Effective Management 7th Edition
Chapter 15: Managing Information
Pedagogy Map
This chapter begins with the learning outcome summaries and terms covered in the chapter, followed by a
set of lesson plans for you to use to deliver the content in Chapter 15.
Lesson Plan for Lecture (for large sections)
Lesson Plan for Group Work (for smaller classes)
Assignments with Teaching Tips and Solutions
Highlighted Assignments Key Points
What Would You Do? What kind of information technology can Delta Airlines use
to minimize the number of lost bags?
Management Team Decision Students are asked to consider the advantages and
disadvantages of a medical practice switching to electronic
records.
Practice Being a Manager To thrive in the information-rich environment of modern
Additional Assignments Key Points
Management Team Decision Should a cell phone manufacturer release information to the
public about the call drop rates of its equipment?
Chapter 15: Managing Information P a g e | 2
Learning Outcomes
15-1 Explain the strategic importance of information.
The first company to use
15-2 Explain the basics of capturing, processing, and protecting information.
Electronic data capture (bar codes, radio frequency identification [RFID] tags, scanners, and optical
15-3 Describe how companies can access and share information and knowledge.
Executive information systems, intranets, and corporate portals facilitate internal sharing and access to
company information and transactions. Electronic data interchange, Web services, and the Internet allow
Terms
association or affinity patterns
authentication
authorization
bar code
biometrics
corporate portal
electronic scanner
executive information system
(EIS)
expert system
extranets
firewall
protecting information
radio frequency identification
(RFID) tags
raw data
secure sockets layer (SSL)
encryption
Chapter 15: Managing Information P a g e | 3
Lesson Plan for Lecture
Pre-Class Prep for You: Pre-Class Prep for Students:
Review the chapter and determine what points to
cover.
Bring PPT slides.
Read Chapter 15, bring book.
Warm Up Begin Chapter 15 , information
Content
Delivery
Lecture slides: Make note of where you stop so you can pick up at the next class
meeting. Slides have teaching notes on them to help you as you lecture.
Topics PowerPoint Slides Activities
15-1 Strategic
Importance of
15-1a First-Mover
Advantage
15-1b Sustaining a
Competitive Advantage
1: Managing Information
2: What Would You Do?
Transistor Counts
Law
4: First-Mover Advantage
5: Using Information
Technology to Sustain a
Competitive Advantage
law means in
practical terms. How long
can the law continue? Can
computing costs reach near
zero? What are the
implications of lower
computing costs?
15-2 Capturing,
6: Capturing Information
Consider linking out to
Chapter 15: Managing Information P a g e | 4
15-3 Accessing and
Sharing Information and
Knowledge
15-3b External Access and
Sharing
15-3c Sharing Knowledge
and Expertise
10: Internal Access and
Sharing
11: Why Companies Use
Sharing
13: Sharing Knowledge
and Expertise
Segue into this part of the
lecture by asking students
why, when, and with whom
information.
Ask if students have
experience with intranets. If
your university has one and
bring it to their attention
Special
Items
Spark a debate using either of the following statements:
est way for a company to
drop in computing costs reaches an asymptotic end. In other words,
Conclusion
Possible assignments:
Remind students about any upcoming events.
Chapter 15: Managing Information P a g e | 5
Lesson Plan for Group Work
Pre-Class Prep for You: Pre-Class Prep for Students:
Review the material to cover and modify the
lesson plan to meet your needs.
Research and bring in a set of magazine or
newspaper ads that depict the characteristics
and/or costs of useful information.
tie.
Read Chapter 15, bring book.
Warm Up Begin Chapter 15 , information
Content
Delivery
on Moore and why is he
l law means in practical terms.
Segue into Strategic Importance of Information (Section 15-1).
Break for the following activity:
Really
Divide class into groups of 3 4 students and give each group a copy of the quiz you
brought from Webopedia. Alternatively, put the list of question on the board or
Lecture on Capturing, Processing, and Protecting Information (Section 15-2).
