Chapter 14 - Repository UNIKOM
16-1 The Executive Position The Executive Position
Unique demands of the executive position Unique demands of the executive position
Executives require unique information Executives require unique information processing processing
An executive is not just a lower-level manager on a higher level!
16-2
Marketing information system Manufacturing information system Financial information system Human resource information system Environmental information and data
Environmental information and data Top-level managers A Firm Without An EIS
16-3 A Firm With Environmental Information and data
An EIS information Executive system information information information Marketing Manufacturing Financial information resource Human system system system system
Environmental Information and data What Do Executives Do? What Do Executives Do?
Term executive is loosely applied Term executive is loosely applied
- – No clear dividing line between executives and
No clear dividing line between executives and other managers other managers
Executive manager on the upper level of the Executive manager on the upper level of the organizational hierarchy who exerts a organizational hierarchy who exerts a strong influence on the firm strong influence on the firm
Long term planning horizon Long term planning horizon
16-5 Fayol's Management Functions Fayol's Management Functions
Plan Plan
Organize Organize
Staff Staff
Direct Direct
Control Control
16-6 Mintzberg's Managerial Roles Mintzberg's Managerial Roles
Different levels of management perform Different levels of management perform same roles but relative time spent on each same roles but relative time spent on each differs differs
High-level management focus High-level management focus
- – Long-range, entrepreneurial improvements
Long-range, entrepreneurial improvements
- – Responding to unanticipated situations
Responding to unanticipated situations 16-7 Kotter's Agenda and Networks Kotter's Agenda and Networks
John P. Kotter, Harvard professor John P. Kotter, Harvard professor
Executives follow a three step strategy Executives follow a three step strategy
- – Agenda -- objectives the firm is to achieve
Agenda -- objectives the firm is to achieve
- – Networks -- cooperative relationships
Networks -- cooperative relationships »
Hundreds or thousands Hundreds or thousands »
Inside and outside the firm Inside and outside the firm
- – Environment -- norms and values so the
Environment -- norms and values so the network members can achieve agendas network members can achieve agendas
16-8 How Do Executives Think? How Do Executives Think?
Daniel J. Isenberg, Harvard professor Daniel J. Isenberg, Harvard professor
Studied more than one dozen executives Studied more than one dozen executives over a 2-year period over a 2-year period
What they think about What they think about
1. How to get things done
1. How to get things done
2. A few overriding issues
2. A few overriding issues 16-9 How Do Executives Think? (cont.) How Do Executives Think? (cont.)
More concerned with process than solution More concerned with process than solution
Thought processes do not always follow the Thought processes do not always follow the step-by-step patterns of the systems step-by-step patterns of the systems approach approach
Intuition is used at each step Intuition is used at each step
16-10
Mintzberg was first to conduct a formal study
Unique Information Needs Unique Information Needs
Mintzberg was first to conduct a formal study
of executive information needs of executive information needs Studied 5 executives in early 1970s
Studied 5 executives in early 1970s
Five basic activities Five basic activities
- – desk work
desk work
- – telephone calls
telephone calls
- – unscheduled meetings
unscheduled meetings
- – scheduled meetings
scheduled meetings
- – tours
tours 16-11
How Minzberg’s How Minzberg’s
CEOs Spent Time
CEOs Spent Time
Legend: Interpersonal Desk Work 22% Unscheduled Meetings 10% Telephone Calls 6% Scheduled Meetings 59% Tours 3% Unique Information Needs Unique Information Needs
Jones & McLeod Study
Jones & McLeod Study Studied 5 executives in early 1980s
Studied 5 executives in early 1980s Questions
Questions 1) How much information reaches the executive ?
1) How much information reaches the executive ? 2) What was the information value ?
2) What was the information value ? 3) What are the information sources ?
3) What are the information sources ?
4) What media are used to communicate the information ?
4) What media are used to communicate the information ?
5) What use is made of the information ?5) What use is made of the information ? 16-13
The Volume of Information Reaching the Executives
HIGH HIGH HIGH HIGH HIGH HIGH HIGH HIGH HIGH HIGH AVG AVG LOW LOW AVG AVG LOW LOW AVG AVG LOW LOW AVG AVG LOW LOW Bank CEO Vice President of Tax
10 20 30 40 50 60 Retail Chain CEO Insurance President Vice President of Finance AVG AVG LOW LOW N u m b e r o f T ra n s a ct io n s
16-14 Jones & McLeod Study (cont.) Jones & McLeod Study (cont.)
