Unit-02-Management Information System from Managerial Outlook Structure: 2.1 Introduction Objectives 2.

2 The Managers Job in a Global Environment 2.2.1 Management and Managers 2.2.2 Information and Levels of Management 2.2.2.1 Information needed by different levels of management 2.2.3 Information Required for the Process of Management 2.2.3.1 Functions of Managers 2.2.4 Self Assessment Questions (for section 2.2) 2.3 Functional Information Needs 2.3.1 Accounting 2.3.2 Finance 2.3.3 Marketing 2.3.4 Operations 2.3.5 Human Resources 2.3.6 Self Assessment Questions (for section 2.3) 2.4 Summary 2.5 Terminal Questions 2.6 Multiple Choice Questions 2.7 Answers to SAQs, TQs and MCQs 2.1 Introduction

With this unit, we shall begin with management and managers. Then discuss the various levels of management and their information needs, the functions performed by managers. We shall conclude by functional needs of information in the areas of accounting, finance, marketing, operations, and human resource management. Objectives: At the end of this unit, you should be able to Mention various levels of management and their needs for information Explain the functions of manager Bring out the information needs in the various functional areas 2.2 The Managers Job in a Global Environment 2.2.1 Management and Managers Management is the process of achieving organizational goals by planning, organizing, leading, and controlling organizational resources. What does a typical manager's job look like, and what information does he or she need to perform that job? Managers face a variety of challenges in performing their work in a global environment. They must deal with increasing competition, decreasing resources, and rapidly changing technology. They must understand and respond to dramatic cultural differences, imposing legal constraints, and dynamic customer requirements. Managers at all levels cope with less-than-perfect information in an uncontrollab1e environment. For example, managers at companies doing business in the former East Germany after the fall of the Berlin Wall initially experienced repeated difficulties with telephone service, which caused significant problems with voice communication and data processing. Top executives attempt to analyze the economic, political, and technological aspects of the environment and plot a strategy to meet such changes. Often, however, they cannot anticipate changes in money rates, political upheavals in distant locations, or the speed of technological advancement. Middle-level managers may have information about production deadline forecasts, or hiring practices that proves to be unreliable or dynamic and that requires to handle emergencies, reconsider the best way to perform their jobs, or change the priorities in unexpected ways. Dealing globally increases the likelihood that managers will have unreliable information and intensifies any existing deficiencies in the information h both distance and cultural diversity affects information quality. First-line supervisors may experience delays in receiving up-to-date information from their bosses who must directives from a distant corporate headquarters. How do managers perform effectively such conditions? Managers perform a great quantity of work at an unrelenting pace. This level of activity involves a manager's continually seeking and then quickly processing large amounts of information, generally without time for leisurely reflection. Managers also participate in a variety of brief activities that result in significant fragmentation of their time. They become accustomed to the

rapid exchange of information with others and hence must have the needed information readily available. Because time is precious and managers tend to deal with issues that are current and specific, they seek ways to secure information as efficiently as possible. 2.2.2 Information and Levels of Management 2.2.2.1 Information needed by different levels of management Managers at different hierarchical levels in the organization have special concerns. At the highest level, managers are concerned with setting long-term goals and directions for the organization. At the lowest level, managers are concerned with supervising the conduct of day-to-day activities. As one moves up the corporate ladder, decisions have a longer term and wider ranging impact on the organization. These differences affect the characteristics of managers' information needs. At all levels managers cope with less-than-perfect information in an uncontrollable environment. They use information systems to help them bring as much order and completeness to the available informal possible. Executive Management Top-level managers establish the overall direction of an organization by setting its strategy and policies. They may decide that cost cutting requires reducing the number of employees or that introducing a new product line calls for hiring more workers. They typically develop, a mission, reflected in a mission statement that defines the basic character and characteristics of the organization, that is, who the organization is, why the organization is in business, and what the organization is in the business to do. These executives also develop pre and activities in line with stated profit or service objectives. Top executives typically have both an internal and external orientation: They must that work gets done within their particular subsidiary or division while they interact with executives in other organizations and with the general public. Increasingly, such interactions span regional and national boundaries, requiring executives to have large repositories of information about an array of global issues. They may need to know the cost of labor in Taiwan and zoning laws in Detroit. Top executives may also spend large amounts of time in ceremonial roles, representing their company to the public. They must have knowledge of the customs and rituals of different cultures to perform these responsibilities effectively. What types of information do top-level managers typically need? Top executives often need performance-related information about results of various divisions or product groups: they may require summary data about sales, production levels, or costs to assess the organization's performance. Top executives also use information about new technology, customers, suppliers, and others in the industry to gain a competitive advantage over other firms. As organizations increase their international focus, top executives require economic, legal, and cultural information about other countries in which the organization operates. Top-level managers may combine these various types of information to formulate a strategy for the organization and a plan for implementing it. Of course, they never have complete information and try to use the available information as effectively as possible.

