Chapter thirteen communication and information technology management

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Overview of the Chapter

This chapter begins with a discussion of information and its importance to the manager’s job. Next, the relationship between information, communication, and effective management is explored. The four categories of communication media are examined in descending order of communication richness. The chapter then moves to an overview of the information technology revolution and closes with an explanation of the different types of management information systems.

Learning Objectives

  1. Differentiate between data and information, list the attributes of useful information, and describe three reasons why managers must have access to information to perform their tasks and roles effectively.

  2. Explain why effective communication – the sharing of information – helps an organization gain a competitive advantage and describe the communication process.

  3. Define information richness, and describe the information richness of communication media available to managers.

  4. Describe the computer hardware and software innovations that have created the information technology revolution.

  5. Differentiate among four kinds of management information systems.


Advances in information technology (IT) are presumably designed to facilitate effective communication among people. However, in their zeal to employ IT, some managers and organizations have lost sight of the human element in communication. When the human element is neglected, IT will not contribute to effective communication and can possibly hinder it.

Intel and eBay are examples of companies that have taken a people-oriented approach toward the use of IT. Intel’s systems enable employees to not only access data and information but also get in touch with people who may hold the key to solving a problem or taking advantage of an opportunity. Managers at eBay have mastered the humanization of IT from the customer’s perspective. Customers like eBay because of its personal touch.

  1. How has IT helped to improve the communication process at Intel and eBay?

At both companies, IT is used to link people to other people. Intel’s IT systems enable employees to get in touch with people who may hold the key to solving a problem or taking advantage of an opportunity they are facing. Also, all of the information that employees can access through Intel’s IT system is also available to its suppliers and resellers. One of the reasons eBay is so popular with is customers is because its IT system exudes the personal touch. eBay has mastered humanization of IT from its customer’s perspective and goes out of its way to ensure that the human touch is ever present in all online transactions between buyers and sellers.

  1. In what ways do these companies illustrate the relationship between communication, information, and effective management?

In both cases, it is evident that the ability to deliver for high quality, timely, and relevant information to those who need it is critical to maintenance of high customer satisfaction levels and effective managerial decision-making.

Lecture Outline


Managers cannot plan, organize, lead, and control effectively unless they have access to information.

  • Information is the source of the knowledge and intelligence they need to make the right decisions.

  • Data is raw, unsummarized, and unanalyzed facts.

  • One of the uses of information technology is to help managers transform data into information in order to make better decisions.

Attributes of Useful Information
Four factors determine the usefulness of information to a manager: quality, timeliness, completeness, and relevance.

  • The greater its level of accuracy and reliability, the higher is the quality of information. For an information system to work well, the information it provides must be of high quality.

      • Information that is timely is available when it is needed, not after the decision has been made. In today’s rapidly changing world, information must be available on a real-time basis. Real-time information is information that reflects current conditions.

        • Information that is complete gives managers with all that they need to know to exercise control, achieve coordination, or make an effective decision. One of the functions of information systems is to increase the completeness of the information that managers have.

        • Information that is relevant is useful and suits a manager’s particular needs and circumstances. Irrelevant information is useless and may actually hurt the performance of a busy manager. The people who design information systems need to make sure that managers receive only relevant information.

Information Systems and Technology
An information system is a system for acquiring, organizing, storing, manipulating, and transmitting information. A management information system (MIS) is an information system that managers design to provide them with the specific information they need to perform their roles effectively.

        • As long as there have been organizations, information systems have existed. Before the computer age, most information systems were paper based.

        • Information technology is the means by which information is acquired, organized, stored, manipulated, and transmitted. Rapid advances in the power of information technology have had large impact on information systems and on managers.

    • Managers need information for three reasons: to make effective decisions, to control the activities of the organization, and to coordinate the organization’s activities.

Information Technology Byte: E-Stores: versus versus
Online stores live or die by their ability to provide customers with a satisfying shopping experience. Hundreds of now defunct dot-coms learned this lesson when an inability to generate customer revenues caused their collapse. A close look at the websites of three companies during the summer of 2001 revealed a major difference in the ways that their virtual information systems operate.
Of the three,’s website possessed the IT system that was most interactive with its customers. By contrast,’s information system had only a limited ability to suggest items of interest and retained no customer history to build a customized shopping experience.’s system simply brought into view items that a customer selected from the various product categories and had no ability to provide a customized shopping experience. It seems that the ability of managers to create an IT system that captivates the customer’s attention is a key determinant of success in conducting virtual business.