How much information reaches the How much information reaches the executive executive
- – A transaction - a communication involving any
A transaction - a communication involving any medium medium
- – Daily volume
Daily volume »
Varies from executive to executive Varies from executive to executive »
Varies from day to day Varies from day to day
16-15
The Value of Information Reaching Executives
30 Bank CEO s n
25 Vice President io of tax ct sa
20 an All five tr
15 f executives o ge
10 ta n
5 ce er P 0 1 2 3 4 5 6 7 8 9 10 Value 16-16
Sources of Information Sources of Information
Some executives went down 7 levels to Some executives went down 7 levels to gather information gather information
Sources were internal and external Sources were internal and external
External sources provided the most volume External sources provided the most volume but also the lowest average value but also the lowest average value
16-17
The Sources of Information Reaching the Executives
The Sources of Information Reaching the Executives Upper levels Upper levels
.05 .05
5.2
5.2
Committees Committees Environment Environment .43 .43 The Internal support units Internal support units .02 .02 7.5 7.5 3.8 3.8 executive executive The and individuals and individuals .20 1 level down .20 1 level down .13 .13 4.6 4.6 2 levels down 2 levels down5.2 5.2 .10 .10 5.3 5.3 Legend: 3 levels down 3 levels down .06 .06
Legend: Percentage of Percentage of total total 4 levels down 4 levels down
4.3 4.3 actions trans- trans- actions transaction transaction Average Average 16-18 .02 .02 value value
Media Used for Communication
Media Used for Communication Written media accounts for 61% of the
Written media accounts for 61% of the transactions transactions
- – Computer reports
Computer reports
- – Letters and memos
Letters and memos
- – Periodicals
Periodicals
Oral media is preferred by executives Oral media is preferred by executives
- – Tours
Tours
- – Business meals
Business meals
- – Telephone calls
Telephone calls 16-19 The Executive Does not Control: The Executive Does not Control:
Letters Letters
Memos Memos
Telephone calls Telephone calls
Unscheduled meetings Unscheduled meetings
16-20 The Media Pie The Media Pie
(in Percentages of Total Transactions) (in Percentages of Total Transactions)
Written Written Oral Oral Note: Note: Percentages do not add to 1.00 due to rounding Computer Computer Reports (.03) Reports (.03) Noncomputer Noncomputer Reports (.09) Reports (.09) Memos (.19) Memos (.19) Letters (.20) Letters (.20) Periodicals (.10) Periodicals (.10) Business Business Meals (.02) Meals (.02) Telephone Telephone Calls (.21) Calls (.21) Unscheduled Unscheduled Meetings (.06) Meetings (.06) Scheduled Meetings (.05) Scheduled Meetings (.05) Tours (.03) Tours (.03)
Ranking of Media by Value
Ranking of Media by Value
Medium Mode Average Value Medium Mode Average Value Scheduled meetings Oral 7.4 Scheduled meetings Oral 7.4 Unscheduled meetings Oral 6.2 Unscheduled meetings Oral 6.2 Tours Oral 5.3 Tours Oral 5.3 Social activity Oral 5.0 Social activity Oral 5.0 Memos Written 4.8 Memos Written 4.8 Computer reports Written 4.7 Computer reports Written 4.7 Noncomputer reports Written 4.7 Noncomputer reports Written 4.7 Letters Written 4.2 Letters Written 4.2 Telephone calls Oral 3.7 Telephone calls Oral 3.7 Business meals Oral 3.6 Business meals Oral 3.6 Periodicals Written 3.1 Periodicals Written 3.1
Information Use by Decisional Role
Disturbance handler (.42) Entrepreneur (.32) Resource allocator (.17) Unknown (.06) Negotiator 16-23 Jones & McLeod Study Findings Jones & McLeod Study Findings
Most executives’ information came from
Most executives’ information came from environmental sources, but the internal environmental sources, but the internal information was valued higher information was valued higher
Most of the executives’ information came in
Most of the executives’ information came in written form, but the oral information was written form, but the oral information was valued higher valued higher
Executives receive very little information
Executives receive very little information directly from a computer directly from a computer
16-24
Disturbance .42 handler Entrepreneur .32 Resource allocator .17
Negotiator .03 Unknown .06 Environment .43 Lower levels .38 Internal support units & individuals .13 Upper levels .05 Committees .02
Sources of Decisional Information Sources of Decisional Information
Unique Information Needs Unique Information Needs
Study conducted by John Rockart and Study conducted by John Rockart and
Michael Treacy, both of MIT Michael Treacy, both of MIT
Studied 16 companies in early 1980s Studied 16 companies in early 1980s
Found many computer users Found many computer users
Found some executives interested in detail Found some executives interested in detail
Coined the term “executive information Coined the term “executive information system” system”
16-26 EIS Features EIS Features
A central purpose
A central purpose
A common core of data A common core of data
Two principal methods of use
Two principal methods of use
- – Retrieve reports
Retrieve reports
- – Conduct analyses
Conduct analyses
A support organization A support organization
- – EIS coach
EIS coach
- – EIS chauffeur
EIS chauffeur From Rockart and Treacy 16-27
Putting Computer Use in Putting Computer Use in
Perspective Perspective
Two key points: Two key points:
1. Computer use is personal
1. Computer use is personal
2. Computer produces only a portion of the
2. Computer produces only a portion of the executive's information executive's information