Consider the job of a senior marketing manager in the hair-care products division of a large company. She must determine the best mix of products for the company, authorize advertising and marketing research expenditures, and supervise a staff of managers responsible for accomplishing the department's goals. What types of information might she require? Now compare her information needs with those of a senior financial manager or even with those of a senior marketing manager in a computer software firm. Clearly these three managers have some needs in common, but they also have needs unique to their job, organization, and industry. Diagnosing the particular information needs of senior executives requires tracking their organizational and job goals and then assessing the information that help accomplish those goals. Middle Management Unlike top executives, middle managers focus primarily on implementing the policies and strategies set by top management. Plant managers, regional sales managers, directors of staffing and other middle managers usually deal with internal organizational issues, such finding ways to increase productivity, profitability, and service. Middle managers must meet production schedules and budgetary constraints while still acting independently. They all participate actively in various personnel decisions, including the hiring, transfer, promotion or termination of employees. Middle managers serve as the interface between executives at first-line supervisors: They disseminate top management's directives to lower levels of organization and communicate problems or exceptional circumstances up the hierarchy. They may work in the home country or abroad, directly managing one or more work teams, coordinating interdependent groups, or supervising support personnel. Middle managers require more detailed information than executives do about the functioning of the groups or workers they supervise, although generally they do not require as detail information as a first-level supervisor requires. Often middle managers need detailed but data, extensive information about workers' performance, schedules, and skills, and data about their group's products or services to perform their jobs well and to ensure that their work group focuses on organizational goals. Often they cannot obtain perfect information must use the best information they can secure. Middle managers who act as project managers might be responsible for one or more unique projects, such as the development of new spreadsheet software or a new computer chip, or ongoing projects, such as the provision of accounting services to a small business. Project managers typically supervise teams of workers who must accomplish a specific goal. Organizations consist of multiple, overlapping teams, only some of which are formally recognized by group or departmental boundaries. The manager must ensure that the project team works together effectively toward its common goal. The manager must know each team members job responsibilities as well as the member's skills, abilities, and knowledge. The manager must also have information about the individuals, group, organization, and its environment to help in leading, motivating, resolving conflicts, and coordinating activities. Middle managers might also serve as links between their own work groups and others in the organization. Occasionally these links may extend beyond local or regional boundaries, posing additional challenges for the manager. The middle manager, too, might require special

knowledge about managing a multicultural workforce or conducting business internationally. DuPont, for example, charged five managerial teams around the world with ensuring employee retention in their areas; they use conferencing by telephone to share ideas. First-line Supervision First-level managers have the most direct responsibility for ensuring the effective conduct of their organization's daily activities. The supervisor of long-distance telephone operators handles any problems that arise in servicing customers; the customer services manager in an insurance company oversees the interactions between customer service representatives and policy holders. Such supervisors might plan work schedules, modify a subordinate's job duties, train a new worker, or generally handle problems employees encounter. They ensure that their subordinates accomplish their daily, weekly, and monthly goals and regularly provide workers with feedback about their performance. They screen problems and may pass particularly significant, unusual, or difficult problems to middle managers for handling. First-line supervisors also spend large amounts of time in disturbance-handling roles, such as replacing absent workers, handling customer complaints, or securing repairs for equipment. They, too, may experience imperfections in the information they receive; they must recognize these deficiencies and respond accordingly. Consider the night-shift nursing supervisor in the pediatrics ward of a hospital. What information must she have to perform her job? Certainly she requires detailed information about pediatric nursing procedures, knowledge about the skills of the nurses on the shift, and detailed listings of the nursing services required for each patient. If the staff is unionized, she should also know the provisions of the union contract. The head nurse might also require information about daily and vacation schedules as well as the ability to secure temporary employees. She should have a basic knowledge about the equipment on the floor as well as how to obtain repairs for it. What information does she need to solve an understaffing or absenteeism problem? Does she need the same information to answer questions about administration of medications or delivery of meals to patients on the floor? The nightshift supervisor in a manufacturing plant might require comparable information about the tasks, workers, and equipment. Of course, the specific details will differ as a function of the setting. Both the nursing supervisor and the plant supervisor may encounter special problems that require unique information. Diagnosis of information needs must be ongoing and responsive to the particular situations these managers face. 2.2.3 Information Required for the Process of Management Collecting and disseminating information serve as the cornerstone of management activity. The manager gathers information from the environment inside or outside the organization. He or she reviews written information about the company and its industry, attends meetings that present information about the organization, or participates in task forces or committees that provide additional information about organizational functioning. What specific information might the new manager of a neighborhood restaurant seek? What information might the manager of customer service monitor in the organization or the environment? Monitoring the environment provides particular challenges for the global manager, who must scan worldwide for large amounts of diverse information. Having collected information about the organization's

