report financial information is a __________ program. a) b) c) d) e) database management spreadsheet desktop publishing Accounting CIM Copyright © Houghton Mifflin Company. All rights reserved. 17 - 18 Answers to Chapter Quiz 1. Numerical or verbal descriptions that usually result from some sort of measurements are referred to as a) b) c) d) e) information. Data. a database. information collection process. computer info base. 2. Observation, interviews, and focus groups are examples of a) b) c) d) e) database research. quantitative research. qualitative research. statistical research. data collection. Copyright © Houghton Mifflin Company. All rights reserved. 17 - 19 Answers to Chapter Quiz (cont’d) 3. The difference between the highest value and the lowest value in a set of data is the a) b) c) d) e) arithmetic mean. median. range. standard deviation. mode. 4. __________ software facilitates the management of large projects among geographically dispersed employees. a) b) c) d) e) Database Spreadsheet Collection data Browser Groupware Copyright © Houghton Mifflin Company. All rights reserved. 17 - 20 Answers to Chapter Quiz (cont’d) 5. A computer program that allows users to record, process, and report financial information is a __________ program. a) b) c) d) e) database management spreadsheet desktop publishing Accounting CIM Copyright © Houghton Mifflin Company. All rights reserved. 17 - 21