    • To make effective decisions, managers need information, both from inside the organization and from external stakeholders. Managers’ ability to make effective decisions rests on the extent to which they can acquire and process information.

    • Controlling is the process whereby managers regulate how efficiently and effectively an organization is performing the activities necessary to achieve organizational goals. Management information systems are used to provide the information needed to control a variety of operations within organizations.

    • Coordinating department and divisional activities to achieve organizational goals is another basic task of management. Today coordination problems that managers face are complicated by organizations’ expansion of operations abroad. To deal with global coordination problems, managers have adopted computer-based information systems that help them coordinate the flow of materials around the world.

Communication is the sharing of information between two or more individuals or groups to reach a common understanding.

  • Communication, no matter how electronically based, is a human endeavor and involves individuals and groups.

  • Communication does not take place unless a common understanding is reached.

The Importance of Good Communication
Good communication is essential for obtaining efficiency, quality, responsiveness to customers, and innovation, and thus a necessity for gaining a competitive advantage.

  • Good communication is necessary so that managers can increase efficiency by learning to take advantage of new and more efficient technologies and by training workers to operate the new technologies.

  • Improving quality hinges on effective communication, since managers need to communicate to employees the importance of high quality and the routes to attaining it. Also, subordinates need to communicate quality problems and suggestions for improving it to their superiors. Likewise, self-managed teams must share their ideas for improving quality with fellow team members.

  • Good communication can help increase responsiveness to customers. When the organizational members who are closest to customers are empowered to communicate customers’ needs to managers, managers are better able to respond to these needs. Also, managers must communicate with other organizational members to determine how best to respond to changing customer preferences.

  • Innovation, which often takes place in cross-functional teams, also requires effective communication. Team members must effectively communicate with each other to develop high quality products that customers want and the organization can produce efficiently.

Managing Globally: Cemex Uses IT to Pave the Way in Cement

Cemex is more profitable than any of its competitors in the cement industry. Part of its secret to success lies in its use of IT to improve efficiency. Early on, computer programmers were hired to develop a system to produce automated reports , and create a satellite system whereby data could be transmitted seamlessly to headquarters from the plants. Cemex also provides employees with free computers and Internet connections for their homes for personal use and company trucks are equipped with computers and global positioning systems. Because the latest in IT is put to good use at Cemex, the company is able to maintain its competitive advantage in its industry.

The Communication Process
The communication process consists of two phases. In the transmission phase, information is shared between two or more individuals or groups. In the feedback phase, a common understanding is reached.

  • To start the transmission state, the sender, the person or group wishing to share information with some other person, decides on the message, and what information to communicate.

  • The sender translates the message into symbols or language, a process called encoding.

  • Noise refers to anything that hampers any stage of the communication process.

  • Once encoded, a message is transmitted through a medium to the receiver, the person or group for which the message is intended.

  • A medium is the pathway through which a message is transmitted to a receiver.

  • At the next stage, the receiver interprets and tries to make sense of the message, a process called decoding.

  • The feedback phase is begun when the receiver decides what message to send to the original sender, encodes it, and transmits it.

  • The original sender decodes the message and makes sure that a common understanding has been reached. If a common understanding has not been reached, the sender and receiver repeat this process as many times as needed to reach a common understanding.

  • The encoding of messages into words, written or spoken, is verbal communication. Nonverbal communication shares information by means of facial expressions, body language, and even style of dress.

  • Nonverbal communication can be used to reinforce verbal communication. People tend to have less control over nonverbal communication and can inadvertently send a message they did not intend to. Sometimes nonverbal communication is used to send messages that cannot be sent through verbal channels.

The Dangers of Ineffective Communication
Because managers must communicate with others to perform their various roles and tasks, they devote a lot of time to this activity.

  • Because effective communication is so important, managers also have to help their subordinates become effective communicators. When all members of an organization are able to communicate effectively, the organization is more likely to perform highly.

  • When managers are ineffective communicators, organizational performance suffers, and any competitive advantage is likely to be lost. Poor communication can even cause danger and lead to loss of human life.


To be effective communicators, managers need to select an appropriate communication medium for each message they send. There is no one best communication medium for managers to rely upon. When choosing a communication medium, managers need to consider three factors.

  • The most important is the level of information richness that is needed. Information richness is the amount of information a communication medium can carry and the extent to which the medium enables the sender and receiver to reach a common understanding. Media high in information richness are able to carry a lot of information.

  • The second factor is the time needed for communication.

  • The third factor is the need for a paper or electronic trail, or some written documentation that a message was sent and received.

