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Unit 11: Information System and Reporting to Management

information between two or more parties through reports is known as reporting. In this unit, Notes
we will discuss information system and the nature of reporting to management.

11.1 Attributes of Information

For information to be useful to managers, it must possess certain attributes. Some of the important
attributes are accuracy, timeliness, relevance and completeness. The list of attributes and their
significance is shown in table 11.1.

Table 11.1: Attributes of Information

Accuracy Must be true and correct and must accurately describe the item or event.
Timeliness Available when it is needed and without excessive delay.
Relevance Pertains to the situation at hand. Information relevant at one time may
not be relevant at another if it does not add to the knowledge needed by a
decision maker.
Completeness Provides the user with all details needed to understand a solution.
Complete information (that is certainty) is rarely available.
Frequency Prepared or presented to users often enough to be up-to-date.
Time horizon Oriented toward past, present or future activities and events.
Scope Broad or narrow in coverage of an area of interest.
Origin May originate from sources within the organization or from external
sources.
Form of presentation Tables of numbers or graphic displays of information are the most
common written or printed forms. May also include verbal presentation.

11.1.1 Information Needs of Managers

All managers require information to perform their managerial functions (mainly, planning and
controlling) and make effective decisions. The information that managers require will vary,
depending on the nature of the work they do and the tasks they seek to accomplish. Information
needs also vary by levels in the organisational hierarchy (see Table 11.2). For instance, top level
managers need far less detail (as a general rule) than lower level managers. Since top-level
managers have to take a broad perspective of the organisation and its mission, they only need
information that helps them develop or enhance the perspectives.

Information that originates within an organisation is referred to as internal information. This
type of information is essential for managing day-to-day operations.

Example: Examples of internal information are:
1. Daily receipts and expenditures.
2. Quantity of an item in hand or in inventory.

3. Cost and selling price of the item.
4. Salespeople’s quotas.
Information that originates outside the organisation is referred to as external information. Such
information is often required by top level managers to plan and guide the organisation
successfully.

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