Chapter 15: Managing Information P a g e | 6
Break for the following activity:
Divide your class into groups of 3 4 students each and have each group consider the
Lecture on Accessing and Sharing Information and Knowledge (Section 15-3).
Conclude with the following activity:
Divide the class into groups of 2 4 students and give each group a packet of photocopies
of the ads you found relating to information. Alternatively, you can divide your set of
ads evenly between the groups, give each group 3 minutes to review their set, and then
either exchange sets with another group or report back to the class only on the ads they
saw.
Have students review the print ads and determine what aspect of information is
2. If you have finished covering Chapter 15, assign students to review Chapter 15 and
read the next chapter on your syllabus.
Remind students about any upcoming events.
Chapter 15: Managing Information P a g e | 7
Assignments with Teaching Tips and Solutions
What Would You Do Case Assignment
What Really Happened? – Solution
DELTA
In the case, you learned that Delta Airlines was one of the three worst airlines in terms of baggage
handling performance. Furthermore, for airlines in general, 28 percent more bags are delayed today than a
decade ago, and the industry spends $3 billion to $4 billion a year to handle delayed baggage, at a cost of
$90 to $100 per bag. By contrast, it only costs $15 to deliver a bag on time, but Delta now charges a
handling fee of $25 for the first checked bag and $35 for the second, and collects $952 million annually in
use information technology to
address its baggage handling performance, the possibility of self-check-in, and the theft of belongings
With advances in technology, clearly there have to be ways to use information technology to track bags
and sharply decrease the number of delayed bags. If Amazon can send emails and texts notifying
customers when their orders leave the warehouse, arrive at their local airports, and are delivered to their
would have to be made?
Raw data are facts and figures. Raw data do not become information until they are in a form that can
affect decisions and behavior. For information to be useful, it has to be reliable and valid (accurate), of
related to Delta trailing its competitors
in the use of information technology to track and manage baggage handling. Delta needs useful, accurate,
relevant, and timely information to manage bags, and it needs to be willing to incur the costs of acquiring,
-Jackson International Airport, the busiest airport in the U.S. Delta
To address this issue, Delta tore out its existing baggage handling system under Terminal B in the Atlanta
airport, replacing it with an automated baggage system with redesigned conveyor belts and scanners to
Chapter 15: Managing Information P a g e | 8
Furthermore, a central control room uses cameras and 12 video screens to monitor the entire system,
physically loosen bags jamming in the system. In total, Delta invested $100 million to build this new
state-of-the-art baggage-handling system in its main hub, Atlanta, and has made, or is making, similar
changes in its Los Angeles and New York terminals.
And while Delta is now catching up with its competitors in terms of high-tech baggage handling systems,
it has now become a market leader by being the first airline to offer real–
How much of a difference have these new baggage and information technology systems made in terms of
? The latest available data show that Delta has improved considerably. On average in
the industry, 3.59 bags per 1,000 are mishandled. Delta, however, is now well below that, averaging just
2.93 mishandled bags per 1,000, which is fifth best out of 16 airlines, and a 27 percent improvement from
last year, when Delta was mishandling 4.04 out of 1,000 bags.
Could Delta implement self-tagging, whereby passengers put destination tags on their own bags, and
would that help the baggage problem or make it worse?
Getting and sharing information is one of the key parts of managing information. And capturing,
processing, and protecting information are the key steps in getting and sharing information.
There are two basic methods of capturing information: manual and electronic. Manual capture of
information is a slow, costly, labor-intensive, and often inaccurate process, which entails recording and
entering data by hand into a data storage device. Consequently, as we learned above, companies like
Delta are relying more on electronic capture. They use electronic storage devices such as bar codes, radio
Processing information means transforming raw data into meaningful information that can be applied to
-time tracking system, in which each bag is assigned and
tracked via a unique bag code, is an example of turning raw data into meaningful information for
passengers (i.e., Has my bag been loaded on the plane? Is it waiting for me in the baggage carousel?).
