Normas Internacionales de Contabilidad

Influences on the interpretation and use of information.

addition to these variables, we suggest the importance of personal and situational factors in the interpretation of information. We shall examine each of these fac­ tors to see how they influence the interpretation process. (See Figure 2- 1.)

Clearly, the nature of the problem influences the way we interpret information. How serious is the decision? What are the consequences of an incorrect decision, and how do they compare with the benefits of a correct one? An important decision

28 PART ONE: THE ROLE OF MANAGERS IN INFORMATION TECHNOLOGY

may require more care in analyzing data than would a minor decision. For example, a bank's decision to merge with a stock brokerage firm is more important than its decision to lease additional office space. In such a strategic decision as whether to merge, the consequences and costs involved, plus the impact on the organization, require that information be scrutinized much more closely.

The organization itself affects the inte

rP

retation of information. Studies have shown that the individual becomes socialized by the organization. Over time we are influenced by our organizations in the way we approach problems. Thus, in most instances, the attitudes of a new employee will differ substantially from those of the chairman of the board. As the new employee associates over the years with other employees of the firm, he or she is influenced by their attitudes and by the environment of the workplace. Gradually, new employees begin to change their at­ titudes to be more consistent with those of their associates.

People who have different ideas interpret information differently. Again, many of a person's ideas are influenced by peers and by the socialization process in the particular organization where the individual works. Several individuals trying to influence the government to regulate prices in an industry may use the same infor­ mation. However, the head of a corporation in the industry, the leader of a con­ sumer group, and a goveniment decision maker in a regulatory agency will proba­ bly interpret the same information differently.

Personal and situational factors also influence the interpretation of information. One study done many years ago showed that given comparable information, deci­ sion makers interpreted a problem differently depending on their position. In this exercise, finance executives saw financial problems, sales executives recognized sales problems, and so forth. In all the given scenarios, the information was the same-it was just interpreted differently (Dearborn and Simon, 1 958). (A more re­ cent study found managers are getting less parochial, though personal experience suggests that many managers are heavily influenced in problem diagnosis by their backgrounds and position.)

Psychologists studying the thought patterns of individuals have developed the concept of cognitive style. Although there is no agreement on exactly how to de­ scribe or measure different cognitive styles, the concept is appealing since peo­ ple do seem to have different ways of approaching problems. One of the sim­ plest distinctions is between analytic and heuristic decision makers. The analytic decision maker looks at quantitative information. Engineering is a pro­ fession attractive to an analytic decision maker. The heuristic decision maker, on the other hand, is interested in broader concepts and is more intuitive. Most researchers believe that we are not analytic or heuristic in every problem but that we do have preferences and tend to approach the same type of problem with a consistent cognitive style.

A Model for Interpreting Information

We have suggested a number of factors that influence the interpretation of in­ formation. How are all these factors combined? What is their net impact on the

FIGURE 2·2

Model for interpreting information.

CHAPTER 2: INTERPRETING AND UNDERSTANDING INFORMATION 29

interpretation of information? Figure 2-2 summarizes all the variables described above. The figure portrays one representation of how a user of information sys­ tems develops a model to interpret information and how he or she would con­ stantly execute and revise the model.

In the model, to interpret data a decision maker draws on current data and a his­ tory of past decisions and their results. The interpretation turns data into informa­ tion, and the decision maker takes some action. He or she observes the results and stores them for future reference.

We expect the model to be formed inductively by the decision maker and to be heavily influenced by beliefs. For example, a decision maker may observe data on sales and production over time and find that these data seem to predict customers'

30 PART ONE: THE ROLE OF MANAGERS IN INFORMATION TECHNOLOGY

reactions to a product. The decision maker is building an interpretational model based on his or her beliefs and analysis of historical data and observations.

After testing the interpretational model and developing confidence in it, the de­ cision maker uses the model deductively. He or she observes data and uses the model to interpret them. Now, the decision maker perceives data on sales and pro­ duction as constituting information on product acceptance; he or she may even ig­ nore other information conveyed by these data.

After an interpretational model has been formed, further experiences are fed back to modify the model. Past decisions, problems, and experiences all influence the future interpretation of information. These experiences are based on actions taken on the basis of information and the results of those actions. If changes in a new product based on sales and production data increase sales, the interpretational model described above will be reinforced.

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 alter­ native solutions and to monitor performance. Information may be expected or it may be unanticipated. Some information systems experts feel that information is worthless unless it is a surprise to the recipient. However, information that con­ firms something also reduces uncertainty. Surprise information often alerts us to the existence of a problem; it is also important in developing and evaluating differ­ ent 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 accu­ racy. Summary information is often sufficient for problem finding, but summary and detailed information may be needed for other uses. Information can be fre­ quently updated, relatively old, loosely organized, or highly structured. An exam­ ple of highly structured information is a report with clear categories to classify all the information it contains. Loosely organized information might be a report com­ posed of different forms of information from multiple sources.

