Characteristics of Information
-Accurate information is error free. In some cases, inaccurate information is generated because inaccurate data is fed into the transformation process. (This is commonly called garbage in, garbage out [GIGO].)
-Reliable information can be depended on. In many cases, the reliability of the information depends on the reliability of the data-collection method. In other instances, reliability depends on the source of the information. A rumour from an unknown source that oil prices might go up might not be reliable.
- Information should be verifiable. This means that you can check it to make sure it is correct, perhaps - by checking many sources for the same information.
- Information should be secure from access by unauthorized users
-Complete information contains all the important facts. For example, an investment report that does not include all important costs is not complete.
-Flexible information can be used for a variety of purposes. For example, information on how much inventory is on hand for a particular part can be used by a sales representative in closing a sale, by a production manager to determine whether more inventory is needed, and by a financial executive to determine the total value the company has invested in inventory.
- Information should be simple, not overly complex. Sophisticated and detailed information might not be needed. In fact, too much information can cause information overload, whereby a decision maker has too much information and is unable to determine what is really important.
-Timely information is delivered when it is needed. Knowing last week’s weather conditions will not help when trying to decide what coat to wear today.
-Relevant information is important to the decision maker. Information showing that lumber prices -might drop might not be relevant to a computer chip manufacturer.
- Information should also be relatively economical to produce. Decision makers must always balance the value of information with the cost of producing it.
- Information should be easily accessible by authorized users so they can obtain it in the right format and at the right time to meet their needs. Chapter 2 - Information Systems in Organizations
• Organizational structure:
-Organizational subunits and the way they relate to the overall organization -Depends on organization’s goals and its approach to management
• Types of organizational structures:
Michael Porter’s Five Forces Model
• A widely accepted model that identifies five key factors that can lead to attainment of competitive advantage:
1. The rivalry among existing competitors
2. The threat of new entrants
3. The threat of substitute products and services
4. The bargaining power of buyers, and
5. The bargaining power of suppliers.
Rivalry among existing competitors:
- Industries with stronger rivalries tend to have more firms seeking competitive advantage • Typically, highly competitive industries are characterized by high fixed costs of entering or leaving the industry, low degrees of product differentiation, and many competitors.
Threat of new entrants:
-Threat appears when:
-Entry and exit costs to an industry are low
-Technology needed to start and maintain a business is commonly available
• In the restaurant industry, competition is fierce because entry costs are low. Therefore, a small restaurant that enters the market can be a threat to existing restaurants.
Threat of substitute products and services:
-The more consumers can obtain similar products and services that satisfy their needs, the more likely firms are to try to establish competitive advantage.
• Bargaining power of customers and suppliers:
- Large customers tend...
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