management, organizational policies & practices lecture 13 dr. amna yousaf phd (hrm) university...

Management, Organizational Policies & PracticesManagement, Organizational Policies & Practices

Lecture 13 Dr. Amna YousafPhD (HRM)

University of Twente, the Netherlands

Recap Lecture 12Recap Lecture 12

Employee Involvement– Participative Management– Representative Participation– Quality Circles

Linking Employee Involvement programs & Motivation Theories

Using Rewards to Motivate Employees What to Pay: establishing a Pay Structure

Recap Lecture 12Recap Lecture 12

How to Pay: Rewarding individual Employees Through Variable-Pay Programs– Piece-Rate Pay

– Merit Based Pay– Bonuses– Skill Based Pay– Profit-sharing plans– Gain –sharing– Employee Stock Ownership Plans

Global Implications

© 2007 Prentice Hall Inc. All rights reserved.

Managing Information Managing Information

Lecture 13

OutlineOutline

After going through this lecture you should be able to:

1. explain the strategic importance of information.

2. describe the characteristics of useful information(i.e., its value and costs).

3. explain the basics of capturing, processing, and protecting information.

4. describe how companies can share and accessinformation and knowledge.



Then and Now…Then and Now…

Adding machines instead of spreadsheets’

Filing system instead of storing in hard drives

Hard copy summary sent by post to head office instead of transferring through satellite

Electric typewriter instead of word processor

Sticky notes instead of email

Coworkers and assistants writing them instead of voice mail

Moore’s Law 1966Moore’s Law 1966


Gordon Moore one of founding member of Intel Corp, which makes 80% of integrated processors used in PC’s.

Moore predicted that every 18 months, the cost of computing will drop by 50% as computer processing power doubled. Computer today is much smaller and faster than mainframes used in 1990’s.

Use of similar technological advances in cars would have made them much cheaper too.

Gordon Moore one of founding member of Intel Corp, which makes 80% of integrated processors used in PC’s.

Moore predicted that every 18 months, the cost of computing will drop by 50% as computer processing power doubled. Computer today is much smaller and faster than mainframes used in 1990’s.

Use of similar technological advances in cars would have made them much cheaper too.

Why Information MattersWhy Information Matters

When raw data is used in useful, informative and meaningful way; it becomes information– 5, 18$, 39, 49, 21 are just raw data without any

usefulness . – Information is useful when that can influence

some one’s choice and behavior. • Managerial decision making based on information


Characteristics of Useful informationCharacteristics of Useful information

Accurate Information– Information must be accurate to be useful. For

accuracy it should be reliable and valid– Airline maintenance crew cant service and fix

passenger jets unless they receive information from plane’s own information system.

– False problems at Boeing’s 747 passenger jet which can be misleading for maintenance crew. Maintenance costs represent 20% of the cost of running an airline

• Inaccurate information lead to expensive mistakes



Complete Information– to begin to identify problems and identify

potential solutions– New generation planes like Boeing’s 777 contain

600 computer sensors that airline can use to schedule maintenance.

Relevant Information– Information is useful when relevant and

relevant when pertains to problem



– FAA classifies maintenance problems on planes into three categories

• Priority one problem must be fixed after plane lands or before it allowed to take off

• Planes with priority 2 problems are allowed to operate for a limited time period

• Priority three problems are minor, the airline can fix at their own discretion

Timely Information– “ I wish had known that ahead of time” – Information available nowadays to plane

maintenance crew is more accurate, reliable and timely. United Airline’s new AMIS allows the crew to track plane performance while they are en route to their destinations


Costs of Useful informationCosts of Useful information

Acquisition Costs– Collection of CIB reports by SBP

Processing Cost– The expense of turning raw data into usable

information– Insurance company having information about 10

million households that could do a better job to help it target its insurance. Processing costs might be higher as it might need around 15 computers to process all data in incompatible format.

• Reader’s Digest



Storage Costs– Is the cost of physically or electronically

archiving information for later use and retrieval. – Following information available with SBP data

base such as age, estimated income, home ownership, cars ownership, occupation, children, number of credit cards and so on.

• Strong MIS and a number of computers required to store all this information



Retrieval Costs– The cost of already stored and processed

information. – Might be costly as first you have to find the

information, then convince whoever has it to share it, then it should be processed into a form usable for you and by the time you get it, it may no longer be timely.

