Information Technology and Management

Information technology and the way it is utilized is an important key to managerial performance in this new world. We live and work at a time when computers make more formation about more things available to more people more quickly than ever before. The question is: How well do we take advantage of it?

Peter Drucker, a late management scholar and consultant once said that in our ITdriven economy - the productivity of knowledge and knowledge workers is the decisive competitive factor. Thus, it depends on two must have competencies: 1. Computer Competency the ability to
understand computers and to use them to their best advantage. 2. Information Competency the ability to utilize technology to locate, retrieve, evaluate, organize, and analyze information for decision making.

How Information Technology Changes Organizations

Organizations are changing as continuing developments in information technology exert their influence. Information technology is changing organizations by breaking down barriers within organizations, this means that people working in different departments, levels, and physical locations can more easily communicate and share information.

IT plays an important role in customer relationship management by quickly and accurately providing information for decision makers regarding customer needs, preferences, and satisfactions. Information systems use IT to collect, organize, and distribute data for use in decision making. Management IS meet the specific information needs of managers as they make a variety of day to day decisions.

Roles of Managers as Information Processors

Data are raw facts and observations. Information is data made useful and meaningful for decision making. The management process of planning, organizing, leading, and controlling is ultimately driven by information, not by data alone. Information that is truly useful meets the test of these five criteria: 1. Timely the information is available when needed. 2. High quality the information is accurate and it is reliable.

3. Complete the information is complete and sufficient for the task at hand. 4. Relevant the information is appropriate for the task at hand. 5. Understandable the information is clear and easily understood by the user.

a. Planning advantages better and more timely access to useful information, involving more people n the planning process. b. Organizing advantages more ongoing and informed communication among all parts, improving coordination and integration. c. Leading advantages more frequent and better communication with staff and diverse stakeholders, keeping objectives clear. d. Controlling advantages more immediate measures of performance results, allowing real-time solutions to

Information and Managerial Decisions

As managers use information to solve a continuous stream of daily problems, the most obvious problem situation is a performance deficiency. Another important problem situation emerges as a performance opportunity. The challenge in dealing with any performance deficiency or performance opportunity is to proceed with effective problem solving.

It is the process of identifying a discrepancy between an actual and desired state of affairs and then taking action to resolve the deficiency or take advantage of the opportunity. A decision, to be precise, is a choice among alternative possible courses of action.

Types of Managerial Decisions

Programmed decisions use solutions already available from past experience to solve structured problems ones that are familiar, straightforward, and clear with respect to information needs. Managers must also deal with new or unusual situations that present unstructured problems full of ambiguities and information deficiencies. These problem require nonprogrammed decisions that craft novel solutions to meet the demands of the unique situation at hand.

An extreme type of nonprogrammed decision must be made in times of crisis the occurrence of an unexpected problem that can lead to disaster if not resolved quickly and appropriately. For these and other reasons, many organizations are developing formal crisis management programs. Anticipation is one aspect of crisis management, preparation is another. People can be assigned ahead of time to crisis management teams and crisis management plans can be developed to

Six Rules for Crisis Management 1. Figure out what is going on. 2. Remember that speed matters. 3. Remember that slow counts too. 4. Respect the danger of the unfamiliar. 5. Value the skeptic. 6. Be ready to fight fire with fire.

Decision Environment

Certain Environment - Offers complete information on possible action alternatives and their consequences. Risk Environments - Lacks complete information but offers probabilities of the likely outcomes for possible action alternative. Probability is the degree of likelihood that an event will happen. Uncertain Environment - Lacks so much information that is difficult to assign probabilities to the likely outcomes of alternatives. - Requires unique, novel, and often totally innovative alternatives.

Problem Solving Styles Problem Avoiders - Ignore information that would otherwise signal he presence of an opportunity or performance deficiency Problem Solvers - Willing to make decisions and try to solve problems, but only when forced to by the situation. Problem Seekers - Actively process information and constantly look for problems to solve or opportunities to explore.

- Proactive and forward thinking - Anticipate problems and opportunities, and take appropriate action to gain the advantage Systematic Thinking - Approaches problems in a rational and analytical fashion. - Involves breaking a complex problem into smaller components and then addressing them in a logical integrated fashion.

Intuitive Thinking - Approaches problems in a flexible and spontaneous fashion. - Allows a person to respond imaginatively to a problem based on a quick and broad evaluation of the situation and the possible alternative courses of action. Multidimensional Thinking - Ability to view many problems at once. Strategic Opportunism(Daniel Isenberg) - Focuses on long-term objectives while being flexible in dealing with short-term problems.

Decision-Making Process

Decision-making Process - Begins with identification of a problem and ends with evaluation of implemented solutions. 1. Identify and define a problem - Stage of information gathering, processing, and deliberation 3 common mistakes a. Defining the problem too broadly or too narrowly. b. Focusing on symptoms instead of causes. c. Choosing the wrong problem to deal with.

2. Generate and evaluate alternative solutions - Assemble the facts and information that will be helpful for problem solving Cost benefit analysis - Involves comparing the costs and benefits of each potential course of action. Criteria for evaluating alternatives: Benefits: What are the benefits of using the alternative to solve a performance deficiency or take advantage of an opportunity?

Costs: What are the costs of implementing the alternative, including resource investments as well as potential negative side effects? Timeliness: How fast will the benefits occur and a positive impact be achieved? Acceptability: To what extent will the alternative be accepted and supported by those who must work with it? Ethical soundness: How well does the alternative meet acceptable ethical criteria in the eyes of the various stake holders?

3. Decide on a preferred course of action - Point of choice where an actual decision is made to select a preferred course of action. Classical decision model - Describes decision making with complete information. Optimizing decision - Chooses the alternative giving the absolute best solution to a problem. Behavioral decision - Limited information and bounded rationally.

Satisficing decision - Chooses the first satisfactory alternative that comes to ones attention. 4. Implement the decision - Once a preferred solution is chosen, actions must be taken to fully implement it. Lack-of-participation error - Failure to adequately involve in the process those persons whose support is necessary to implement the decision.

5. Evaluate results - Form of managerial control - Involves gathering data to measure performance results against goals and consider both the positive and negative outcomes.

Decision- Making Errors and Traps

Availability Heuristic -strategies for simplifying decision making Representativeness Heuristic -occurs when people assess the likelihood of something occurring based on its similarity to a stereotyped set of occurrences. Anchoring and Adjustment Heuristic -involves making decisions based on adjustment to a previously existing value or starting point. Framing Error -solving a problem in the context perceived.

Escalating Commitment -continuation of a course of action even though it is not working. How to avoid escalation trap decision making: 1. Set advance limits on your involvement and commitment to a particular course of action. 2. Make your own decisions. 3. Carefully assess why you are continuing a course of action

4. Remind yourself of what a course of action is costing. 5. Watch your escalation tendencies in your behaviors and of others.

Individual and Group Decision Making

Advantages of group decision making -make greater amounts of information, knowledge, and expertise available to solve problems. -expand the number of action alternatives that are examined. Potential disadvantages of group decision making -social pressure to conform -some may feel intimidated or compelled to go along the apparent wishes of others. -minority domination

Ethical Decision Making

Gerald Cavanaugh 1.Utility: Does the decision satisfy all constituents or stakeholders? 2.Rights: Does the decision respect the rights and duties of everyone? 3.Justice: Is the decision consistent with the canons of justice? 4.Caring: Is the decision consistent with my responsibility to care?