functioning, the manager then disseminates it to subordinates, peers, supervisors, or individuals outside the organization. Such distribution may occur in face-to-face conversations, through electronic media, or at meetings. The manager must have information about the environment in which the organization functions; this information may include data about industry trends, technological developments, and market requirements. The manager should also have a strong knowledge of organization-its structure, goals, resources, and culture. The manager should know the needs of various organizational members so that he or she can choose the most appropriate information to convey and the most appropriate way to disseminate it. For example, the man may give bad news to subordinates and superiors in different ways. At the same time manager must consider his or her own information needs in performing the four basic management functions of planning, organizing, leading, and controlling. 2.2.3.1 Functions of Managers Planning Managers engage in a variety of planning activities that occur over short- medium and long-term periods. Driven in part by the need to respond to competition, the changing environment, and customer demands, managers develop the organization's mission: goals and the means to accomplish them. Planning usually refers to both the specific of goals and the blueprint for achieving them. It can occur at the individual, group, organizational, or extra-organizational level. Managers may engage in strategic, tactical, or operational planning. They also engage in decision making, in which they allocate resources and act as negotiators, problem solvers, change agents, and disturbance handlers. The top managers at LIC of India, for example, likely decide which insurance products and how to sell them as part of their strategic planning the long-term planning for accomplishing the organization's mission. Information about LICs capabilities, its competitors' competencies, and customer demands is essential for determining the organization's goals and its strategic planlong-term activities the organization must undertake to accomplish its mission. Knowledge about technological developments and their applicability to the insurance company, as well as about the supply of various types of workers, constitutes additional information incorporated into the strategic plan. In most organizations middle managers more often engage in medium or short-term planning known as tactical planning. Tactical objectives describe what units within an organization must do to accomplish strategic objectives, and tactical plans refer to the steps for attaining the tactical objectives. Tactical plans may focus on decisions about staffing, advertising, and pricing, for example; or they may reflect other financial, marketing, or human resource decisions. What types of information would a manager need to determine the best advertising campaign for his or her products? The manager might need to know what competitive products exist, the nature of advertising for those products, and the cost of various media.

Operational planning, or planning for the issues of implementation, often accompanies strategic and tactical planning. The public works director of a small town must plan the monthly work schedules for the road crews she supervises. The shipping supervisor in a large manufacturing company must determine how often to schedule a third shift of workers. The program chairperson must schedule the particular events that compose the national meeting of the Academy of Management. In each case, these managers require an array of information about their subordinates, their clients, and their jobs to design the operational plan. What information does the public works director need, for example, to meet the objective of rescuing people as the level of water is raising in the river due to continuous rainfall? She needs to know the availability of crews equipment, and the possibility of additional rainfall.

Managers at various levels determine the best way to reduce costs. A manager determines the assignment of people to tasks, the allocation of money materials to individuals, departments, and other work groups, and the scheduling of various organizational members' time. Effective allocation requires the manager to have information about individuals' existing work assignments, capabilities, and vacation schedules. The manager must also know the costs of various projects or products. Consider the situation face, the manager of a product development team for a new shampoo at Procter and Gamble or she must know how much overtime to budget into labor expenses to ensure a timely product launch. Managers frequently negotiate with their subordinates or other managers about the allocation of resources or the best way to accomplish various group or organizational goals. In conjunction with resource allocation and negotiation, the manager as a problem solver defines problems in a situation, analyzes them, and then proposes solutions. When the problems can be handled in a relatively long time frame, the manager acts as a change agent. When problems must be solved in a short time frame, the manager engages in disturbance handling. To plan effectively, managers often need forecasts about likely future conditions. For example, prevailing interest rates may affect whether a company should raise cash through the sale of debt or equity. The timing of a company's plant opening can affect whether the company will purchase a component of its product from a wholesaler or whether it will manufacture the component itself. The forecasted market share of a competitor's produce should influence a company's production levels and possibly affect hiring and capacity decisions. No manager can be correct 100 percent of the time. Part of decision making involves assessing the risks of being wrong versus the rewards of being right. Managers may cushion the impact of incorrect foresight with contingency plans. Nevertheless, managers can increase their chances of correctly assessing future conditions by using quality forecasts.