Face-to-Face Communication
Face-to-face communication is the medium that is highest in information richness. When managers communicate face-to-face, they take advantage of verbal communication, interpret each other’s nonverbal signals, and receive instant feedback.

  • Management by wandering around is a face-to-face communication technique that many managers find effective at all levels in an organization. Managers walk around work areas and talk informally with employees about issues and concerns that both have. These informal conversations provide managers with important information and foster the development of positive relationships.

  • Face-to-face communication should not always be the medium of choice for managers because of the large amount of time and the lack of a paper or electronic trail. For messages that are important, personal, or likely to be misunderstood, managers should use face-to-face communication and supplement it with some form of written communication.

  • Many organizations are using videoconferences to capture some of the face-to-face communication while also saving time and money. Videoconferencing allows managers in two or more locations to communicate with each other over video screens. Videoconferencing sometimes leads to shorter, more efficient meetings.

Spoken Communication Electronically Transmitted
After face-to-face communication, spoken communication electronically transmitted over phone lines is second highest in information richness.

  • Although telephone communication does not allow access to body language and facial expressions, managers do have access to the tone of voice, the parts of the message that the sender emphasizes, and the actual words spoken.

  • Managers also can get quick feedback over the telephone and answer questions.

  • Voice mail systems also allow managers to send and receive verbal electronic messages. Such systems are a necessity when managers are away from their desks or out of the office.

Personally Addressed Written Communication

  • Lower in information richness is personally addressed written communication. Personally addressed written communication, such as memos or letters, has the advantage of demanding attention, as does face-to-face communication and verbal communication electronically submitted.

  • Because personally addressed written communication is addressed to a specific person, there is a good chance that the person will open and read it. Also, the sender can write the message in a way that the receiver is most likely to understand.

  • Written communication does not enable a receiver to have his or her questions answered immediately.

  • Even if managers use face-to-face communication, a follow-up in writing is often needed.

  • E-mail also fits into this category because senders and receivers are communicating through personally addressed written words. It is important to follow e-mail etiquette. Guidelines include: messages in capital letters are often perceived as being shouted or screamed, always punctuate messages, do not ramble on, and pay attention to spelling and format.

  • E-mail has also enabled many workers and managers to become telecommuters. Telecommuters are people who are employed by organizations and work out of offices in their own homes. Many telecommuters say the flexibility of telecommuting enables them to be more productive while giving them a chance to be closer to their families.

  • The increasing use of e-mail has been accompanied by the growing abuse of e-mail. Some employees sexually harass coworkers through e-mail. To avoid these forms of e-mail abuse, managers need to develop a clear policy specifying what company e-mail can and should be used for and what is out of bounds.

Impersonal Written Communication

  • Impersonal written communication is lowest in information richness and is suited for messages that need to reach a large number of receivers. Feedback is unlikely, so managers must make sure that messages are written clearly in language that all receivers will understand.

  • Managers often find company newsletters useful vehicles for reaching large number of employees. Managers can use impersonal written communication for various types of messages, including rules, regulations, and policies, newsworthy information, and the arrival of new organizational members.

  • The paper trail left by this communication medium can be invaluable. Also, impersonal written communication can be delivered and retrieved electronically.

  • Unfortunately, the ease with which electronic messages can be spread has led to their proliferation, and electronic mailboxes of organizational members are often backlogged. The problem with such information overload is the possibility that important information will be overlooked and the loss of productivity due to time wasted on tangential information.

Information Technology Byte: Intel’s “10 Commandments of E-mail”
Some of Intel’s organizational learning concerning e-mail and information overload are captured in these “10 Commandments”. Suggestions include: don’t use your inbox as a catchall folder for everything you need to work on, send group e-mail only when it is useful to all recipients, and tell the recipient that the important information is on pages 2 and 17 when sending a 20 page attachment.
Computer-based information technology is an enabling technology that has allowed managers to develop computer-based management information systems that provide timely, complete, relevant, and high-quality information. The link between information systems, communication, and competitive position is an important one.
The Tumbling Price of Information

  • Modern computers can read, process, and store millions of instructions per second. It is this awesome power that forms the foundation of the current information technology revolution.

  • Between 1991 and 2001, the relative cost of acquiring, organizing, storing, and transmitting information has fallen dramatically. This, in turn, has increased accessibility to computers and reduced the cost of communication between them.

Wireless Communications

  • Another trend has been the rapid growth of wireless communication technologies, particularly cellular communications. Wireless communication facilitates the linking together of computers, which greatly increases their power and adaptability.

  • Because a computer no longer has to be plugged into a hard-wired telephone line, accessing a large computer-based information system is much easier than it used to be.

