Managers learn very early in their careers that information is the key to making good decisions and that making good decisions is the key to success. Thus a causal relationship between success and information is established. What actually constitutes information, how it is measured, and when the point of diminishing returns in information acquisition is reached, however, are subjects seldom considered by most people. They assume that because having information is good, the more information one has, the better.
More than two decades ago, Russell Ackoff exposed some of the most popular myths on information and information systems. In a landmark article entitled "Management Misinformation Systems," Ackoff asserted that more information is not necessarily better. 1 There is a point at which the mind simply goes blank when bombarded with huge amounts of information. Psychologists had introduced the concept of "information overload," and information theorists such as Claude Shannon and Warren Weaver had developed the calculus for the measurement of information and information overload. 2 Later Alvin Toftler popularized the concept of information overload and its consequences in his book Future Shock 3
Although scientific definitions of information are too abstract for practical use, they emphasize the fact that information relates to the concept of uncertainty and representsthe key to its reduction. In relating information to uncertainty reduction, one must distinguish between data (the raw material in the information-creation process) and information (the end result of that process). Information is in turn distinct from knowledge, which is the outcome of the use of information in a specific situation of uncertainty reduction. Finally, wisdom is defined as the "appropriate" (that is, right for the purpose) use of knowledge. 4
Figure 16.3 is a schematic representation of the information-creation process. The process takes place in the mind of the person confronted with an uncertain situation. By bringing into one's mind the problem and a set of data, one begins a selection process that eventually leads to the selection of appropriate data out of a given set of available data.
Business use of information technology-electronic devices (hardware) combined with the appropriate instructions (software )-has gone through several phases. During the data processing era, the technology was used mainly for the acquisition and processing of data. The entire process was controlled by the EDP (electronic data processing) professional; very little freedom was given to the manager user. An increase in the manager's ability to use the technology directly, without the intervention of the EDP professional, ushered in the present-day era of management information systems (MIS). The fact that a manager confronted with a problem can relate it to a set of data and create information ·without having to go through the EDP professional has greatly enhanced managerial effectiveness. Even now, however, we are witnessing the beginning of the era of information and knowledge, when the user will have almost total control over the use of the technology. Direct linkages to large databases thousands of miles away will give the user tremendous opportunity to create information in a fraction of the time required before.
Figure 16.4 shows how the people in an organization might interact with a computerized information system. The people (left side of the diagram) are the input providers and the output users of the system. The organization is assumed to be a hierarchical structure. The left side of the diagram describes the tasks performed by the three layers of management. These tasks are the uncertainty generators. The right side of the diagram lists the databases (reports) that aJre used in the information-creation process. Note that as a general rule people at the top of the organization primarily synthesize information from the databases, whereas people at the bottom of the hierarchy analyze information from the databases. Databases contain basically two types of data: historical and evaluative. The shaded area in Figure 16.4 indicates the amount of evaluative data used by different levels of management; the white area represents the amount of historical data. As the exhibit shows, top management uses mostly evaluative data; its use of historical data is minimal. Lower management's role is just the opposite.
The decision maker confronted with a problem must relate the problem to the available data (A). Selection of certain data from the data base creates information (8). This information is used to arrive at a solution (C), the use of which results in knowledge (D). Appropriate use of this knowledge leads to wisdom (E). Step E relates to effectiveness (doing the right thing)-steps A, 8, C, and D relate to efficiency (doing the thing right) .
- 1088 reads