Planning in organizations that function globally may pose special challenges. Managers may need to account for significant currency fluctuations, unpredictable political conditions or an unknown labor pool; they may need to consider variations in national customs, worker expectations, and product acceptance. Consider the information needs of a manager who must close the company's manufacturing plants in a foreign country. He or she must know, for example, the legal provisions that govern the sale of assets as well as the legal regulations for compensating terminated workers. The information needs of global managers in these circumstances are extensive and particular to the special business problems they must solve. Decision making also involves significant information needs. Managers require information about individuals, groups, and organizations involved in or affected by the problem situation. They need information about the alternatives available and the costs and benefits associated with each. Managers as change agents also need data about workers' and management's attitudes toward change, the resources available for the change, and the consequences of similar changes in other situations. Managers should diagnose each decision situation to identify its unique information needs. Consider the decision that a manufacturer of outdoor clothing must make about whether to purchase a small manufacturing plant in China. What information does the manufacturer require in order to make that decision? What information does this manager need in order to make a quality decision? Managers must diagnose their information needs in each particular situation and then seek ways to obtain the required data. Organizing Managers must structure their organization and coordinate the organization's resources to accomplish its goals. Organizing generally means establishing a formal reporting structure and a system of accountability among workers; it means forming employees into meaningful work groups with appropriate supervision. Defining the hierarchy of authority determining the location of decision making, and providing for coordination all contribute to the organizing process. Firstline supervisors and middle managers generally establish a network of contacts within and even outside the organization to gather information. The manager may use interactions with coworkers or colleagues in other organizations to improve their job performance. Managers at all levels attempt to build effective work teams by encouraging cooperation and handling conflict that arises. Managing work groups generally calls for the open exchange of information and ideas. Managers and workers may jointly develop group goals congruent with organizational goals and orchestrate collaborative activities. Increasingly managers must supervise multicultural teams of workers; managing these heterogeneous groups requires special information about the impact of cultural differences on job performance and the techniques for handling them. Managers need to know the status of group activities so that they can modify schedules and resource allocations. Group members must receive and share information about the status of their activities and thought processes. Organizing effectively requires information about the content of jobs, the skills of workers, and the availability of resources in the organization.

Managers must also understand the assets and liabilities of various structural forms, such as functional structures, project structures, alliances, or networks. The options for organizing become increasingly complex as managers deal internationally. Securing sufficient and appropriate information to coordinate globally challenges managers to diagnose their information needs effectively so that they do not obtain too much, too little, or irrelevant information. Leading Leading generally refers to taking actions that direct and motivate employees to accomplish personal and organizational goals. Top executives, middle managers, and first-line supervisor help subordinates develop the skills, knowledge, materials, equipment, and time to perform their jobs. They offer guidance to subordinates about the best way to perform various job related activities. Managers also evaluate their subordinates, and sometimes even peers and superiors, as part of their leadership responsibilities. The manager acquires information about how individuals view the goals the manager has set and seeks information about what would encourage subordinates to accept these goal and work hard to achieve them. What information does a manager need to handle the problem of a poorly performing worker? The manager might need data about the employee's skill level and attitude, the job's requirements, and any job-related goals set. The manager might also need information about unusual factors, such as family illness or defective equipment that might have affected the worker's performance. The manager might also need information about training programs in which the worker has participated. Subordinates also acquire information about how the manager perceives their efforts and adjust their performance and priorities accordingly. In many organizations, formal human resource management systems provide mechanisms for this feedback. What types of information do managers require in order to lead effectively? They first need a clear understanding of the organization's goals and of their responsibilities for accomplishing them. They also benefit by having information about their boss's needs and goals. Managers need data about the skills, abilities, knowledge, needs, and experience of subordinates; they must also regularly secure information about their subordinates' performance. Managers must also have a comprehensive understanding of the situation to select the most appropriate leadership style for influencing workers to perform effectively. Researchers suggest that they need information about workers' needs and maturity, the leader's relationship with the subordinates, the task's structure, the organization's structure, and the organization's environment. What information needs are inherent in the interpersonal roles required for leading? Managers must know the nature of the tasks being performed, the expected standards of performance, and the potential barriers to their accomplishment. They must also have detailed information about the skills, experiences, and expectations of the workers they supervise. In addition, managers must have information about colleagues from whom they might gather information for the organization, listings of professional organizations, and data about colleagues employed by competitors. Effectively motivating and developing subordinates as well as influencing others and building relationships likely require extensive situation specific information that a manager should diagnose. Managers also should diagnose the information required to solve employee-