16-28 Suggestions to Improve EISs Suggestions to Improve EISs
1. Take an inventory
1. Take an inventory
2. Stimulate high-value sources
2. Stimulate high-value sources
3. Take advantage of opportunities
3. Take advantage of opportunities
4. Tailor the system to the executive
4. Tailor the system to the executive
5. Take advantage of technology
5. Take advantage of technology
16-29
Personal computer Make corporate information available Information requests Executive database Corporate database Electronic mailboxes Software library Current news, explanations External data and information Information displays Executive workstation Executive workstation Corporate mainframe Corporate mainframe
To other executive workstation To other executive workstation
An EIS Model
16-30
Make corporate information available Information requests
Executive database Corporate database Electronic mailboxes Software library
Current news, explanations
External
data and
Information displays Executive workstation
Corporate mainframe To other executive workstation To other executive workstation
An EIS Model 16-31
Dialogue Between Dialogue Between
Executive and EIS Executive and EIS
Typically by a series of menus, keyboarding Typically by a series of menus, keyboarding is minimized is minimized
Drill down to specific information needed Drill down to specific information needed from the overview level from the overview level
16-32
MEDIAL INTERNATIONAL GROUP MIG MEDIAL INTERNATIONAL GROUP MIG N P U P 100 200 300 400 500 N P U P Actual/P lanned Product Profitability Product Profitability Analysis Analysis Magazines in Europe have been Magazines in Europe have been performing poorly. While sales performing poorly. While sales are up, production costs have are up, production costs have soared. This is due to the labor soared. This is due to the labor disputes in the pulp and paper disputes in the pulp and paper industry. Starting next month, industry. Starting next month, costs should be back in line costs should be back in line with earlier projections. with earlier projections. Actual Planned Variance %Variance
Newspapers 1,421,709 1,559,184 (137,475) (8.82) Magazines 490,855 518,687 (27,832) (5.37) Periodicals 1,912,564 2,077,872 (165,308) (7.96) Actual Planned Variance %Variance Newspapers 1,421,709 1,559,184 (137,475) (8.82) Magazines 490,855 518,687 (27,832) (5.37) Periodicals 1,912,564 2,077,872 (165,308) (7.96) x
An Information Display That Includes a Computer-
Generated Narrative Explanation
Generated Narrative Explanation
Incorporation of Incorporation of
Management Concepts Management Concepts
Critical success factors Critical success factors
Management by exception Management by exception
Mental model Mental model
- – Information compression
Information compression 16-34
500 2000 1000 1500 90 91 92 93 94 J F M A M J J A S O N D 95 96 97 98 99 SALES - $ IN MILLIONS AS OF NOVEMBER 1994 SOURCE GLORIA YANDERS BILL BLASS
SALES
SALES CURRENT HISTORY YEAR TO DATE OVER/ UNDER MB PROGRAM ACTUAL THIS MO LAST MO HERC $861.4 $30.7 $59.1
C-5B 621.9 0.3 4.5 OTHER 398.7 12.9 10.1 TOTAL $1,882.0 $43.9 $44.4 YEAR-END FORECAST CURRENT FORECAST Y-L O/U MB YR CURRENT O/ U PRIOR $949.8 $28.6 95 $2102.6 $ 8.0 699.0 1.2 96 2400.0 105.0 458.8 13.6 97 3130.0 98.0 $2107.6 $43.4 98 3390.0 58.0 99 2110.0 281.0 COMMENTS COMMENTS FAVORABLE VARIANCE PRIMARILY DUE TO TWO ADDITIONAL HERCULES FAVORABLE VARIANCE PRIMARILY DUE TO TWO ADDITIONAL HERCULES SALES SALES FORECAST BUDGET ACTUAL 16-35
EIS Implementation Decisions EIS Implementation Decisions
Three Key Questions: Three Key Questions:
1. Do we need an EIS?
1. Do we need an EIS?
2. Is there application-development software
2. Is there application-development software available? available?
3. Should we purchase prewritten EIS
3. Should we purchase prewritten EIS software? software?
16-36 Advantages of Prewritten Advantages of Prewritten
Software Software
1. Fast
1. Fast
2. Doesn't strain information services
2. Doesn't strain information services
3. Tailored to executives
3. Tailored to executives
16-37 EIS Critical Success Factors EIS Critical Success Factors
Rockart and DeLong Rockart and DeLong
5. Data management
8. Manage the spread and evolution
7. Manage organizational resistance
7. Manage organizational resistance
6. Link to business objectives
6. Link to business objectives
5. Data management
4. Appropriate information technology (IT)
1. Committed/informed executive sponsor
4. Appropriate information technology (IT)
3. Appropriate information services staff
3. Appropriate information services staff
2. Operating sponsor
2. Operating sponsor
1. Committed/informed executive sponsor
8. Manage the spread and evolution 16-38
Prerequisite Activities for the EIS
Information Information needs technology standardsAnalysis of Organization Corporate data model Information Systems Plan Purchasing and Performance Systems EIS 16-39 Future EIS Trends Future EIS Trends
Use will become commonplace Use will become commonplace
Decreasing software prices Decreasing software prices
Will influence MIS/DSS Will influence MIS/DSS
The computer will always play a support The computer will always play a support role role
16-40
Executives have unique information needs
Summary Summary
Executives have unique information needs
- – Need for EIS
Need for EIS
- – Specific uses of EIS
Specific uses of EIS
EIS development EIS development
- – Personal productivity software
Personal productivity software
- – Prewritten
Prewritten
- – Custom
Custom
EIS success factors EIS success factors
16-41