398 CHAPTER NOTES 08 IT

398 CHAPTER NOTES 08 IT - CHAPTER EIGHT INFORMATION...

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CHAPTER EIGHT INFORMATION TECHNOLOGY AND CONTROL CHAPTER OVERVIEW Chapter eight describes the evolution of information technology, how it can provide a strategic advantage, and examines the ways it affects organization design and interorganizational relationships. With managers spending 80 percent of their time exchanging information, it is important to understand how knowledge management can be used to leverage professional knowledge through organizing, sharing, and using information effectively. Given the number of people who routinely use the Internet for commercial purposes, the balance of power has shifted to the customer. Planning horizons have become shorter, expectations of customers change rapidly, and new competitors spring up rapidly. These changes require quality information at the fingertips of managers and employees. Information Technology Evolution Initially information technology was used for transaction processing systems , which automated the organization’s routine, day-to-day business transactions. Data warehousing combines all of a company’s data to allow users to access the data directly. Software for data mining helps users by using sophisticated decision-making processes to search raw data for patterns and relationships that may be significant. Information for Decision Making and Control A management information system provides information for managerial decision making through its support by the organization’s transaction processing systems and internal as well as external databases. Organizational Decision-Making Systems An information reporting system provides mid-level managers with reports that summarize data for day-to-day decision making on issues such as production scheduling. An executive information system converts complex data into pertinent information for top management to have rapid access to key decision making information such as worldwide customer buying trends. A decision support system relies on decision models and integrated databases so users can pose a series of what if questions to test alternatives. Feedback Control Model
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398 CHAPTER NOTES 08 IT - CHAPTER EIGHT INFORMATION...

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