related problems. Effectively leading a multicultural workforce creates both specific and generic information needs for managers functioning in the global arena. Controlling Managers must also monitor the quality and impact of managerial actions. Controlling means ensuring that performance meets established standards, that workers' activities occur as planned, and that the organization proceeds toward its established goals. Controlling, requires comparative information about the optimal way to implement organizational processes and their actual implementation. In the control process, managers establish standards and methods for measuring performance, assess performance, and then compare performance with the standards. They require information about the organization's functioning to help them anticipate and handle organizational problems and challenges. Managers commonly use information provided in budgets and financial controls to guide and constrain organizational activities. They also use cost information to maintain profitability. Executives at Russell Reynolds Associates, Inc., an executive search firm with offices worldwide, determined that top management required consistent and more detailed information from all offices. The director of international finance there led a design project that resulted in standard accounting procedures that conformed to USA, and international regulations. 2.2.4 Self Assessment Questions (for section 2.2) 1. Explain the various information needed by the managers in the organisation 2. What are the various functions performed by the manager. 2.3 Functional Information Needs Managers require a broad range of information to perform their day-to-day functional roles. Diagnosing information required to perform specific functional activities is an early step in effective information management. In this section we discuss examples of information needs in the areas of accounting, finance, marketing, operations, and human resource management; these functional areas are not intended to be exhaustive but to portray commonly occurring functional needs. 2.3.1 Accounting Accounting is the process of recording, classifying, and summarizing the financial activities of an organization. Originally used to create a historical record of the firm, managers now regularly use accounting information in making decisions. Financial accounting deals with preparing accounting information for users outside the organization, such as regulatory bodies, investors, shareholders, and tax assessors. Managerial accounting refers to the provision of financial information that managers within the organization need for their decision-making. Accounts receivable, accounts payable, payroll, fixed asset management, and general ledger describe types of accounting information, as shown below.

Types and Examples of Accounting Information Accounts Receivable Names and addresses of customers Invoice information Amounts owed Due dates Discounts available Accounts Payable Names and addresses of suppliers Invoice information Amounts owed Due dates Discounts available Payroll Labor rates Hours worked Employee benefit classifications Withholding rates and amounts Fixed Asset Management Properties owned Depreciation schedules Depreciation taken Mortgage/rental renewal dates General Ledger Transaction type and amount

 Account codes affected Account balances Managers working in the functional area of accounting must keep track of money owed to the organization. They require data about unpaid invoices, payments against these invoices, payment histories of customers, and additional credit information that helps managers decide how much credit to extend to customers. For companies such as utilities that have many customers and operate largely on credit, accounts receivable management is crucial not only for generating collections but also for addressing customer questions. Accounts receivable systems generally include such accounting information. Managers in the accounting function must also monitor money owed by their organization. Such tracking requires detailed data about bills received from suppliers and other creditors as well as information necessary for approval of the payment of such bills. At many companies, for example, a supplier's bill must match an outstanding purchase order, which authorizes the purchase, and a receiving document, which verifies receipt of the purchased goods. Managers must also have access to information that helps them time payments, allowing them to benefit in the tradeoff between taking early-payment discounts and retaining sufficient cash in the organization. Managers also need information about checks written so that they can determine the amount still owed and respond to questions from suppliers. Accounts payable systems perform many of these functions for determining the money the organization owes to individuals or other organizations. Accounting managers must also maintain and have access to employee information and tax information necessary to pay employees. Accounting managers and staff must know employees' pay rates, deductions, tax withholdings, vacations, and hours worked so that the organization can generate payroll checks and forms for government taxing bodies. Managers must also know the value of an organization's assets. Because many assets depreciate, or lose value, over time, the value of the organization that owns them will change as well; such changes typically have consequences for the price of stock in the company. In addition, organizations may keep funds that are used to renew or replenish the value of such assets; managers should know the availability of such funds. Fixed asset systems organize the information about a firm's assets and any funds maintained for their renewal. Top executives, particularly the corporate controller, must have up-to-date information about the organization's profit or loss to help determine the company's financial worth. They must be able to classify expenses and revenues in ways that allow managers to attribute profits and losses to departments or individual products. General ledger systems use information generated by accounts payable, accounts receivable, payroll, and fixed asset systems to provide such profit and loss information. Managers also use the information generated by general ledger systems to plan their expenses and revenues for the future, a process called budgeting. Managers in global organizations face peculiar information needs in their accounting practices because the relative value among the currencies of different countries changes constantly.

