CHAPTER 8

USING IT FOR COORDINATION AND

CONTROL

NOOSHA SAFAHANI & AZARNOOSH ZIAEIUNIVERSITY OF

TEHRAN

transformation by information technology (IT)

Purpose of this chapter

IT systems applied to organizational operations

examines how IT is used for decision making and control

how IT can add strategic value

overview of how IT affects organization design and interorganizational relationships

INFORMATION TECHNOLOGY EVOLUTION

Information Systems for Managerial Control and Decision Making

information reporting system

the most common form of MIS, provides mid-

level managers with reports that summarize

data and support day-to-day decision making.

executive information system(EIS)

higher-level application

facilitates decision making at the highest levels

of management

typically based on software

large amounts

of

complex data

pertinent information

in a

timely fashion

decision support system (DSS)

all levels of the organization

rely on decision models and integrated

databases

users can pose a series of what-if questions to

test possible alternatives

help managers to choose the alternative that will

likely have the best outcome

Information Systems for Managerial Control and Decision Making

A Simplified Feedback Control Model

Management Control Systems

Formal routines, reports and procedures that use

information to maintain or alter patterns in

organizational activities.

Use for planning, budgeting, performance

evaluation, resource allocation, and employee

rewards.

Targets are set in advance, outcomes compared

to targets, and variances reported to managers

for corrective action.

The core of management control systems

IN PRACTICE

If you can’t measure it, you can’t

control it.

Executive dashboard

The core of management control systems

Quality-control system

training employees in quality-control

methods.

setting targets for employee participation.

establishing benchmarking guidelines.

assigning and measuring Six Sigma

goals.

Six Sigma

Six Sigma specifically means ahighly ambitious qualitystandard that specifies a goalof no more than 3.4 defectsper million parts.

Benchmarking

Benchmarking means the process of

persistently measuring products,

services, and practices against tough

competitors or other organizations

recognized as industry leaders.

THE LEVEL AND FOCUS OF CONTROL

SYSTEMS

Department Level

Behaviorcontrol

Outcome control

Organization Level

Balanced Scorecard

Strategy Map

Major Perspectives of the Balanced

Scorecard

Strategy Map for performance

management

Department Level

Behavior control

Outcome control