Chapter 1
information management in a global economy
LEARNING OBJECTIVES
After completing Chapter 1, you will be able to:
Define information and discuss its role in organizations.
Identify the role of information technology in organizations.
Classify information systems according to their purpose and scope.
Identify five key issues in managing information in today’s organizations.
Describe managers’ use of information in their jobs.
Identify the information requirements for effective management.
Offer an approach to addressing ethical issues in information management.
Identify the four steps in the effective management of information.
What is Information Management?
What Is Information?
Data are fundamental facts, figures, observations, and measurement, without context or
organization.
Information is processed data—data that have been organized and interpreted, and
possibly formatted, filtered, analyzed, and summarized.
Knowledge is an understanding, or model, about people, objects, or events, derived from
information about them.
Wisdom is the ability to use knowledge for a purpose.
Ask students to give examples of data concerning their personal information, and
then give the same in information format. Emphasize that the terms Data and
Information cannot be used interchangeably.
Refer to Figure 1-1 to show the connection between Data, Information, and
Knowledge.
The Role of Information in Organizations
Information as a Resource.
Resources are inputs into the production of goods and services.
When referring to Figure 1-2, explain that money is not the only resource, but
others include people, raw materials (such as data), machinery and time. While
information is considered an asset, it cannot be listed on an accounting balance
sheet. Information is a product just as a piece of furniture and can be sold at a profit.
,Information as an Asset.
Information as a Product.
The Role of Information Technology
Use this section as an introduction to the learning for chapters 3 through 5.
Information technology (IT) includes computer hardware, software, database
management systems, and data communication systems.
Computer hardware refers to the equipment used in electronic information processing.
Today affordable desktop and portable computers can outperform the room-sized, million-
dollar computers of ten years ago.
Computer software provides the instructions, in the form of computer code and its
accompanying documentation, for processing data electronically.
Database management systems offer vehicles for storing and supporting the processing
of large quantities of business information, such as data on employees, products, customers,
and suppliers.
Data communication technologies, specifically company networks and the Internet, a
worldwide network of networks, have dramatically improved the communication of
information across small and large distances.
Managing Information with Information Systems
Information systems combine information technology with data, procedures for
processing data, and people who collect and use the data.
Refer to Figure 1-3 to explain to students that this definition is the cornerstone of
everything in this textbook. The students should be able to repeat the contents of
this figure and the definition without hesitancy.
In the next class period, you might want to give your students a short quiz covering
this definition.
Types of Information Systems
The Purpose of Information Systems
Automation systems use information technology to perform tasks or to make them
easier or less labor intensive.
Transaction Processing Systems (TPSs) process and record an organization's
transactions.
Transaction - a unit of business activity, such as purchasing a product, making a banking
deposit, or reserving an airline seat.
When viewing Figure 1-4, explain that if students are new to information systems,
they may relate information systems to transaction processing systems or
, accounting information systems (ie, bookkeeping). Explain that this is only ONE
purpose of information systems and many others are extremely useful and
important.
Management Support Systems (MSSs) supply information that managers need to make
decisions and coordinate their activities.
Emphasize that these information systems will be covered in detail during Chapter
8. It is important to explain, that the students will often hear the term Management
Information Systems (MIS) and that it is the same as MSS.
Within MSS are four specific systems which are defined next.
Management reporting systems provide information that low-level managers need to
make routine decisions.
Management reporting systems are the original MIS in providing scheduled,
preformatted reports to managers.
Decision support systems assist managers in making nonroutine decisions.
Groupware supports the group activities of managers and other workers.
Executive information systems provide the information that top executives need to
quickly identify problems, scan data for trends, communicate with employees, and set
strategic objectives.
The Scope of Information Systems
Individual information systems target a single person in the organization.
Ask students to give examples of their individual information systems.
Functional information systems or departmental information systems address the
needs of individual functions or departments.
Chapter 7 deals with this topic in depth.
Enterprise means a partnership, corporation, association, union, or any group of
individuals working together as an organization.
Enterprise information systems fully integrate the functions of a company or enterprise
and provide a single, comprehensive repository for its information.
Enterprise means the ENTIRE group, organization, or corporation. Today’s
information systems focus is on the enterprise.
Inter-organizational information systems are those that provide a common point of
interaction and common repository of information for a company, its suppliers, distributors,
customers, and/or shippers.
At this time, define a repository as a central holding place for information.
, Information Management in Today’s World
Succeeding in a Global Environment
Profiting from an Electronic Economy
Focusing on Performance
Total quality management (TQM) emphasizes responding to customers’ needs as a top
priority. They give workers more responsibility for making decisions and change the way
they perform work. TQM programs foster continuous improvement in both an
organization’s product and the processes for creating it.
Explain to students that TQM dates back to just after World War II when W.
Edwards Demming went to Japan to teach quality. This business process was
extremely popular in the late 1980’s.
You might ask the students to search the Web for one single definition of TQM and
see how many they actually come up with.
Supporting a Mobile Workforce
Telecommuters are mobile employees who rarely, if ever, visit their employers’ offices.
Building Individual Capabilities and Productivity
Knowledge workers—employees, such as engineers, accountants, lawyers, and technical
specialists, who have specialized skills and knowledge that allow them to function
effectively in today’s organizations.
The Manager and Information Management
Management refers to the process of achieving organizational goals by planning,
organizing, leading, and controlling organizational resources.
The Manager’s Job
While viewing Figure 1-5, ask the students their perceptions of managers where
they work. Do they appear to be productive or to not perform any “real” work.
The Strategic Focus of Top Management Teams
Planning and Implementation Needs of Middle Managers
Project managers typically supervise teams of workers who together must accomplish a
specific goal.