Managers may need access to data from uniquely international sources of information, such as bills of exchange. As a result, global accounting systems offer this information as well as information about the amount, nature, and origin of financial transactions. In addition to these generic information needs, accounting managers may have a set of needs specific to their job responsibilities and particular situations. Increasingly, managers require unique accounting information for various customer markets. At Johnson Wax, for example, managers in Johnson's Consumer Products Worldwide Innovation and Worldwide Service divisions discovered they needed information for their special financial environments. IS Diagnosing these needs involves clearly specifying the problems or issues and the information required to deal with them. 2.3.2 Finance Financial managers focus their activities on the acquisition and use of money. They periodically estimate the flow of funds into and out of the business, continuously monitor the use of funds within the organization, identify and evaluate alternative sources of outside funding, and describe and assess alternative uses of excess capital. Managers in global companies also use information about exchange rates and currency futures to keep their cash and or assets in countries where they have the greatest return or the least depreciation. Managers use financial information for both planning and control. They need to know the financial position of their company before they can make decisions about how to allocate financial resources. They create budgets for each function of the company based on such factors as the company's financial status, the history of spending in prior years, operation plans and priorities, forecasts of revenue, and projections of cash flow. At the department level, first-line supervisors or middle managers create budgets in a similar fashion; senior management then uses the departmental budgets in its development of a corporate budget; departmental managers, in turn, modify their original budgets to reflect the parameters of the corporate budget. In the General Foods' Corporate Financial Planning and Control department for example, managers supervised analysts who used microcomputers to consolidate financial data from 17 worldwide divisions and then report the data to upper management for use. If, Reebok, Inc. wants to shorten the time required for closing its books so that finance department can spend more time in data analysis for managerial improvements. Analytical computer systems support diverse types of investment management. Portfolio accounting systems provide both inventories and analyses of diverse types of assets. Financial managers must continuously diagnose the specific information they require for performing their job responsibilities and dealing with problem situations. 2.3.3 Marketing Marketing is a social process involving the activities necessary to enable individuals and organizations to obtain the products and services they need and want through exchanges with others. The concept of marketing derives from the idea of a marketplace where buyers and sellers meet to trade their goods and services for money or other goods and services. Marketing managers seek to ascertain consumers' needs and preferences. This knowledge helps them guide product development, distribution, pricing, presentation, and

promotion so as to maximize the appeal to the consumer of an organization's products and services. Marketing managers also use sales information to improve interactions with suppliers as well as monitor business performance. Marketing activities that offer potential for decision support systems include sales forecasting, budgeting, pricing, and product design. Examples of information used by the marketing function is shown below. Types and Examples of Marketing Information Market Research Product evaluation surveys Results of test market promotions Coupon usage data Lists of consumers of related products Promotion Impact of past advertising promotions Price of advertising by medium Impact of shelf space and placement Sales and rebates offered by competitors Pricing Impact of price and volume changes on profit Price elasticity of product Price/performance curves for similar products Market segmentation information Product Design Engineering drawings and mock-ups Packaging alternatives Distribution Channel Development

 Relationships with distributors Franchising laws and regulations Market Intelligence Competitors' activities and strategies Information about new and existing products Market research is the process of gathering information about what consumers want and need. Marketing managers and their market research staff monitor what consumers buy; relate buying patterns to consumer characteristics such as income, family size, and geographic location; conduct surveys about hypothetical or real products; and test consumer responses to price, packaging, or other product or service characteristics. Managers can also purchase market research information from market research firms. For example, Nielsen, a division of Dunn & Bradstreet, and the Arbitron Company sell information about what consumers watch on television; such information can help managers decide whether to purchase air time to advertise a particular product. Managers also use information generated by market research to support product design and manufacturing decisions. Marketing may include additional activities, such as planning and budgeting for advertising, participating in product design, and forecasting future trends. Each of these has associated information needs. Marketing managers must diagnose the information they need to handle particular marketing problems. 2.3.4 Operations Operations management refers to the processes of planning, organizing, directing, and controlling the physical operations of an organization. By operations, we mean the transformation of an organization's resources into the goods and services that are its sources of revenue. Operations can encompass both manufacturing and the provision of services. Manufacturing managers need information that will allow them to integrate manufacturing with customer service and sales, control systems, back-office operations, and engineering. For example, systems that take electronic orders and use them to automatically trigger the manufacturing process will become much more common. Increasingly, manufacturing also requires information to incorporate into quality programs. Other systems integrate engineering data into the management process. The physical operations of a manufacturing organization include not only the manufacturing process, but also the processes of transporting and warehousing and the process in which finished goods or services are exchanged for money. The factory of the future may combine services with products, causing manufacturing managers to have more direct contact with customers. This contact will expand their information requirements to include data about customers and their needs. Group Technologies, a maker of electronic components in Tampa, requires weekly updating of customer requirements and uses these to effectively schedule production facilities. The physical operations of retail service organizations include most of the same processes except that manufacturing is replaced by product acquisition. For service

organizations that deal primarily in information, such as law and accounting firms, the physical processes relate to acquiring information, assembling it into the proper form, and presenting it to the client. Despite these differences, the major components of operations management and associated information needs are alike, as listed below. Components of Operations Management and Examples of Their Information Needs and Uses Transaction Processing Feeds information to all management functions Product and Service Planning and Design Product costs Product prototypes Engineering options Scheduling Staff expertise Forecasted production requirements Equipment maintenance schedules Inventory Control Current inventory levels by product and location Holding costs, space, insurance Status of backorders Implications of stock out Transaction processing describes the recording and filing of data about a companys transactions and serves as a source of much of a company's internally generated information. It can be a major component of the operations function, although it can exist in other functional areas as well. A transaction describes a business event such as the sale of a product receipt of a payment, hiring of an employee, or taking of a reservation. Hospitals process transactions as part of their system for charging for medical coverage; in one case, switching to a diagnosis-related reimbursement (DRG) system called for acquiring and processing information about a patient's illness and treatment.