Computer Networks

  • Networking is the exchange of information through a group or network of interlinked computers. The most common arrangement now is a three-tier network consisting of clients, servers, and a mainframe

  • At the outer nodes are the personal computers (PC) on the desks of individual users referred to as clients. These are linked to a local server, a high-powered mid-range computer that “serves” the client personal computers. The client computers linked directly to a server constitute a local area network (LAN).

  • At the hub of a three-tier system are mainframe computers. Mainframes are large and powerful computers that can be used to store and process vast amounts of information. The mainframe may be connected to mainframes in other organizations and to LANs in other organizations.

  • A mainframe may be connected to other mainframes in other organizations, and through them, to LANs in other organizations. Increasingly, the Internet, a worldwide network of interlinked computers, is used as the conduit for connecting the computer systems of different organizations.

  • If a manager has a personal computer hooked into a three-tier system, he or she can access data or software stored in the local server, in the mainframe, on the Internet or in computers based in another organization. A manager can also communicate electronically with other individuals hooked into their system.

  • Wireless communications allows a manager to hook into the system from any location in which a wireless communications link can be established.

Software Developments

  • Computer software has also been developing rapidly. Operating system software tells the computer hardware how to run. Applications software, such as programs for word processing or database management, is software developed for a specific task or use.

  • The increase in the power of computer hardware has allowed software developers to write increasingly powerful programs. Applications software has vastly increased the ability of managers to acquire, organize, manipulate, and transmit information. It also has increased the ability of managers to coordinate and control the activities of their organization and to make decisions.

  • Artificial intelligence has been defined as behavior by a machine that, if performed by a human being, would be called intelligent. Artificial intelligence has already made it possible to write programs that can solve problems and perform simple tasks.

  • Speech recognition software is another development that is starting to impact the manager’s job. Currently speech recognition software must be “trained” to recognize and understand each individual’s voice.

Four types of computer-based management information systems can be helpful in providing managers with the information they need: transaction-processing systems, operations information systems, decision support systems, and expert systems. The organizational hierarchy, however, is the management information system that preceded them all.
The Organizational Hierarchy: The Traditional Information Systems

  • In the 1850s railroads, the largest of all industrial organizations, faced unique problems of coordination and control. To deal with these problems, they perfected the use of the hierarchy as an information network to provide senior managers with the information they needed to achieve coordination, control, and make decisions.

  • Regular daily and monthly reports were fed up the chain so that top managers could make decisions. Decisions were then relayed back down the hierarchy so they could be carried out. This practice began to change when electronic information technologies became more reasonably priced in the 1960s.

  • The hierarchy has several drawbacks. In organizations with many layers of managers, it can take a long time for information to travel up and for decisions to travel down. Also, information can be distorted as it moves from one layer of management to another, and maintaining this system can become very expensive.

Transaction-Processing Systems

  • A transaction-processing system is a system designed to handle large volumes of routine, recurring transactions.

  • Transaction-processing systems began to appear in the early 1960s and were the first type of computer-based information system adopted by many organizations.

  • Most managers in large organizations use a transaction-processing system to handle tasks such as payroll and customer billing.

Operations Information Systems

  • An operations information system is a system that gathers comprehensive data, organizes it, and summarizes it so that it has value for managers. They help managers to make non-programmed decisions.

  • Most operations information systems are coupled with a transaction-processing system. Managers use operation information systems to get sales, inventory, accounting, and other performance-related information.

Decision Support Systems

  • A decision support system is an interactive computer-based system that provides models that help managers make better nonprogrammed decisions. Model-building capabilities provides managers with the ability to manipulate information in a variety of ways.

  • Such systems are not meant to make decisions for managers. Rather, their function is to provide managers with information they can use to improve their decisions.

Management Insight: How Judy Lewent Became One of the Most Powerful Women in Corporate America
Merck is one of the world’s largest developers and marketers of advanced pharmaceuticals. Judy Lewent, a former director at Merck, decided to develop a decision support system that could help managers make more effective R& D investment decisions. It is called the Research Planning Model, and at the heart of it is a very sophisticated IT model that Merck now uses it to evaluate all proposed R& D decisions. In addition, she has developed other decision support system models that Merck’s managers can use to help them decide whether to enter into a joint venture or how to hedge a foreign exchange risk. Lewent’s reward for her technological savvy was a promotion to the position of chief financial officer of Merck, which makes her one of the most powerful women in America.
Expert Systems and Artificial Intelligence

  • An expert system is a system that employs human knowledge captured in a computer to solve problems that ordinarily require human expertise.