Today’s workforce is in demand for certified project managers. For more
information go to http://www.pmi.org
information management in a global economy
LEARNING OBJECTIVES
After completing Chapter 1, you will be able to:
Define information and discuss its role in organizations.
Identify the role of information technology in organizations.
Classify information systems according to their purpose and scope.
Identify five key issues in managing information in today’s organizations.
Describe managers’ use of information in their jobs.
Identify the information requirements for effective management.
Offer an approach to addressing ethical issues in information management.
Identify the four steps in the effective management of information.
What is Information Management?
What Is Information?
Data are fundamental facts, figures, observations, and measurement, without context or
organization.
Information is processed data—data that have been organized and interpreted, and
possibly formatted, filtered, analyzed, and summarized.
Knowledge is an understanding, or model, about people, objects, or events, derived from
information about them.
Wisdom is the ability to use knowledge for a purpose.
Ask students to give examples of data concerning their personal information, and
then give the same in information format. Emphasize that the terms Data and
Information cannot be used interchangeably.
Refer to Figure 1-1 to show the connection between Data, Information, and
Knowledge.
The Role of Information in Organizations
Information as a Resource.
Resources are inputs into the production of goods and services.
When referring to Figure 1-2, explain that money is not the only resource, but
others include people, raw materials (such as data), machinery and time. While
information is considered an asset, it cannot be listed on an accounting balance
sheet. Information is a product just as a piece of furniture and can be sold at a profit.
,Information as an Asset.
Information as a Product.
The Role of Information Technology
Use this section as an introduction to the learning for chapters 3 through 5.
Information technology (IT) includes computer hardware, software, database
management systems, and data communication systems.
Computer hardware refers to the equipment used in electronic information processing.
Today affordable desktop and portable computers can outperform the room-sized, million-
dollar computers of ten years ago.
Computer software provides the instructions, in the form of computer code and its
accompanying documentation, for processing data electronically.
Database management systems offer vehicles for storing and supporting the processing
of large quantities of business information, such as data on employees, products, customers,
and suppliers.
Data communication technologies, specifically company networks and the Internet, a
worldwide network of networks, have dramatically improved the communication of
information across small and large distances.
Managing Information with Information Systems
Information systems combine information technology with data, procedures for
processing data, and people who collect and use the data.
Refer to Figure 1-3 to explain to students that this definition is the cornerstone of
everything in this textbook. The students should be able to repeat the contents of
this figure and the definition without hesitancy.
In the next class period, you might want to give your students a short quiz covering
this definition.
Types of Information Systems
The Purpose of Information Systems
Automation systems use information technology to perform tasks or to make them
easier or less labor intensive.
Transaction Processing Systems (TPSs) process and record an organization's
transactions.
Transaction - a unit of business activity, such as purchasing a product, making a banking
deposit, or reserving an airline seat.
When viewing Figure 1-4, explain that if students are new to information systems,
they may relate information systems to transaction processing systems or
, accounting information systems (ie, bookkeeping). Explain that this is only ONE
purpose of information systems and many others are extremely useful and
important.
Management Support Systems (MSSs) supply information that managers need to make
decisions and coordinate their activities.
Emphasize that these information systems will be covered in detail during Chapter
8. It is important to explain, that the students will often hear the term Management
Information Systems (MIS) and that it is the same as MSS.
Within MSS are four specific systems which are defined next.
Management reporting systems provide information that low-level managers need to
make routine decisions.
Management reporting systems are the original MIS in providing scheduled,
preformatted reports to managers.
Decision support systems assist managers in making nonroutine decisions.
Groupware supports the group activities of managers and other workers.
Executive information systems provide the information that top executives need to
quickly identify problems, scan data for trends, communicate with employees, and set
strategic objectives.
The Scope of Information Systems
Individual information systems target a single person in the organization.
Ask students to give examples of their individual information systems.
Functional information systems or departmental information systems address the
needs of individual functions or departments.
Chapter 7 deals with this topic in depth.
Enterprise means a partnership, corporation, association, union, or any group of
individuals working together as an organization.
Enterprise information systems fully integrate the functions of a company or enterprise
and provide a single, comprehensive repository for its information.
Enterprise means the ENTIRE group, organization, or corporation. Today’s
information systems focus is on the enterprise.
Inter-organizational information systems are those that provide a common point of
interaction and common repository of information for a company, its suppliers, distributors,
customers, and/or shippers.
At this time, define a repository as a central holding place for information.
, Information Management in Today’s World
Succeeding in a Global Environment
Profiting from an Electronic Economy
Focusing on Performance
Total quality management (TQM) emphasizes responding to customers’ needs as a top
priority. They give workers more responsibility for making decisions and change the way
they perform work. TQM programs foster continuous improvement in both an
organization’s product and the processes for creating it.
Explain to students that TQM dates back to just after World War II when W.
Edwards Demming went to Japan to teach quality. This business process was
extremely popular in the late 1980’s.
You might ask the students to search the Web for one single definition of TQM and
see how many they actually come up with.
Supporting a Mobile Workforce
Telecommuters are mobile employees who rarely, if ever, visit their employers’ offices.
Building Individual Capabilities and Productivity
Knowledge workers—employees, such as engineers, accountants, lawyers, and technical
specialists, who have specialized skills and knowledge that allow them to function
effectively in today’s organizations.
The Manager and Information Management
Management refers to the process of achieving organizational goals by planning,
organizing, leading, and controlling organizational resources.
The Manager’s Job
While viewing Figure 1-5, ask the students their perceptions of managers where
they work. Do they appear to be productive or to not perform any “real” work.
The Strategic Focus of Top Management Teams
Planning and Implementation Needs of Middle Managers
Project managers typically supervise teams of workers who together must accomplish a
specific goal.
Today’s workforce is in demand for certified project managers. For more
information go to http://www.pmi.org
