Strategic Information Management

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Strategic Information Management

Strategic Information Management

Task 1: Impact of Management Information on Decision Making

The end of the 20th century saw economic boundaries between countries crumble, as businesses became more complex, global, and knowledge driven. Managers needed to ensure that their company's continuously innovated and improved in order to achieve and maintain a sustainable competitive edge. In fact Porter (1985) highlights that it is this competitive ability which is considered to be at the core of the success or failure of a firm. Managers realised that if their companies are to survive in this dynamic and uncertain environment, they have to make decisions concerning new business opportunities, products, customers, suppliers, markets, and technical developments very quickly. They also have to be aware of what "cultural" factors gave other firms the competitive edge.

Daft and Lengel (1984, pp. 191-233) note that the design of organisations, in fact the very act of organising, reflects the use of different methods of handling information and the use of teams, task forces or vertical information systems all reflect information processing needs within organisations. An organisation skilled at creating, acquiring, organising, and sharing knowledge is able to adapt its goals and behaviour to reflect new knowledge. Choo (1996) refers to such an organisation as an information-savvy "intelligent learning organisation". The critical success factor for successful management is the strategic use of information and a positive correlation has been found between management success and effective information needs assessment, gathering and use (Goodman, 1993). While relevant and timely information allows managers to make accurate decisions, irrelevant information makes decision making difficult, adds to confusion, and affects the performance of the company. Therefore it is crucial that managers are aware of what information they require, how to acquire it and how to maximize the use of it in order to survive and prosper in today's information-intensive environment. Managers need to use information not only for decision making and making sense of changes and developments in their external environment but also to generate new knowledge which can be applied to design new products and services, enhance existing offerings and improve organisational processes (Choo, 1996). On the other hand it is also suggested that managers do not characteristically solve problems but only apply rules and copy solutions from others (March, 1991). In either case the need is access to information. Therefore information can be identified as the critical resource for decision making and management considered an information-intensive activity which requires a close relationship between decision making and information use.

Managers, managerial activities and decision making

Cyert et al., (1956) imply that management is a series of decision making processes and assert that decision making is at the heart of executive activity in business. But decisions need to be made fast, especially in the current context where the most precious and least manageable commodity available to managers is time. Hales (1986) identifies research studies conducted over a period of thirty years which form the major source of evidence of what managers do and show ...
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