  • Expert systems are a variant of artificial intelligence, and are the most advanced management information systems available. Mimicking human expertise requires a computer that can 1) recognize, formulate, and solve a problem, 2) explain the solution, and 3) learn from experience.

  • Although artificial intelligence is still at a fairly early stage of development, an increasing number of business applications exist.

The Limitations of Information Systems
There is a concern that in all of the enthusiasm for management information systems, a vital human element of communication might be lost. Very rich information is often required to coordinate and control an enterprise and to make informed decisions. Some kinds of information cannot be quantified and aggregated.

Lecture Enhancer 13.1


Your inner feelings and personality are often revealed by the way you move your body, experts are determining. Confidence or insecurity is telegraphed very well by nonverbal behavior. Take the simple handshake. If a person’s hand is cold and clammy, there’s a good chance he or she is very tense and nervous. A confident person moves about with a certain steadiness, while quick movements characterize an insecure or nervous person. People who stand erect are probably more confident and more comfortable than people who slouch or shift their body weight from one foot to the other.

Even the position of a person’s eyebrows when he or she speaks or looks at another can reveal something about that person’s mood or feelings. If you say a perfectly innocuous sentence to someone but you say it without any sign of a smile on your face and with your brows lowered, you will convey a hostile impression. Stares accompanied by lowered brows show anger, aggression, or assertiveness, while raised brows show fear, surprise, questioning, or retreat.
Body language is also important in the business world. When a respected executive talks to a subordinate, the lower-ranking person will listen intently with his eyes riveted on the executive’s face. To look around would be a sign of disrespect. On the other hand, when the subordinate is speaking, it is considered perfectly appropriate if the boss looks about or glances at his or her watch.
The high-status person might also take the liberty of patting the low-status person on the back or shoulder, something the subordinate would never do. The high-status person always takes the lead. If he or she is standing, the other person will stand. If he sits, then perhaps the other will feel free to sit.
And, of course, the high-status person directs the topics of conversation and how long the talk will last. It’s the same with office visits. The higher-ranking person can exert his or her status by simply dropping into a subordinate’s office without notice. The subordinate, of course, calls for an appointment.
Lecture Enhancer 13.2


Many of us are awash in e-mail. There’s no question that e-mail helps us be more efficient. But misuse can hurt. Some compare e-mail to the Interstate highway system: it works well because motorists observe common rules and courtesies, like staying out of the left lane when not passing, that allow for faster, more efficient travel. Those common rules and courtesies for e-mail are evolving slowly.

Bill Howard, columnist for PC Magazine, knows the frustration first hand. By his own estimate, he gets 50 to 100 messages a day. Howard recently outlined a proposal for e-mail etiquette.
Good e-mail starts with a useful subject line and a short message. The subject line should make sense to both the sender and the recipient. For instance, a subject line “Meeting” may make perfect sense to the sender, but the recipient may go to half a dozen meetings a day—which meeting does it refer to?
Short messages are best, especially when it is very important. Keep them so the message and header fit on one screen.
Keep the typesetting clean. The Internet dutifully reduced most e-mail to a single font, but in-house electronic mail systems allow senders to use multiple fonts, colors, and clip art. How can you claim to have a lean organization when the annual notice-of-carpet-shampooing memo includes purple headlines and a clip art of a guy in a blue, zip-up service jacket?
Bill Howard suggests a special place in e-mail purgatory for people who send messages longer than “OKAY” in all caps. It is the Internet equivalent of shouting.
Finally, unless the matter is really urgent, don’t respond too quickly. People who respond to every message within five or ten minutes probably are paying more attention to their e-mail than to their job. A hasty reply can also be dangerous because you may be too passionate, forceful, or hostile. Let the draft response cool off for an hour or so before sending it.

Lecture Enhancer 13.3


Despite the best efforts of English professors, business communication consultants, and other horrified bystanders, obfuscation in business lingo appears to be a growing and troublesome phenomenon. This may mean big trouble for inexperienced or naive employees who take business talk at face value. Those relatively new to management sometimes fail to comprehend the overstatement, understatement, and evasion that characterize much business talk.