In general, different types of decisions require different kinds of information and providing inappropriate information is one common failing of information systems. (See Table 2-1.) Operational control decisions are characterized by his­ torical information. Usually the results are expected and the source of the informa­ tion is the internal operations of the organization. The data-for example, produc­ tion control data, inventory status, or accounts receivable balances-must be detailed. Because operational control decisions involve day-to-day operations of the firm, information often must correspond closely to real time. This information is often highly structured and precise.

Information for strategic decisions, on the other hand, is more predictive and long range in nature. Strategic planning may uncover many surprises. Often, ex­ ternal data on the economy, the competition, and so forth are involved in strategic decision making. Summary information on a periodic basis is adequate; there is

TABLE 2·1

CHAPTER 2: INTERPRETING AND UNDERSTANDING INFORMATION 31

INFORMATION CHARACTERISTICS VERSUS DECISION TYPES

Characteristics Time frame Expectation Source Scope Frequency Organization Precision Operational control Historical Anticipated Largely internal Detailed Real time Highly structured Highly precise Decision type

Managerial control Strategic planning

Predictive Surprise Largely external Summary Periodic Loosely structured Not overly precise

usually no need for highly detailed or extremely precise information. Strategic­ planning decisions are usually characterized by loosely structured information. The requirements for managerial control decisions fall between operational con­ trol and strategic planning.

Obviously, there are many ways to classify information, and this complicates the decision maker's problem in expressing what output is desired from an information system. The most important thing for the user of an information system to be aware of is the intended use of the information and the type of decision he or she is facing. Then the user should try to decide on the general characteristics of the information needed, using categories such as these as guidelines to develop more detailed infor­ mation requirements. Consideration of similar characteristics should enable the user to avoid requesting grossly inappropriate information from an information system. FROM INFORMATION TO KNOWLEDGE

Knowledge is a strategic resource for many organizations. We can define knowl­ edge as "information plus know-how" (Kogut and Zander, 1 992). Information alone is not enough to produce knowledge; we must also understand the best way to use information to solve a problem, contribute to a product or service, or make a similar contribution to the organization. Knowledge builds over time in the heads of employees in the form of past decisions, processes in the organization, charac­ teristics of products, interests of customers, and similar experiences.

A colleague of mine likes to tell the story of a New England company that de­ cided to move to the South. It offered all current employees jobs but would pay the moving expenses only of employees above a certain management level. When the company left for its new location, most of the staff stayed behind. Within a year, the company was bankrupt. It had lost the knowledge that the staff possessed on how to run the business. Customers did not like dealing with new order processing and customer service staff members who did not know their business and needs. These customers began to place their orders with competitors, and the firm could not survive its loss of knowledge from the staff it left behind.

32 PART ONE: THE ROLE OF MANAGERS IN INFORMATION TECHNOLOGY

Information technologies have the potential to replace the functions performed by mort­ gage bankers, according to the president of Freddie Mac. Internet mortgage sites are encroaching on the traditional banker as a source of information; some of them allow the home buyer to close on a mortgage on-line.

Before the closing, of cou rse, an ap­ proval is req u ired. A banker checks the credit of a mortgage applicant and deter­ mines the likelihood that he or she will be able to repay the loan. Computerized un­ derwriting systems are reducing the time and effort required to check on credit, with the time from application to closing drop­ ping from weeks to days. Anyo n e who wishes to be in the mortgage business can evaluate a borrower's credit with a com­ puterized system; an experienced mort­ gage banker is no longer needed for this task.

The p resident of Freddie Mac thi n ks that technology will force a consolidation of the industry and that a number of tradi­ tional firms will no longer be in business in the future. Freddie Mac and Fannie Mae dominate the purchase of mortgages for re­ sale as securities to investors. Freddie Mac

offers an automated underwriting system that is being used by 700 lenders to com­ pute a "score" for 1 000 mortgages a week. The system cuts closing costs by $300 to $650 for the borrower. About 1 000 mort­ gage originators use Fannie Mae's under­ writing system for 1 0,000 transactions per month.

The Freddie Mac Loan Prospector sys­ tem evaluates whether the loan will be ac­ ceptable for immediate sale to the agency. The system uses statistical methods to fore­ cast the creditworthiness of the borrower consistently and accu rately; the agency claims the prog ram outperforms h u man mortgage bankers. Freddie Mac estimates that systems like this could save borrowers $2 billion a year in closing costs. Some ap­ plicants will be moved out of subprime cate­ gories into conventional mortgages at a sav­ ings to them of up to $ 1 00 million a year in interest payments.