Communication Cost– The cost of transmitting information from one

place to the other• Electric companies have employed meter readers to

walk from house to house to gather information that would then be entered into company computers


15CHAPTER FIVE

Strategic Importance of InformationStrategic Importance of Information

1

First-MoverAdvantage

Sustaining aCompetitiveAdvantage

16CHAPTER FIVE

First-Mover AdvantageFirst-Mover Advantage

1.1



The strategic advantage that companies earn by being the first to use new information technology tolower costs or to differentiate a product

The strategic advantage that companies earn by being the first to use new information technology tolower costs or to differentiate a product


First-Mover Advantage - Examples• Amazon.com the first online store to sell books with 2.5

million books – 10 times more than Barnes & Nobles– Reduced costs.

• First movers earn 30% market share compared to 19 earned by followers.

• Early adopters of ATM earned 26% market share and profits more



Sustaining Competitive Advantage– The real challenge– Smaller banks united to form ATM networks like

PLUS and Cirrus; transaction can be processed on most bank cards

– Since new information costly; first mover strategies more expensive than following it after prices fall.

• In certain cases they can move the companies with first mover advantage out of business!



Resource Based View of IT– Does IT create value for firm by lowering costs

of providing better quality or service? If no then it might be a competitive disadvantage

– If yes then is it different form competitors? If NO then Competitive parity may arise.

– If yes then is it difficult for others to create or buy IT? If no then competitive disadvantage

– If yes then competitive sustainable advantage!


20CHAPTER FIVE

Sustaining a Competitive AdvantageSustaining a Competitive Advantage

1.2

CompetitiveAdvantage




SustainedCompetitiveAdvantage

SustainedCompetitiveAdvantage

TemporaryCompetitiveAdvantage

TemporaryCompetitiveAdvantage

Is it difficultfor another firmto create or buy

the IT?

Is it difficultfor another firmto create or buy

the IT?

NO YES

Does the informationtechnology (IT)

createvalue?

Does the informationtechnology (IT)

createvalue?

NO YES

Is the IT differentacross

competing firms?

Is the IT differentacross

competing firms?

NO YES

Adapted from Exhibit 5.2

21CHAPTER FIVE

Capturing InformationCapturing Information

3.1

Methods ofMethods ofCapturingCapturing

InformationInformation

Methods ofMethods ofCapturingCapturing

InformationInformation

ElectronicElectronicElectronicElectronic

ManualManualManualManual

Bar CodesBar Codes

Radio FrequencyIdentification Tags

Radio FrequencyIdentification Tags

Electronic ScannersElectronic Scanners

Optical Character Recognition

Optical Character Recognition


Capturing Information– Manual capturing of information – labor

intensive process of data recording – Filling application for driving license or opening

account; manually entering into system• Slow, expensive and often inaccurate

– Electronic storage allows to enter data directly into computer without manual entry; error free and less time taking



Electronic Scanners An electronic device that converts printed text and pictures

into digital images Easy to use, inexpensive, fast way of electronic data capture Text can not be edited once digitalized by this way

Companies can use Optical Character Recognition software to edit, read and process the text

Bar codes– A visual pattern that represents numerical data by

varying thickness and pattern of vertical bars

Bar codes and document scanners are most common methods of electronic data capture


Storing InformationStoring Information

Storing Information– Paper most common form – expensive; takes space,

requires manual search process, slow and error-laden. Only one person at a time can access it.

Microfilm– Small photographic slides used to store data. A reel

of microfilm can store hundreds of pages of data. • Libraries often use microfilms to store issues of magazines

and newspapers• Inexpensive, permits faster retrieval than paper, requires little

storage space and particularly good method of storing archived Longley inaccessed data.

• Downsides: can be accessed by only one person at a time; access of information available only where microfilm is stored



CD-ROM (compact disk read only memory)– A compact disk that holds up to 650 megabytes

of text, sound or graphic data• One of the cheapest forms of electronic data storage;

affordable by small businesses

DVD (digital video disk)– A compact disk that holds up to 17 gigabytes of

text, sound or graphical data• Another cheap and worthwhile storage options for most

companies

Data storage Tape– A magnetic tape used to record and store data-

used to archive data for long term storage in separate off site locations. Data storage tapes used ofr secondary data© 2007 Prentice Hall Inc. All rights reserved.


Hard drive– A magnetic disk, usually mounted inside a

computer, that allows users to read its stored data and write data to it

• Hard drive is where all data in PC is stored• Compared to CD-ROMs, DVDs and tape storage, hard

drive permit fastest data retrieval• Cheaply available• Downside: they crash – they just lock up. Can destroy

data and produce immediate work stoppages• Most common form of primary storage – primary storage

is for the data that workers and managers use most often in performing their jobs.


Processing InformationProcessing Information

Processing Information– Transforming raw data into meaningful

information that can be applied to business decision making.