“You won’t succeed if you don’t pick up the language,” says Felice Schwartz, president of Catalyst, a New York resource center for career women. Subordinates, the counselors say, should pay especially close attention to management “suggestions.” When the boss says, “Please finish that job when you have a chance,” more often than not he or she really means, “Do the job now, or else.” Analysts of business language say executives often disguise orders as suggestions to avoid seeming tyrannical.
An assistant office manager at an auto-parts manufacturer discovered the perils of understatement. She was told by her boss of “an impromptu meeting at 4 o’clock—but it’s nothing to worry about.” She passed up the meeting to learn afterward that it dealt with the reorganization of her department and the cutting back of her staff and responsibilities.
One consultant says a good rule to follow is that when the boss says, “Don’t worry,” then do worry. “Management deals with change with studied casualness,” she says. “The bigger things are, the more people try to speak of them casually.”
Recruits are often misled from the beginning by such observations as, “We don’t punch the clock around here.” That’s probably true. Who needs a time clock when employees always come in early and work late? When employees are told of “challenges” or “opportunities,” should they expect high adventure and the heights of achievement? No, the counselors say. They should expect a lot of headaches and no spare Excedrin.

Lecture Enhancer 13.4


The road to widespread acceptance of computer technology has often been rough. The Wall Street Journal recently published a collection of reports from computer techs that illustrate this barrier.

  1. Compaq is considering changing the command “press Any Key” to “Press Return Key” because of the flood of calls asking where the “Any” key is.

  2. A technical support had a caller complaining that her mouse was hard to control with the dust cover on. The cover turned out to be the plastic bag the mouse was packaged in.

  3. Another Compaq technician received a call from a man complaining that the system wouldn’t read word processing files from his old floppies. After troubleshooting for magnets and heat failed to diagnose the problem, it was found that the customer had labeled the diskettes then rolled them into the typewriter to type the labels.

  4. Another customer was asked to send a copy of her defective diskettes. A few days later a letter arrived from the customer along with photocopies of the floppies.

  5. A Dell technician advised his customer to put his troubled floppy back in the drive and close the door. The customer asked the tech to hold, and was heard putting the phone down, getting up, and crossing the room to close the door to his room.

  6. Another Dell customer called to say he couldn’t get his computer to fax anything. After 40 minutes of troubleshooting, the tech discovered the man was attempting to fax a piece of paper by holding it in front of his monitor screen and hitting the “send” key.

  7. Yet another Dell customer called to complain that his keyboard no longer worked. He had cleaned it by filling up his tub and soaking the keyboard for a day, then removing all the keys and washing them individually.

  8. A Dell technician received a call from a customer who was enraged because his computer had told him he was “bad and an invalid.” The tech explained that the computer’s “bad command” and “invalid” responses should not be taken personally.

  9. An exasperated caller to Dell Computer Tech Support couldn’t get her new computer to turn on. After ensuring the computer was plugged in, the technician asked her what happened when she pushed the power button. Her response: “I pushed and pushed on this foot pedal and nothing happens.” The foot pedal turned out to be the computer’s mouse.

  10. Another customer called Compaq tech support to say her brand-new computer wouldn’t work. She said she unpacked the unit, plugged it in, and sat there for 20 minutes waiting for something to happen. When asked what happened when she pressed the power switch, she asked “What power switch?”

  1. This is true story from a Novell NetWire Systems operator.

Caller: “Hello, is this tech support?”

Tech: “Yes, it is, how may I help you?”

Caller: “The cup holder on my PC is broken and I am within my warranty period. How do I go about getting that fixed?”

Tech: “I’m sorry, but did you say cup holder?”

Caller: “Yes, it’s attached to the front of my computer.”

Tech: “Please excuse me if I seem a bit stumped, it’s because I am. Did you receive this as part of a promotion at a trade show? How did you get this cup holder? Does it have any trademark on it?”

Caller: “It came with my computer, I don’t know anything about a promotion. It just has ‘4X’ on the front of it.”

At this point the Tech Rep had to mute the caller, because he couldn’t stand it. The caller had been using the load drawer of his CD-ROM drive as a cup holder, and snapped it off the drive.


Notes for Topics for Discussion and Action

1. What is the relationship between information systems and competitive advantage?

An information system is a system for acquiring, organizing, storing, manipulating, and transmitting information. Managers need this information in order to make effective decisions, to control the activities of the organization, and to coordinate the activities of the organization. If an organization does not adopt an advanced information system, it will probably be at a disadvantage compared to competitors, which could result in a lack of a competitive advantage.
2. Which medium (or media) do you think would be appropriate for each of the following kinds of messages a subordinate could receive from his or her boss: (a) a raise, (b) not receiving a promotion, (c) an error in a report the subordinate prepared, (d) additional job responsibilities, and (e) the schedule for company holidays for the upcoming year.

