FREE online courses on Information Technology - Chapter 1 INFORMATION
TECHNOLOGY - THE INFLUENCE OF THE ORGANIZATION
We have been discussing how individuals make decisions. In
most organizations, groups of individuals are involved in making decisions.
However does this group finally reach a consensus and make a decision that
commits the entire firm?
We all have observed different organizations in action and
wondered how decisions are made. There are a number of ways to classify
organizations. Probably the best known form is the
bureaucracy.
Most universities, government agencies and many large organizations fall
into this category. Bureaucracies
are characterized by a large number of management layers. There are many rules
and procedures to protect individuals; if you follow the procedures, how can you
be wrong? Bureaucracies try to survive and to minimize uncertainly; members of
these organizations stress job security. We would expect decisions in
bureaucracies to be conservative and require modest changes in existing
procedures.
The Charismatic organization is dominated by a strong leader.
This individual sets the goals of the firm and tends to make all decisions. His
or her decisions are hard to predict because this kind of leader often does not
reveal plans to the rest of the organization. It is safe to say that the leader
is likely to make the decision that subordinates then execute.
The adaptive organization tries to respond quickly to its
environment. The organization stresses rapid response times and does not have a
large number of layers of management. A small group of decision makers analyze
data and come to decisions quickly.
Although there are many other types of organizations, our
main point is that individuals usually make decisions in the context of some
organization. It is clear that most decisions are not entirely rational as
advocated by an economist. People are not always able to examine all
alternatives and choose a course that maximizes the value of some outcome. The
nature of the organization will influence the decision and the kind of
information that people making the decision require.
Characteristics of
Information
Information can be characterized in a number of ways; some
kinds of information are more suitable for decision making than others. The time
frame for information can be historical or predictive. Historical information
can be used to design alternative solutions and to monitor performance.
Information may be expected or it may be unanticipated. Some information system
experts feel that information is worthless unless it is a surprise to the
recipient. However, information that confirms something also reduces
uncertainty. Surprise information often alerts us to the existence of a problem;
it is also important in developing and evaluating different alternatives.
Information may come from sources internal to the organization or from external
sources, such as government agencies.
Information may be presented in summary form or in detail and vary in accuracy. Summary information is often sufficient for problem
finding but summary and detailed information may be needed for other uses.
Information can be frequently updated, relatively old, loosely organized, or
highly structured. An example of
highly structured information is a report with clear categories to classify all
the information it contains. Loosely organized information might be a report
composed of different forms of information from multiple sources.