• Evaluating sales data to determine best and worst selling products; examining repair records to determine product reliability or monitoring the cost of long distance phone calls are examples of processing

Three kinds of computer processing1.Centralized processing: processing and storing

data from individual computer terminals on mainframe computers, which have gigabytes of memory and terabytes of hard drive storage spaces


Processing InformationProcessing Information

2. Distributed processing: processing and storing data in desktop computers unlike mainframe computers. 2. Rather than central processing of data and information;

this forms gives mangers ready access to data and empowers them.

3. Loan officer can access all information and process the file of a customer coming for loan through desktop unlike mainframe where all information comes centralized

3. Shared processing: information processing that is shared by two kinds of computers, clients, servers, across a clients/server network

Companies use multiple processes of information; they being cheaper. Large companies use all there forms; smaller using combination of desktop and server/network computers


Cost and Configuration for Desktop, Server and Mainframes

Cost and Configuration for Desktop, Server and Mainframes

Computer Price ($) Processor Memory Storage

Desktop 1,000 to 3,000

200-400 MHz Pentium II processor

32-64 megabytes

4-8 gigabytes

Servers 5, 000 to 20, 000

Up to 4 400 MHz Pentium II processor

Upto 4 gigabytes

Upto 350 gigabytesOf total storage

Mainframes 5, 000,00 to 5, 000, 000

Up to 20 500 MHz processors

8-32 gigabytes

4-8 terabytes


30CHAPTER FIVE

Protecting InformationProtecting Information

3.2

Authentication and authorization

Firewalls

Antivirus software

Data encryption

Virtual private networks

31CHAPTER FIVE

Password Dos and Don’tsPassword Dos and Don’ts

3.2

1. Don’t use any public information

2. Don’t use complete words

3. Use eight or more characters

4. Use longer, unique passwords

5. Don’t write your password

6. Change it every six weeks

7. Don’t reuse old passwords

32CHAPTER FIVE

Accessing and SharingInformation and Knowledge

Accessing and SharingInformation and Knowledge

4

Internal Accessand

Information Sharing

External Accessand

Information Sharing

Sharing ofKnowledge and

Expertise

Accessing and Sharing Information and Knowledge

Accessing and Sharing Information and Knowledge Previously it would take weeks for companies to

confirm customer orders. Email: the transmission of messages via

computers– Fastest and cheapest form of communication in

companies– Downside: volume of emails

Voice Messaging: telephone answering system that records voice messages– More freedom of expression; some people are

not readers they are talkers– Downside: reading messages is faster than

listening


Accessing and Sharing Information and Knowledge

Accessing and Sharing Information and Knowledge Conferencing Systems: allows two or more users

in different locations see and talk to each other as if they are in same room– Document conferencing: allows two or more

persons in different locations to simultaneously view and make comments about documents

– Application sharing: allows two or more people to actually make changes in document – a step ahead of document conferencing

– Desktop Videoconferencing: allows two or more persons in different locations to use video cameras and see and hear each other and share documents

• Access to high speed internet is important for clear and smooth voice and picture quality


Internal Access and SharingInternal Access and Sharing

Executive Information System– Data processing system that uses internal and

external data sources to provide the information needed to monitor and analyze organizational performance

• Since most managers are not computer experts; EIS should be user friendly

• Most EIS use touch screens “ point and click” commands, easy to understand displays such a color graphics, charts and summaries so that little learning is required . Other commands such as find, compare and show allow managers to easily and quickly get information


36CHAPTER FIVE

Characteristics of Best-Selling EISCharacteristics of Best-Selling EIS Few commands to learn Important views saved 3-D charts Geographic dimensions

4.1

Identification ofProblems and Exceptions

Identification ofProblems and Exceptions

Ease of UseEase of Use

Analysis of InformationAnalysis of Information


Compare to standards Trigger exceptions Drill down Detect & alert newspaper Detect & alert robots

Sales tracking Easy-to-understand displays Time periods

37CHAPTER FIVE

IntranetsIntranets

4.1

Private company networks Allow employees to

access, share, and publish information

More than 80 percent of companies havetheir own intranets

38CHAPTER FIVE

Why 80% of Companies Use IntranetsWhy 80% of Companies Use Intranets

4.1

Inexpensive Increase efficiencies and reduce costs Intuitive and easy to use Work across all computer systems Can be built on top of existing network Work with software programs that convert to HTML Software is available at no cost or is less expensive


Thank You


management, organizational policies & practices lecture 13 dr. amna yousaf phd (hrm) university...

Documents

prentice hall

information lecture

information system

access information

pay structurerecap lecture

maintenance costs

netherlandsrecap lecture

validairline maintenance