In the past twenty-five years, the â€˜information explosionâ€™ has increased the need for managers to seek an optimum system for making use of this subtle and intangible power. Furthermore, with this explosion came the necessity for distinguishing between data and messages that were relevant to the managersâ€™ functions from those which would merely cause frustrations and confusion.
In the early stages of the development of computer hardware in the 1950s, the technology improved so rapidly that management had difficulty in appreciating the capabilities of the computer. However, simultaneously, information theory then referred to as cybernetics, defined the components rigorously; operation research and management science developed mathematical and statistical models that offer a conceptual framework for handling information to meet explicit objectives of managers. The practitioners of management put the available computer hardware to work using languages. Thus, in the 1950s new jargon entered the English language as well as other languages. Automation with its emphasis on electronic feed back was viewed as the basis for the â€˜second industrial revolutionâ€™. Electronic data processing, with its emphasis on entry, processing and output of data quickly enabled managers to handle such routine activities as processing payrolls and accounts receivables.
Data processing has provided voluminous printouts of internal data, such as accounting and financial data, production schedules, inventories of raw materials, work in process and finished goods sales, by territory, products and customers; and external, environmental data, such as marketing data of consumer demand census of population, economic forecasts, population shifts, and reports of social condition. With this explosion of data came the realization that mangers might not need more data but what they did need was relevant timely data.
Information theory provided the needed breakthrough by pointing out that data and information are not synonymous. Data are facts, statistics, opinions, or predictions classified on some basis for storage, processing, and retrieval. These data may be printed out as messages, but all data or messages may not be relevant to managers in the performance of their functions. Information, on the other hand, is data that are relevant to the needs of managers in performing their functions. A computer can store technically vast amounts of data â€“ more than managers can comprehend or use. The semantic aspect provides meaning to the data so that managers can concentrate on the portion that will make them more effective. Messages that shed no new light on subjects of interest to the manager may be printed and transmitted. Some messages contain so much interference (â€œnoiseâ€) that they jam the reception of pertinent information. In short, managers may be hindered by excess data and frustrated by meaningless messages, much as consumers are frustrated by junk mail. The more probable a message is, the less information it gives. Early uses of computers in data processing were primarily in handling large masses of routine activities but they did not enable managers to distinguish relevant information from volumes of data with little meaning or of little interest to the receiver.
Computer technology has developed greater speeds, storage capacity, and improved methods of printing outputs so that managers are often inundated with data. But they needed better information, not more data. Furthermore, managers often installed computers merely because others were purchasing or renting computers and because it was the â€œin thingâ€ to do. In short they obtained equipment before they determined their needs.
This realistic discussion of the evolution of information system demonstrates the result of the rapid improvements in technology ahead and of the ability of human beings to make efficient and effective use of the improvements It also serves to caution prospective managers that the expected technological improvements in the next decade might result in a repetition of past mistakes.
With a clear understanding of their needs for information, managers can then design for handling information specifically to aid them in performing their managerial functions. In summary, in order for managers to manage information they (1) must identify their specific and explicit needs, (2) design a system that will satisfy these needs, and (3) only then select the computer hardware to efficiently implement the system.