Fannie Mae has experienced a 1 4 per­ cent rise in productivity as measured by its annual mortgage origination volume divided by employees in mortgage banking. The

(continued)

Highly developed countries are in a "post-industrial" age; they have far more employees in the services industry than in manufacturing. Most of these people work with information and rely on their knowledge to earn income; employees in this sector are often called "knowledge workers." For such organizations, knowl­ edge is a strategic resource; it is valuable and hard to imitate. Imagine a company like Andersen Consulting with over 45,000 employees worldwide. When a new client approaches Andersen Consulting with a problem, there is probably someone at the consulting firm that has relevant knowledge to help solve the problem. An­ dersen's consultants represent a huge investment in knowledge; the firm's chal­ lenge is to capture that knowledge and make it available throughout the world. An­ dersen Consulting uses information technology, including groupware and an Intranet, to help meet this challenge.

It is instructive to look at different types of knowledge; Nonaka (1994) distin­ guishes between explicit and tacit knowledge. Explicit knowledge is represented

CHAPTER 2: INTERPRETING AND UNDERSTANDING INFORMATION 33

technology has also reduced paper, substi­ tuting electronic appl ications, which the agencies return i n four minutes. An Elec­ tronic Mortgage Registration System com­ pletes the process; there will be no more paper mortgages to burn when the borrower makes the final payment. Freddie Mac and Fannie Mae are working with lenders, title companies, real-estate agents, and informa-

tion providers to make loan tracking elec­ tronic, further reducing paper.

The mortgage loan application process involves customers, information, statistical analysis, decision makers and a variety of organizations. It is a vivid example of how to apply different kinds of technology to support a complex task.

by facts. Our formal education provides a great deal of explicit knowledge. This text is an example of an attempt to present explicit knowledge to you, knowledge about information technology and how to manage it in an organization. Tacit knowledge is something we understand but have difficulty explaining. A good ex­ ample of tacit knowledge is the ability to ride a bicycle. Many people can ride a bicycle, but it is very hard to explain in words to someone how to master this skill; our knowledge about bike riding is tacit. By internalizing explicit knowledge, we turn it into tacit knowledge. If you are able to articulate tacit knowledge, you may be able to convert it to explicit knowledge for others to use.

How do companies acquire knowledge? The most obvious way is through expe­ rience, working with products, services, customers and suppliers. Knowledge often comes from beginning to understand cause and effect relationships. Almost everything that one does in an organization presents a learning opportunity. Re­ search and Development departments, new product groups, engineers, and similar

34 PART ONE: THE ROLE OF MANAGERS IN INFORMATION TECHNOLOGY

groups are formal efforts of the firm to create and acquire knowledge. One impor­ tant job for a manager is to foster the development of organizational knowledge and to create an organization that learns as it operates.

The "lecision.Making Process

-"'<

We have suggested that one important role of information systems is to support decision making. How do people make decisions?

Problem Finding and Solving

We must be aware of a problem before we can make a decision. A problem exists when the decision maker's ideal situation differs from reality, for example, when sales are below expectations. This example corresponds to something we call dis­ turbance handling; the manager discovers a discrepancy between the ideal model and reality, and attempts to find some way to eliminate the discrepancy.

After noting the existence of a problem, the decision maker must decide what caused it. Are inventories up? Is the advertising budget too low? After determin­ ing the cause or causes, the decision maker tries to solve the problem by develop­ ing some program to remedy the situation. There is also another type of problem­ finding activity undertaken by the manager who is looking for improvement projects. In this sense, the problem can be defined by asking, "What else could we be doing at the present time?" The manager is trying to anticipate problems and plan for them.

The tremendous amount of information available in corporate databanks or data warehouses combined with the vast information resources of the World Wide Web on the Internet make problem finding an extremely important mana­ gerial activity. You must learn how to discover that a problem exists and then use the variety of resources available through computers and networks to locate data. You will use the data to both understand the problem and develop a solu­ tion for it.

Types of Decisions

Not all decisions are alike; some involve different levels of the organization and some are more important than others. Anthony (1965) suggests that there are three broad categories of decisions made in organizations, a model still widely used today.

Strategic Planning In strategic planning the decision maker develops objectives and allocates resources to obtain them. Decisions in this category are characterized by long time periods and usually involve a substantial investment and effort. The de­ velopment and introduction of a new product is an example of a strategic decision. Managerial Control Decisions involving managerial control concern the use of resources in the organization and often include personnel or financial problems. For example, an accountant may try to determine the reason for a difference be­ tween actual and budgeted costs.

CHAPTER 2: INTERPRETING AND UNDERSTANDING INFORMATION 35

Operational Control An operational control decision covers the day-to-day problems that affect the operation of the firm: What should be produced today in the factory? What items should be ordered for inventory?

Who makes the preponderance of each of the three types of decisions? Anthony does not specify who handles each type of decision. However, from the nature of the problems, we suspect that top managers in the organization would spend more

In document Indicadores de gestión de los procesos contables y la rentabilidad del laboratorio Opumarsa cantón Santa Elena, provincia de Santa Elena, año 2017 (página 58-64)