Managers require information about transactions for several reasons. First, a transaction may affect the company's income statement or balance sheet. Second, managers use information about transactions in making marketing, financial, production, and human resource decisions. For example, managers seek information about customers' payments because the payments affect the company's cash position, which, in turn, influences the schedule of payments to suppliers as well as the company's credit decisions. Managers need information about hiring because it affects the organization's payroll, work schedule, production capacity estimates, and subsequent hiring decisions. Low-level managers often secure information from transaction processing in making routine decisions. Consider, for example, a hotel manager who faces an irate customer claiming to have a reservation that the desk clerk cannot find. What information does the manager require to solve the customer's problem? The manager needs information about the hotel's bookings and the customer's record. Learning that the penthouse suite is unused and that the customer is a frequent guest, the manager might decide to offer the customer the suite at the price of the discount room. Product and service planning and design generate ideas, test them for feasibility, and finalize them into the design of a product or service. Feasibility analysis typically requires the input and review of managers at various levels and specialties throughout the company. For example, the managers explore the financial, marketing, and distribution implications as well as available capacity, physical resources, and financial resources to bring the plan to market. At this stage, the ability to share information is critical. In addition, productivity can be increased if designers and analysts can incrementally modify the designs without re-entering them. Capacity planning refers to the process of determining how much to produce in the short and long term. It requires information about demand and available organizational resources for meeting the demand. Managers must translate the capacity decision into specific requirements for raw inputs, employee time, and machine time. Capacity planning often uses sophisticated models of the relationship between capacity needs and forecasts as well as sensitivity analyses on the assumptions used to make capacity decisions. Scheduling involves the process of matching equipment and employees to the processes. Inputs to scheduling include process flow; equipment needs; personnel available expertise, and preferences; and information about constraints such as those relating to work rules, safety, equipment, and maintenance. Managers must have information to schedule multiple orders through sequential manufacturing processes. To do this scheduling, they must determine the availability of equipment and materials resources, including their location applicability for multiple use, and prior commitments or schedules. They must be able prioritize objectives such as minimizing costs and time, providing inventory as required, encouraging total quality. Inventory control is the management of raw materials, partially completed goods services, and completed but unshipped goods. Ideally, to minimize inventory carrying (managers maintain only an inventory sufficient for completing the final product. Operations managers must know current levels of inventory, the rate at which inventory can be replenished, and the rate at which inventory is depleted to control inventory size and costs. Purchasing managers at retail chains such as Big Bazaar use inventory information from stores to determine the size of additional toy

orders. How can the purchasing manager assist a store manager whose customers complain that an item is regularly out of stock: purchasing manager can check inventory information to determine the item's availability in other stores, its anticipated arrival date, and whether it regularly goes out of stock. 2.3.5 Human Resources Human resource management refers to the deployment, development, assessment, rewarding and management of individual organizational members and worker groups. The functions of human resource management include planning, staffing, training and development, performance management, compensation, labor-management relations, and administration as shown in the table below. Human Resource Functions and Examples of Their Information Needs and Uses Human Resource Planning Marker rates and availability of types of labor Forecasts of staffing needs Position descriptions Staffing Resumes of prospective employees Position descriptions Evaluation criteria Training and Development Employee skills and credentials Position skill and credential requirements Availability of training staff and facilities Costs of outside training services Training materials Performance Management Evaluations of past performance Objectives for future performance

Compensation Industry and organizational wage levels Central and state tax regulations Insurance costs and options Labor-Management Relations Grievance procedures Industry and organizational wage levels Industry and organizational productivity Administrative Affirmative action plans and targets Safety and health procedures Government-requested information Human resource managers engage in the design of organization systems to perform these functions; they assist line managers with implementing the implementing the resource policies. programs, and practices. Human resource planning involves determining the demand and supply for various categories of workers. James Orr wanted a daily count of the number of employees in his organization; he could compare this supply with the requirements for workers to do various jobs before making downsizing decisions. Effective planning also requires information about other potential sources of workers, such as high schools, colleges, and competitors. Staffing describes the recruiting and selecting of individuals for job positions. Recruiting requires communicating information about job openings and the organization to those best qualified for the positions. Many organizations offers employees extensive information about job openings: Employees can review job openings by job code, title, division, department, location, or posting date; they can screen openings for required qualifications; and then they can enter their names, qualifications, and desired positions if they want an internal transfer. Selection involves matching job candidates to job openings. This process passes detailed information about the position to the applicant and information about the applicant to the hiring manager, often through a human resource professional who screens applicants. The hiring managers enter the requirements of the job and their relative importance into a computer system. A human resource manager rates applicants on each requirement based on history and skil1. The computer then generates a screening list. The hiring manager interviews applicants from this list and adds to and updates the ratings.