Protecting information is the process of ensuring that data are reliably and consistently retrievable in a
Chapter 15: Managing Information P a g e | 9
printed from your home computer or from the check-in kiosk at the airport. As we learned in the chapter,
an increasing number of airlines, including Delta, now send electronic boarding passes containing
passes. The U.S. Transportation Security Administration (TSA) says that paperless boarding passes are
Likewise, if passengers enter or scan their boarding pass information into a special self-tagging kiosk at
the airport that prints out the same bar code tags that airline check-in staff now put on bags, customers
will still have to show their boarding pass and ID to airline staff before dropping their bags. And, the TSA
will still check bags for explosives before bags are loaded onto planes, but neither passengers nor airline
Finally, will the use of self–
mishandles? As mentioned above in regard to check-in time, at first it will probably depend on whether
passengers properly attach bar code tags to their bags. If the bar code is partially hidden, or if passengers
neglect to remove old bar code tags from previous trips, then automated bag handling systems will kick
the bags out for manual handling. Those kinds of mistakes, however, are also made by airline employees.
For example, airlines hire temporary workers during the Thanksgiving and December holiday seasons,
Finally, Delta baggage handlers were caught stealing cameras, laptops, iPods, and jewelry from
ng to use technology to get more bags delivered on time, how can we also
use technology to deter theft among our own employees?
Delta baggage handlers were caught going through passenger luggage in the baggage compartment of an
airplane in Hartford, Connecticut. They took laptops, cameras, jewelry, and other things of value. Similar
Once placed into the baggage system, TSA screeners who check baggage for possible explosives, airline
workers, and employees hired
system
So, what steps can Delta (and the TSA) take to discourage and minimize theft from passenger bags? One
step, already taken by the TSA, is to minimize hand checking of luggage. Increased use of machines to
check for explosive materials and devices accomplishes that, but hand checks will always be required for
the bags that the machines say are suspect. Technology, however, can help at this point. Surveillance
cameras installed throughout the entire baggage sorting and inspecting chain will certainly discourage
Management Team Decision
SWITCHING TO THE IPAD
Purpose
The purpose of this case study is to challenge students to consider the pros and cons of becoming an early
adapter of information technology.
Setting It Up
Ask students, , computer, or TV? What was
Questions
1. Considering the various first-mover and second-mover advantages, would you switch to the iPad or
wait?
Chapter 15: Managing Information P a g e | 11
2. How important is it that the medical records system you select for your practice reflects the industry
standard?
3. Do the benefits of having a computerized medical records system outweigh the costs involved in
setting that system up?
l vary.
Practice Being a Manager
INFORMATION PIPELINE
Exercise Overview and Objective
This exercise requires students to work with a partner to develop an appealing concept for starting a new
business venture, and then to consider how they might cultivate a sustainable competitive advantage.
Managing information effectively is crucial to sustaining competitive advantage in modern markets, and
this exercise gives students an opportunity to explore how they might employ information systems in
support of their concept for a new venture.
Preparation
No student preparation is required for this exercise. One option, however, is to assign students to their
pairs a session or two prior to conducting the exercise, and to encourage the pairs to explore and
brainstorm ideas for new business ventures. Some students may want to interview one or two
entrepreneurs, or to consult some demographic research to search for important patterns or trends.
Whether pairs are assigned in advance or not, it is important that they make smooth progress through
Step 1 (brainstorming and selecting a concept for a new venture). Some students may be inclined to aim
.
Chapter 15: Managing Information P a g e | 12
In-Class Use
You may want to invite a local entrepreneur and/or a CIS faculty member to the debriefing of this
exercise. These experts should play a constructive role as coaches, perhaps roaming around as pairs are
working on their plans and raising questions or making suggestions.
Once all pairs have had adequate time to develop their concept and complete the tasks in Steps 1 and
2, you should move directly to class discussion. The questions that might frame this discussion are
included in Step 3:
What are the major challenges in creating and maintaining a sustainable competitive advantage?
