Why Information is Managed/Importance of Management Information:
Managers have paid increasing attention to information management during recent years, for two main reasons. First, business activity has become increasingly complex. Second, the computer has acquired improved capabilities.
1. Increasing Complexity of Business Activity:
Business has always been complex but it is more so today then even before. All firms are subject to international economic influences and compete in a world wide market place, the technology of business is becoming more complex, the time frame for taking action is shrinking, and there are social constraints.
a. International Economic Influences:
Firms of all sizes are subject to economic influences that can originate any ware in the world. Such influences can be seen in the relative values of the currencies of each nation. Buyers make purchases in those countries where there currencies have the greatest value. (where input cost will be lower the buyer will make purchases in those countries.)
Many western firms have setup manufacturing plants in various parts of Asia and China to take advantage of lower level and overhead costs with obvious consequences for domestic manufacturers. The process is not just one way. For example, Japanese, Korean and American firms have established factories in the UK, making cars, television, computer, and domestic appliances in order to secure an entry into the profitable European market.
b. World Wide Competition:
Competition exists on a worldwide scale. The effect of the competition can be seen in the imports from foreign countries. All types of organization face greater competitive pressure. Consumer firm have worked especially hard to market global brands such as beverages like Pepsi and Coca Cola.
C. Increasing Complexity of Technology:
Examples of technology in business are seen like, bar code scanners in supper market, computer base airline reservation system, automated teller machine, and closed circuit camera. There is also much behind the scene technology that we do not see, for example, factory robots handling equipment, and automated trading. Firms invested in this technology so that they may perform there necessary operations.
d: Shrinking Time Frame:
All phases of business operations are performed more rapidly today ever before. Sales representatives engage in telemarketing to contact their customers within seconds by telephone, sales orders are transmitted electronically from one computer to an other, and manufacturers schedule raw material deliveries to arrive "Just in time".
e. The Virtual Work Place and Telecommunication:
The ability to work any where, with out regard to time and location, because of your knowledge of the various IT tools, that support the virtual workplace and telecommunication.
f. Increased Globalization:
Because of lower trade barriers, faster transport and communication, and the easier flow of capital effectively, there is a world market in manufactured and agricultural products and raw material, such as oil, coal, iron, tea, rice, etc. In addition, banking and financial services operation on an international scale.
g. Integrated Customer Service:
A multinational form is likely to have multinational customers and can provide all locations with the same level of customer service.
h. World Wide Roll Out Of Product and Services:
The firms can test products and services in one market and then roll them out around the world.
i. Subsidizing Markets:
The profit from country can be use to sponsor operation in an other.
j. Faster Pace:
The faster pace of society and business is apparent in many ways. New model of all types of manufactured goods have shorter life cycle, these in terms means that product development must also be speed up. The knowledge and training that people have, rapidly becomes obsolete because of changing requirements, existing work patterns and practices need to be update more or less continuously to keep pace.
2. Improved Computer Capabilities:
Today's user doesn't regard the computer as something special but as a necessary piece of office equipment, just like a desk, a telephone, etc. Not only are the computers available, the user know how to use them. Some of the capabilities which computer posses are as follow.
Computer provides the processing speed essential to our fast paced society. The speed of electronic computers is very fast because the signals can pass at the speed of electricity, which is same as the speed of light, thus millions of calculations can be done in a second, such speed are beyond the comprehension of the human brain. The quick service we have come to expect for bank withdrawals, stock quotes, telephone calls, and travel reservations, is made possible by computers. Business depend on the speedily processing, computers provides to handle high volume activities such as balancing ledgers and designing products.
b. Storage and Retrieval of Information:
Computer can store large amount of data, instructions and information on its internal memory or secondary storage devices and the same can be easily accessed and retrieved. The capability to store volumes of data is especially important in an information age.
Computers do not become bored or tired or lose concentration when performing highly repetitive jobs, unlike human beings. Every time same work is done with equal diligence (alertness, keenness) by the computer. In this way computers can increase productivity, especially where dangerous, boring, or routine tasks are involved. When computers move into business offices, managers expect increased productivity as workers learn to use computers to do their jobs better and faster.
d. Automatic Operation:
Computer cannot do any thing with out program. His predecessor instructs him via program. once data and program have been fed into the computer, operations of the computer are automatic as per the sequence or steps defined by the program.
Computer works very accurately and results are always same as per design. Errors can occur in a computer, but these are mainly due to human rather than technological weaknesses, that is, due to imprecise thinking by the programmer. A well - known term garbage in garbage out (GIGO) explains that, if you give inaccurate data to computers, it will give you inaccurate information.
Flexibility, versatility, and general purpose - ness, are the most wonderful things about computers. One moment it is preparing the results of particular examinations, the next moment it is busy in preparing expense report for the entire company, and in between, it may be helping and office secretary to trace an important letter in seconds. Buying a computer means you do not need to purchase a tape recorder, VCR, TV, VCD player, video games, fax machine, type writer calculator, dictionary, and so on.
Briefly, a computer is capable of performing almost any task provided that the task can be reduced to a series of logical steps.
g. Decision Making:
To make essential business and governmental decisions, managers need to take into account financial, geographical, and logistical factors. Using problem solving techniques, the computer helps decision makers sort things out, Analyze the implications and make better choices. Computer cannot make decisions itself but helps decisions maker with a lot of alternatives, choices, and options.
h. Cost Reduction:
Because it improves productivity and aids decisions making, th computer helps us hold down the cost if labor, energy, and paper work. As a result, computers help reduce the costs of goods and services in our economy.
i. No Feelings:
Computes are devoid (lacking , deficient, empty) of information. They have no feelings and instincts (inborn, inherent, and natural) because they are machine. Although men have succeeded in building a memory for the computer, but no computer possesses the equivalent of human heart and soul. based on our feelings, taste, knowledge, and experience, we often make certain judgments in our day to day life. But computer cannot make such judgments itself. There judgment is based on the instructions given to them in the form of programs that were written by us. They are only as good as man makes and uses them. Where you place the computer, it is happy there and never demand you to give him company offer tea, give lunch, and go to walk it.
j. No IQ.:
A computer is not a magical device. it can only perform tasks that a human being can. The difference is that it performs these tasks with enormous speed accuracy. It possesses no intelligence of its on. Its I.Q. is zero, at least till today. It has to be told what to do and in what sequence. Hence, only the user can determine what tasks a computer will perform. A computer cannot take its on decision in this regard. It is also an advantage because in this way it is our obedient servant and you cannot find so obedient fellow in this world.
These are some factors shaping today's new business environment, therefore, the success of an organization may depend on its management of information.