Training and development addresses deficiencies in skills, knowledge, or experience required for quality job performance or advancement in the organization. Managers must assess individuals' training needs, determine the training opportunities and programs available to meet these needs, and choose the training options that best address the workers' needs. Managers require extensive information about workers' skills, abilities, knowledge, job requirements, and training programs already undertaken. When a manager encounters a poorly performing worker, the manager might wish to know whether the worker participated in any training programs to help assess the causes of the performance problem. Performance management involves providing evaluation data for administrative and training decisions and development activities. Managers assess past performance and offer ways to improve it in the future. They may use observations, behavior checklists, or outputs measures as part of the appraisal. They provide counseling and discuss job opportunities as a part of development. Data about an individual's actions, results, and attitudes, as well as about his or her job's requirements and goals are essential information for performance management. Managers use information collected in the appraisal for making staffing, training and development, and compensation decisions. Compensation design and administration includes determining wages, benefits other forms of compensation, such as bonuses or stock options. Effective compensation management requires information about industry and organization wage levels as well as job and individual characteristics. In designing compensation programs, human resource managers must also know federal tax regulations and other relevant legislation. This information help answer questions such as whether the company should offer a flexible benefits program whether it should introduce on-site day care, or whether it should offer one-time b or salary increases for good performance. In global organizations managers must know the differences in currency rates, living conditions, and expectations about compensation in countries throughout the world. A manager who has difficulty finding employees willing to work abroad for two years may need information to assess whether the compensation package provides enough incentives for the relocation. Administrative responsibilities involve monitoring and keeping records of the functions described so far. Human resource professionals track affirmative action plans and targets. They monitor the implementation and effectiveness of safety and health procedures. They also provide information requested by various government agencies to check compliance with local ,state, and central regulations. Human resource management in a global environment adds additional information needs. Human resource managers must have cross-cultural information about the various human resource functions as well as detailed knowledge of practices in various countries or regions. They must understand the needs of diverse types of workers and translate this understanding into effective policies. Finally, they must effectively diagnose their specific information needs so that they can propose quality programs that respond to the requirements of a multinational and multicultural work force. Increasingly, human resource managers have required comprehensive, feature-rich information systems that allow information to be used for and support interfaces among multiple

functions. Eventually human resource information systems may become an integral part of the administration of each part of the human resource function. 2.3.6 Self Assessment Questions (for section 2.3) 1. Explain the needs of information in the following areas a. Accounting b. Finance c. Marketing d. Operations e. Human resource management 2.4 Summary Managers at all levels in an organization have significant information needs. Management refers to the process of achieving organizational goals by planning, organizing, leading, and controlling organizational resources. Managers in a global setting face a dynamic and unpredictable environment that results in less-than-perfect information. Top, middle, and first line supervisors have special information concerns. Executives require information to help them focus on formulating the organization's overall direction. Managers also require a broad range of information to perform their daily activities. Information needs exist in the areas of accounting, finance, marketing, operations, and human resource management. These needs apply at all levels of management. 2.5 Terminal Questions 1. Take an organisation of your knowledge and determine the information needed by different levels of management in that organisation. 2. Make an organisation of your knowledge and assess the information needs in the various functional areas. 2.6 Multiple Choice Questions 1. As one moves ______ the corporate ladder, decisions have a longer term and wider ranging impact on the organization A. up B. down

C. linearly 1. horizontally 2. ______ focus primarily on implementing the policies and strategies. A. Middle managers B. Top level management C. First line supervisors D. All of the above 3. In most organizations middle managers more often engage in medium- or short-term planning known as A. Strategic planning B. tactical planning C. Operational planning D. All of the above 4. Operations encompass ___________ A. Manufacturing only B. Services only C. Non profit organizations D. Manufacturing as well as services 5. ____________ is the process of gathering information about what consumers want and need. A. Market research B. Needs research C. People research D. all of the above 2.7 Answers

Self Assessment Questions Section 2.2.4 1. This has been mentioned in section 2.2.1 2. This has been mentioned in section 2.2.3.1 Section 2.3.6 1. a. This has been mentioned in section 2.3.1 1. b. This has been mentioned in section 2.3.2 1. c. This has been mentioned in section 2.3.3 1. d. This has been mentioned in section 2.3.4 1. e. This has been mentioned in section 2.3.5 Terminal Questions 1. This has been mentioned in section 2.2.2 2. This has been mentioned in section 2.3 Multiple Choice Questions 1. A 2. A 3. B 4. D 5. A