Page 49 - DMGT505_MANAGEMENT_INFORMATION_SYSTEM

Management Information Systems

Notes
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Caution According to this model, in order to implement change, all four components must
be change simultaneously.

Self Assessment

Fill in the blanks:
1. Information technology helps firms contract in size, because it can reduce .................. costs.
2. According to .......................... theory, the firm is viewed as a “nexus of contracts” among
self-interested individuals rather than as a unified, profit-maximizing entity.
3. ................................. researchers have theorized that information technology could change
the hierarchy of decision making in organizations by lowering the costs of information
acquisition and broadening the distribution of information.

3.2 IT Impact on Decision-making/Role of Information Technology

Decision-making increasingly happens at all levels of a business. The Board of Directors may
make the grand strategic decisions about investment and direction of future growth, and managers
may make the more tactical decisions about how their own department may contribute most
effectively to the overall business objectives. But quite ordinary employees are increasingly
expected to make decisions about the conduct of their own tasks, responses to customers and
improvements to business practice. This needs careful recruitment and selection, good training,
and enlightened.

Times have changed and so have the methods by which managers make decisions. Information
technology has helped speed the change in methods.

Did u know? Decision making is an integral part of every manager’s day-to-day activities
at work place. Due to this fact managers are also known as “decision makers” in business
organizations.

Task Discuss what kind of IT impact on decision-making process

3.2.1 Traditional and Contemporary Management

Technology has enabled companies to flatten their hierarchies. The last few years has seen an
exodus of middle managers. Companies simply didn’t need the extra layers because of
technological advances that allow lower levels of employees to communicate and collaborate
easier and faster than ever before. Managers in these newly flattened organizations are now
responsible for making sure employees know the environmental influences on the organization,
know the goals of the organization, and adjust the organization to meet the new influences.
Managers then free their employees to meet not only the organization’s goals, but also their
personal goals.

Information systems can help managers and employees work more efficiently and effectively in
this new environment by increasing the amount of information available to all employees.
Communications are faster and more widespread with new technologies that enable employees

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