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Using management and accounting information (Information reduce risk when…
Using management and accounting information
Information reduce risk when making decision
Information and risk
relevant information -> better intelligence and knowledge -> better decision -> provide competitive edge and firm's profit
high information -> low risk
Information rule: ongoing - to shorten time analysing choices, "great simplifier" for decision makers
Difference between data and information:
data: numerical/verbal description from some measurement
information: data presented in useful form for specific purpose
Knowledge management:
database: single collection of data and information stored in one place, used by people in organization to make decision
knowledge management: firm's procedures for generating, using and sharing the data and information
Making smart decision: 3 software
Decision-support system: provide relevant data and information for employees to make decisions, determine effect of changing variables, answer "what ifs" questions
Executive information system: cimputer-based, facilitate and support decision making need of top manager and senior executives by provide access to internal and external information
Expert system: use artificial intelligence to imitate human ability to think -> reccomendation/suggestion (eg: schedule manufacturing task, diagnose illness...)
Business application software
integrated package (many function in single package): word process, desktop publishing, accouting, database management, graphics, spreadsheet
Management information system
provide manager and employee with information distribute timely and useful information for external and internal sources
Information requirment
Financial manager: finance, measure financial health of the firm
Operating manager: present and future sales level, current inventory level of work in process and finished goods, availability and cost of resources to produce goods
Marketing manager: detailed firm's products and competitors: pressing strategy, new promotional campaigns, competitor testing products, customer, current project, new and pending product's legislation
HR manager: employees: wage level. benefit packages. legislation and court decisions
Administrative manager: overall management: coordination of information (consistent)
Employees use management information system
MIS: collect data -> store data -> update data -> process data into information -> present data
Collect data: MIS: establish database: relevant, accurate (internal and external)
internal (common): manager and employees, company records, reports, accounting data...
external: customer, suppliers, finanacial institution, banks.... marketing research
2 caution:
cost of obtaining data (marketing research is high)
people make/cause error -> data and judgement disagree then must check data
Store data: depend on size and needs (computer system)
Update data: depend on how fast things change and how often they are used
Process data: transform data into useful form
verbal data: extract pertinent material from storage and combine into data
statistic: measure and summarise characteristic of entire group of memeber
Present data:
Business report
intro: describe problem. identify reserach technique, previous material
body: objectively describe facts
conclusion: statement of facts
reccomendation: suggest how problem might be solved
Visual display and tables: table display have verbal and numercial information in colums and rows, less impact than visual display