  1. A raise should be communicated face-to-face and then followed up in writing

  2. Not receiving a promotion should be communicated face-to-face

  3. An error in a report should be communicated face-to-face because nonverbal cues are important in this case.

  4. Additional job responsibilities should be originally communicated face-to-face to ensure that the subordinate understands the change and then followed up in writing

  5. The holiday schedule should be sent to employees by e-mail or memo, enabling them to keep the document for further reference.

3. Ask a manager to describe the main kinds of information systems that he or she uses on a routine basis at work.

An information system can be either a transaction processing system, an operations information system, a decision support system, or an expert system. A transaction-processing system is designed to handle large volumes of routine, recurring transactions. An operations information system gathers comprehensive data, organizes it, and summarizes it so that it has value for managers. They help managers to make nonprogrammed decisions. A decision support system is an interactive computer-based system that provides models that help managers make better nonprogrammed decisions. Model-building capabilities provide managers with the ability to manipulate information in a variety of ways. An expert system employs human knowledge captured in a computer to solve problems that ordinarily require human expertise. Expert systems are a variant of artificial intelligence and are the most advanced management information systems available. Mimicking human expertise requires a computer that can 1) recognize, formulate, and solve a problem, 2) explain the solution, and 3) learn from experience.
4. Because of the growth of high-powered low-cost computing, wireless communications, and technologies such as videoconferencing, many managers soon may not need to come into the office to do their jobs. They will be able to work at home. What are the pros and cons of this?
The advantages of managers working at home include increased flexibility, more time for family and friends, and the comfort and convenience of familiar surroundings. The disadvantages of managers working at home include decreased face-to-face communication, a decrease in the ability to closely monitor the day-to-day performance of subordinates, and an increase in the distractions from family and personal matters.
5. Many companies have reported that it is difficult to implement advanced management information and decision support systems. Why do you think that this is so? How might the roadblocks to implementation be removed?
One problem is that there is a lack of consistent technological standards, so that different components of information systems might not be compatible with each other. Secondly, individual users might exhibit resistance to use the information system. This could be from fear of the new technology (technophobia), a failure to appreciate the power of the technology, or lack of in-house support staff. This roadblock can be removed by making the technology more user friendly and accessible to managers. In addition, adequate training and support staff should be readily available.
Thirdly, since implementation of information technology systems can change the way in which an organization is managed, many managers may find these changes threatening to their power, authority and job security.
6. Why is face-to-face communication between managers still important in an organization?
Face-to-face communication provides a “human element” that is not found in electronic communication. Certain information needs to be conveyed in person and cannot be effective if communicated electronically. Electronic communication should be used to support face-to-face communication and not to replace it.

Notes for Building Management Skills

Diagnosing Ineffective Communication

(Note to Instructors: Student answers will vary based on their experience. Following is some information to aid your understanding of the terminology referenced in the questions.)

1. Why was your communication ineffective in this incident?
There are many reasons for ineffective communication. Too much noise may have prevented communication from being processed or perhaps the wrong type of medium was used, given the richness of the information in the message. Also, perceptual biases can hamper or prevent communication. Ultimately, communication is ineffective if there is a failure to reach a common understanding.
2. What stages of the communication process were particularly problematic and why?
The communication process consists of two phases, the transmission phase in which information is shared between two or more people, and the feedback phase in which a common understanding is reached.
3. Describe any filtering or information distortion that occurred.
Filtering is a barrier to effective communication that occurs when senders withhold part of a message because they mistakenly think the receiver doesn’t need the information or won’t want to receive it. Information distortion occurs when the meaning of a message changes as it passes through a series of senders and receivers.
4. How could you have handled this situation differently so that communication would have been effective?
Effective managers must strive to perceive other people accurately. Accurate perceptions, in turn, contribute to effective communication. To be effective communicators, managers must select an appropriate communication medium for each message they send. They must also make sure that errors have not occurred during the encoding or decoding stages of the communication process.

Notes for Small Group Breakout Exercise

Using New Information Systems

1. What advantages can you tell accountants they will obtain when they use the new information technology?

The timeliness of information will greatly improve. Information will become more accessible to those who need to make important decisions that will affect the success of the organization.
2. What problems do you think you may encounter in convincing accountants to use the new information technology?
Resistance from individual users is quite probable. The partners in the accounting firm might feel that they have done quite will without the use of information technology and feel very apprehensive about using it. Since this is new technology for them, they might be intimidated by its advanced nature and still unable to appreciate its power.
3. Discuss how you might make it easy for accountants to learn to use the new technology.
In order to encourage the partners to use the information technology, the system should be user friendly and accessible, especially to those with no prior computer experience. Adequate training should be available to everyone and they should be encouraged to partake in it. Competent in-house support staff should be readily available at all times to provide assistance.