What role does information and information technology play in successfully competing with
other companies in a given market?
Is it possible to secure sensitive information and at the same time share information with
employees and/or other key stakeholders (e.g., suppliers, customers)?
Be sure that any invited experts do no
you invite expert guests you may want to encourage them to work alongside the students by raising
Self-Assessment
COMPUTER COMFORT
Computers are ubiquitous in modern society, but that does not mean that everyone embraces them. As
with any innovation, some people are reluctant to adopt computer technology for whatever reason. The
assessment for this chapter helps students discover how comfortable they really are with evolving
computer technologies.
In-Class Use
Give students 8 10 minutes to complete the inventory. Give students a moment to add their raw score and
then go over what the scores mean (see below under Scoring). Detailed background information on the
Chapter 15: Managing Information P a g e | 13
Scoring
All even-numbered items should be reverse scored. That means, if a student put a 1 in the blank, he or she
should change it to a 5 before tabulating a final score. Scores range from 19 (a low level of computer
anxiety) to 99 (a high level of computer anxiety).
Management Workplace
Management Workplace videos can support several in–class uses. In most cases you can build an entire
50-minute class around them. Alternatively, they can provide a springboard into a group lesson plan. The
Management Workplace video for Chapter 15 would be a nice companion to your introduction to the
course on the first day teaching this chapter.
VIDEO: NUMI ORGANIC TEA
The Value Chain, IT, and E-Business: Sustainable Supply Chain
Summary:
Brian Durkee is the director of operations at Numi Organic Tea. Right before he joined Numi, the
company had just begun to implement an efficient enterprise resource planning (ERP) system with the
Discussion Questions:
1. What kinds of challenges does Numi face in managing information?
Numi faces several challenges in managing information. First, it has the challenge of ensuring that all
of its employees and suppliers are creating quality products using sustainable, fair trade practices.
2. Why was it no longer sufficient for Numi to use programs like Excel and Quickbooks to manage its
information?
Brian indicated that in the early days, Numi operated using Excel and Quickbooks to manage its
information, which is what small business did in those days. Once the company began distributing to
Chapter 15: Managing Information P a g e | 14
3. What are some of the advantages Durkee mentions that have come with using the ERP system?
Numi uses an ERP system to account for and manage inventories in multiple countries. The first
Additional Discussion Questions:
1. How can Numi Organic Tea sustain a competitive advantage by using information technology at its
disposal?
Companies need to address three critical questions in order to sustain a competitive advantage
through information technology. First, does the information technology create value for the firm?
2. Explain how Numi employees can capture, process, and protect information collected from its ERP
system.
Information technologies help companies to capture, process, and protect information. Numi
employees capture information electronically through use of bar codes, radio frequency ID tags, or
Workplace Video Quiz
Students are able to take the following video quiz on CourseMate. The video is broken into segments, and
each segment has related questions to make sure students understand how the clip connects to the chapter
concepts.
Video Segment 1
Video segment title The Value Chain, IT, and E-Business: Sustainable Supply Chain
Start time (in sec) 0:00
Stop time (in sec) 3:07
Quiz Question 1 For Numi, all of the following represents information that is relevant to
sourcing tea from Chinese suppliers except:
Chapter 15: Managing Information P a g e | 15
Quiz Question 2 One reason many companies like Numi meet with their partners to share
knowledge and expertise is because knowledge:
a. Can only be shared face-to-face
b. Is temporary
Video Segment 2
Video segment title The Value Chain, IT, and E-Business: Sustainable Supply Chain
Start time (in sec) 3:08
Stop time (in sec) 7:00
Quiz Question 1 Which of the following systems would allow Numi to communicate its
ordering information efficiently with its partner companies?
a. ECG
Quiz Question 2
e on sustainable practices?
a. Expert system
b. Decision support system
Additional Assignments and Activities
Review Questions
1. What is the difference between data and information? Why is the distinction important?
2. Discuss the strategic importance of information.
is critical for business success.
trategic
3. Identify and describe the characteristics and costs of useful information.
Raw data are facts and figures. Raw data do not become information until they are in a form that can
4. How do companies capture information?
5. Describe ways that managers can process the information they collect.
Processing information means transforming raw data into meaningful information that can be applied
to business decision making. With automated, electronic capture of data, increased processing power,
and cheaper and more plentiful ways to store data, managers no longer worry about getting data.
