MG213: Week 1 - Information and the Enterprise
Information Systems in Management
Humans cannot remember all the information they need for business (face bounded
rationality), so structures must be organised to overcome this (i.e. information systems).
Information systems - The way information and communication technology (ICT) is used to
support human activity in organisations (Beynon-Davis).
Information systems are Socio-technical as they consist of people, using technology to
undertake tasks within some form of structure (Leavitt’s Diamond)
Importance of Information Systems in Modern Management
Today information system is dominate in Management due to the following changes:
1. Digital Abundance: Rather than an absence of data, companies face a vast flood of data.
2. Connection & Coordination: Internet technology & technology standards have allowed us to
connect together technology in ways which are starting to have major influence.
o New devices communicate to one another through different technologies
Information Technology, combine to form the information system, and include all inventions made
by people to handle a problem (E.g. paper, bikes)
Dabbawalla Case
The Information system involved technologies such as Dabbas, Bikes and a unique colour
coding system, which enables the identification of dabbas to their end location
o The coding system has led to the Dabbawallas being highly efficient - only 1 error in
6million deliveries in 2008.
The case shows that the information technologies and system an organisation utilises should
be constantly reviewed and adapted to meet the changing context
o The worsening traffic in Mumbai has led to the dabbawallas using bikes instead of
the previously used hand carts to move between train stations
o Greater security checks due to terrorism threat - deliveries only carried out for those
with permanent Mumbai addresses, and the goods are checked for a few months
o Websites are being used within the information system recently, in order to raise
publicity and increase the customer base
o Due to many women joining the workforce, Dabbawallas now also take deliveries
from restaurants for customers
o New technology has meant, they allow people to utilise new thermos containers,
rather than steel dabbas, however this must be the same size and shape as the steel
ones to fit into the current system.
The case also highlights how important It is to not include technologies which have a
negative impact on the overall information system.
o E.g. to expand revenue streams, they began a advertising pamphlet distribution
service, however this made the current system less effective so was stopped
Utilise a hierarchical structure, in which each group has a supervisor, from which members
are elected to the two overseeing committees to discuss and resolve issues the other
members face and discuss logistical issues. - promotion based on years in the service
, Loosely follow a profit-sharing system, which was adopted in 1983, before which the
workers simply received salaries. Under the new system, each worker in in charge of their
own customers and finances and operational activities
Socio-Technical Nature of Information Systems
We adopt a “socio-technical” perspective towards these information
systems - as they are systems in which technologies and people work
together on tasks within some form of structure. (Leavitt’s Diamond, 1964)
Technologies – computer-based information handling dominates
modern information systems
People – who work with, are part of, or use information systems
Tasks – that “someone” wishes to undertake
Structures – social and organisational structures within which such systems are established.
(e.g. factory, firm, community, society, government, hospital).
The Dabbawalla case follows the above structure too which shows it too follows the socio-technical
perspective.
History of Information Systems
We have a long history of using digital technology in companies (e.g. computers since 1950s)
Moore’s & Metcalf’s Law - Key to understand the changes in IT
1. Moore’s Law (1965) - the power of a computer chip doubles every 18-24 months, therefore
showing us that computing power is on an exponential path
2. Metcalf’s Law - value of a telecommunications network is proportional to the square of the
number of connected users of the system (n2), due to the ‘network effect’(Shapiro and Varian
1998). I.e. Telephone is worthless unless more than one person has it to build a network
Digital Artefacts
Digital artefacts (e.g. Software) are generative, distributed, edited and recreated, therefore allowing
it to be shared, whereas this is not possible with physical artefacts (e.g. physical items)
Hardware - the physical stuff of a computer
Software - the instructions which tells the hardware what to do. Two significant pieces of software are:
o Operating System - controls the hardware and ensures Apps/Software plays nicely.
o Compiler - turns text files into the binary codes that the hardware machine can understand.
Programming thus involves writing the text files and getting a compiler to turn that into code.
,Enterprise Applications & Evolution
The growth in Cloud Computing, Open standards, Application Programming, due to the
commodification and standardisation of basic computing infrastructure, has meant firms focus on
designing the right digital infrastructure
Firms employ a large variety of different computerised information systems which in combination
form digital infrastructures that underpin their information processing capabilities.
While different types of information systems can be analytically separated based on their intended
purposes, large enterprise systems often include and integrate various types of systems into a more
comprehensive solution that is able to cater specific requirements of different users. For example:
Customer Facing
o Typically include websites, such as shops (Amazon) and marketplaces (eBay,
Farfetch), and mobile applications (British Airways, Uber) through which customers
can purchase products use their services.
o customer-facing systems are often directly integrated into operative information
systems, which process transactional and operative data.
Product Design & Industrial Application
Internal & Operative Systems
o Transaction Processing systems (TPS) - automate basic business transactions, such
as invoices and orders. Allows for efficiency improvements and little human input.
o Customer relationship management (CRM) - allow customer-service personnel to
view purchase and service histories when interacting with customers.
o Decision-support (DSS) - allow managers and executives to model data and simulate
various business scenarios, whereas routine and straightforward decision-making
can be programmed into business rules of business process management software.
o Enterprise resource planning systems (ERP) - as large-scale integrated systems with
centralised and shared databases, are heavily relied upon by large organisations in
planning and managing their resources
, MG213: Week 2 - Evolution of Information Systems in Management
What is Information?
Information systems play a crucial role in the control and coordination of organisations - during a
firm’s daily operations, information is processed and created
The word information has multiple meanings depending on what particular aspect of information
the speaker wants to emphasise. The types of information include:
Data - refers to numbers, text, and symbols which are not tied to a specific context.
Information - refer to data which carries meaning in a particular context.
Knowledge - refers to wider understanding against which the interpretation of novel
information takes place.
Academic literature consists of multiple theories that seek to explain different aspects of
information:
Claude Shannons - Theory of information is a probabilistic model that focuses on the
reliability of replication of information between a sender and receiver over an unreliable
communications channel.
Gregory Bateson - defined information as “difference that makes difference”, indicating that
for information to happen, one must be able to spot a difference and that this difference
should trigger some subsequent action
Theories of Speech Acts - Speech acts are a form of statements (information) that trigger
changes by delivering promises, orders and invitations and agreements, such pronouncing a
couple as husband and wife or declaring war
Symbol Systems - different objects and phenomena are encoded and represented in
symbolic expressions, such as languages and mathematical formulas. These are human-
made representations of material objects, social affairs and abstract ideas, and therefore
information can be considered as relativistic and subject to human interpretation.
Economic value of information
Information in its different forms is a valuable asset carrying economic value, as it plays a central in
the control and coordination of work, material and monetary resources.
Along the internal and operative information, organisations gather information on external market
conditions and customer behaviour to plan and prepare for tactical and strategic actions.
Therefore, organisations invest sizeable sums in the development of information systems that are
able to tap into data flows that are essential to their business models and operations. For example:
Financial services - access to Bloomberg terminals
product-oriented companies - advertise on Facebook and Google
Intellectual property rights can be used to protect information systems, technologies and assets,
which can then be commercialised through licensing agreements.