Notes for You’re the Management Consultant

Chen is perhaps not using his technological communication tools to the fullest extent. E-mail can be sent with an urgent notice or can be sent as a task assignment with a required response. Using the task assignment feature would allow Chen to receive feedback from his employees and monitor where they are at any given time on a project. He also needs to meet personally with the employees to set up a prioritizing system and seek more opportunities for face-to-face communication. Chen's employees appear to respond well to direct communication and may feel isolated from Chen if he relies only on e-mail.


(Note: Student answers will vary.)

  1. Either by yourself or in a group, discuss the ethics of using IT for personal uses at work. Should employees have some rights to use these resources? When does their behavior become unethical?

Employees often feel that they should be allowed to use company IT resources such as personal computers for personal reasons they deem legitimate, as long as it does not detract from their productivity as a worker and they are not engaging in inappropriate or immoral behavior. Employee behavior becomes unethical when job responsibilities are being neglected, IT tools are being used to harass other employees or otherwise detract from organizational effectiveness, or employees are visiting socially unacceptable websites.

  1. Also, some companies keep track of the way their employees use IT and the Internet. Is it ethical for managers to read employees private e-mail or to record the places that employees visit on the World Wide Web?

Although it may seem unethical, companies are within their legal boundaries when reading employee e-mail or monitoring the websites they have visited. The most ethical approach to this matter is for companies to engage in such monitoring only when it has good grounds for suspecting that there has been abuse. Also, companies should make employees explicitly aware of their policy regarding the use of corporate IT resources for personal reasons.


Case Synopsis: How Herman Miller Designs the Office of the Future

Managers at Herman Miller, an office furniture maker, have found innovative ways to use IT and the Internet to give their company a competitive advantage. The company sells its products over the Internet and uses e-mail as a means of communication within and outside of the company. The company created information systems that link manufacturing operations with its network of salespersons and dealers., the company’s online university, allows employees to choose from 85 courses offered over the Web. Customer specific websites have been developed on which Miller designers can offer clients the opportunity to comment on products designed to the client’s specification. Although these IT initiatives have required a substantial investment of time and money, Herman Miller managers are thinking long term. They believe they have created a source of competitive advantage for their company that will sustain it in the years ahead.


        1. What kinds of information technology systems does Herman Miller use?

An operations information system is a system that gathers comprehensive data, organizes it, and summarizes it so that it has value for managers. By using this type of system, Herman Miller’s salespeople are able to give customers more accurate and timely information with fewer errors.

A decision support system is an interactive computer-based system with model-building capabilities that give managers the ability to manipulate information in a variety of ways. By using this type of system, Miller’s designers can offer its clients the opportunity to review three-dimensional views of products they have developed based on client specifications.

        1. How have they improved communication both inside the company and with its customers?

E-mail transmitted through its Intranet has improved communication within Herman Miller, and e-mail transmitted through the Internet has improved communication with customers, dealers, and suppliers. Within the company, communication was improved by developing information systems that linked various departments together. Improved IT networks also increased the speed and accuracy of communication with customers.

        1. How does Herman Miller use IT to increase competitive advantage?

IT was used to shorten the sales cycle and give customers exactly what they want when they need it. In other words, IT was used to change the way customers experienced Herman Miller and to increase value for the customer.

Case Synopsis: Across the Geek Divide

Software companies are finding that many of their clients expect their sales team to include a programmer. Not only must the tech person on a sales team understand the nuts and bolts of software, but he or she must also have some business experience and good communication skills. Lack of real world business experience by most programmers is the reason the industry has so much great software in search of a problem to fix, according to one CEO in this industry. This presents a problem, however, since traditionally, most computer programmers would often rather commune with computer code or hardware than the world at large.

Because technical degree programs usually do not offer communication and other management skills, software companies must conduct in-house training. One technology executive says that his experience has taught him that approximately one-third of all “techies” have great potential as business people. As technology becomes an ever more pervasive part of the knowledge economy, those “techies” with a broader array of skills and a more outgoing personality will raise themselves above the pack.

  1. Why might it be important for software sales teams to include a programmer?

The programmer’s knowledge may be required to explain the technical details of the product, which increases the software company's credibility. Also, listening to customer express his wants, needs, and complaints on a face-to-face basis may help the programmer to develop a better product.

  1. What can managers do to ensure that programmers and technical experts are able

to effectively communicate with clients and customers?
They can provide communication and management skills training, along with constant coaching and feedback to programmers concerning their development in this area.

Jones, Essentials of Contemporary Management

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