Chapter 15: Managing Information P a g e | 17
6. How do managers protect their information?
7. How can companies use information technology to improve access to and sharing of information
within the organization?
Executives, managers, and workers inside the company use three kinds of information technology to
access and share information: executive information systems (EIS), intranets, and portals. An EIS
uses internal and external sources of data to provide managers and executives the information they
8. How can companies use information technology to improve access to and sharing of information with
external organizations (e.g., customers, suppliers, etc.)?
A number of information technologies electronic data interchange, extranets, Web services, and the
Internet are making it easier to share company data with external groups like suppliers and
9. What is knowledge and how can it be shared throughout an organization?
Raw data consist of facts and figures, and information consists of useful data that influence
. But neither data nor information is the same as knowledge.
Chapter 15: Managing Information P a g e | 18
A DSS helps managers understand problems and potential solutions by acquiring and analyzing
information with sophisticated models and tools. DSS programs are usually narrow in scope and
Management Team Decision
HOW MUCH SHOULD WE TELL THEM?
Purpose
In this case, students are given an opportunity to think about how a company should share information
with consumers about their products.
Setting It Up
You can introduce the case to students by asking them how they would share bad news about a
an altogether different experience sharing bad news. The question is: how do you share the news, if you
choose to do so at all?
Scenario
As the latest meeting of the management team of your mobile phone company begins, the marketing team
surprising, but the one thing that did stand out is that customers want some more information. They want
how well the phones pick up the signal, how well they hang on to the
signal, how often they drop calls, or whether they are susceptible to certain kinds of problems.
As the marketing team explains, one of the reasons the customers want to know this is because of the
Chapter 15: Managing Information P a g e | 19
Questions
1. What are the advantages and disadvantages of releasing information about the signal reliability of
your phones to the public?
One of the clear advantages is that it gives consumers a level of peace of mind, knowing that your
2. How could you use this information to gain a competitive advantage over other manufacturers
who do not publicize?
By releasing this data, the company makes a very public commitment to the quality of its phones.
Develop Your Career Potential
LEARN TO TALK TECH
Purpose
To encourage students to become computer literate and to help them see the connection between
computer literacy and successful management.
Setting It Up
There are several ways to handle this assignment. One way is to assign it as a journal exercise. Students
consult the Webopedia 1)
they knew the definition before reading it; 2) if they had heard the term previously but did not know the
definition; or 3) if they had never heard of it at all. Instruct students to keep the journal running for a week
or two; during that time,
collected in other areas (articles they read, other classes, conversations with friends, etc.). At the end of
the assignment, have students write a few sentences describing why they think understanding each term
and the technology it defines is important.
Optional Activity
1. If students are completely new to IT, they might be more comfortable reading about it in the context
of their favorite business publication. Walter Mossberg has a regular technology column in the Wall
Street Journal –
called First section of Fortune magazine. Articles in both publications are on the shorter side, so
Additional Activities
Out-of- Divide the class into small groups. Each group should
research a real company (local, national, or global) and provide 10 ways in which the company uses
technology. This project should culminate in a paper and/or presentation given to the entire class.
In- Divide the class into small groups (3 4 students). Ask
each group to list the technology that is currently used in the classroom and how that technology enhances
y that is not currently used in the classroom that
would improve the ability to provide or receive information.
and 4) timeliness. Give examples of each from this website.
The Internet. Will the Internet make traditional travel agencies obsolete? Go to the websites of three
Computer Viruses. Use the Internet to get information about three types of antivirus software
programs. Compare the features and prices of each program. Which of these would you be most likely to
buy? Why? Which do you have now?