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Tuesday, May 27, 2008

Information System and Services

Basically, a database is carefully designed and constructed repository of facts. The fact repository is part of larger whole known as an information system. An information system provides for data collection, storage, and retrieval. It also facilitates the transformation of data into information and the management of both data and information. Thus, a complete information system is composed of people, hardware, software, the database, application programs, and procedures. System analysis is the process that establishes the need for and the extent of an information system. The process of creating an information system is known as system development.

The performance of an information system depends on a triad of factors: database design and implementation, application design and implementation, and administrative procedures.

The use of Information Technology provides the following benefits to the company:

  • The Computerized system is always up-to-date
  • There is no data duplication and data inconsistency
  • The computerized system always generates useful information. It’s also useful in generating reports
  • The system does allow ad hoc queries
  • Computerized System is very fast to process data
  • The use of computerized inventory system makes data management very easy. It provides greater control and provide the ability to manage the inventories effectively
  • Ready access to crucial inventory management data is available. For example which item have been ordered, from which vendor were they ordered, which item have been ordered but have not yet been received and so on
  • The organization must need to know the available stock and average use of supplies to effectively manage the supply inventory, to determine optimal order quantities, and to place necessary orders, this information has effectively provided by the Computerized Inventory System
  • The company does not always know the actual location of any item at any given time. The computerized system makes it possible to track inventory by category, by location, or by manufacturer
  • The company can not easily generate a repair and maintenance history for each piece of equipment without computerized system
  • The company cannot determine the status of items currently subject to maintenance procedures with the use of computerized systems.

Problems due to lack of Information System Strategy

The development of Information System strategy proceeds on the basis of domino effects obtained from the study of industry and competition. By the revelation of business strengths and weaknesses, for the growth of a wide range of strategic plans for the successful administration of environmental openings and threats is called the Strategy Formulation. It comprises exploratory or redefining the corporate or project mission by indicating attainable goals, emergent strategies, and setting execution procedure for Information Systems. It should be noted that going to Information Technology in the organization could be done in many ways.

At present, although both the companies AB and CD merged together, but still they are running their independent Management Information System. This is not an ideal situation for both the companies and could be responsible for many problems like:

  • Duplication: As both the companies run their Information system independently there is a chance of duplication. The computerized systems of both the companies control the stock of items by location as well as by inventory type. The system also track consumable items by recording their usage (Schreibfeder). Similarly, The systems also generate information about the total orders placed, total cost of orders by vendor, by order, and by inventory type. It also generates a grand total cost, to be used by the company for budgeting purposes. This sounds an appropriate system for a single company, but after the merger of AB and CD companies they both need a more comprehensive system which avoids the chances of data redundancy and duplication
  • Inefficiency: the maintenance of separate database by both the companies even after the merger may enhance inefficiency. It is possible that data of any client may be available into the database of AB company while now it’s CD company which is going to deal with that particular client and hence client may suffer some inefficiency
  • Failure: it is also possible that as database cannot be maintained at any central point, some of it may be lost for any reason, this will cause the failure of the system

The Proposed System

At present both the companies used an overlapping system for Customers and suppliers files. The proposed system is a centralized system in which inventory items will be updated when:

  • An ordered item is received
  • An item is checked out of inventory or checked in inventory
  • A consumable item is withdrawn from inventory in order to be used
  • If the physical inventory check reveals that an item is missing (Bar Codes).

This centralized system provides many benefits to the companies like:

  • Cost Reduction: it saved the cost of the hardware. As both the companies used centralized Information system they only have to use server at one end and dumb terminals to all departments, this will reduce the cost of maintaining data at two different independent ends. It also reduces the labor cost, as now the data is maintained at a centralized position which would almost cut the labor cost to half.
  • Reduced time for searching: when the system is managed with computer at a centralized position, it is much easy to track any item. With the help of computerized system it is possible to record any movement of the items from one place to another place by just entering its primary key
  • Effective Customer Services: It is much easier to provide the best customer services to the customers by adapting centralized Information management system because
    1. The system produces the accurate results
    2. The system produces consistent results
    3. The system produces reliable results
    4. The system is easy to learn
    5. The system is easy to use
    6. The system is flexible to new or exceptional situations
    7. The system is flexible to change
    8. The system is compatible with other systems
    9. The system is well coordinated with other systems
  • Reduction of Wrong Sale or Purchase: the use of centralized information system reduces or rather eliminating the chances of wrong shipping or any wrong sale or purchase
  • Improved Coordination: the centralized information system break down the barriers among departments and across hierarchical levels.
  • Improved Decision-making: information is the lifeblood of organizations. Managers at different levels use different kind of information. Management information system provides information reports to help managers to make decisions.
  • Financial Control: management information system provides the exact situation of the company in the form of different reports and helps managers to control any resource leakages. This ultimately provides a better financial control to the decision-makers of the company
  • Growth: Management Information System would help to enhance the market growth of the company. By having Salespersons use laptop computers in the field, a quick call can confirm inventory availability and instantly close a deal. The speed and timely service, achieved by an efficient management information system, give an advantage over competitors

Implementing Management Information System

Although management information system provides a bundle of benefits to the companies but still it is not very easy to implement such system. In order to implement centralized management information system to the companies AB and CD, following approaches may be used:

  • Negotiations: managers of different departments are interviewed about their information needs. The problem for using this approach is that it is time consuming
  • Involvement: involve different departmental heads by asking the most important information they need to run their department smoothly. This varies from company to company. It only uses the most important information and hence eliminate the useless data
  • Retraining: in order to run the management information system efficiently, it is necessary that users must be trained in a manner that they can use the system as immaculately as they can. For this purpose training is necessary. Training helps the individual learns skills and more knowledge necessary to meet the requirements of the job. For an experienced worker, training is a process of re-orientation to meet the additional job requirements. The purpose of training is to increase productivity and job performance. Thus retrain the employees is an essential part for implementing management information system
  • Recruitment: recruitment of computer personnel to manage, implement and maintain management information system is also very important

Conclusion

We are living in Information age, and in this Information society it is almost impossible to ignore the importance of computers in any walk of life. Computer has not only reshaping our society but also our business environment locally and worldwide. As we have discussed in this report, use of information technology in the AB and CD companies have many benefits, it reduces the cost, enhances the efficiency, provide better customer support and improved decision-making facilities.

Although management information system have many benefits; but it needs a solid strategy to be implemented. The implementation process may include techniques like negotiations, involvement, retraining, recruitment etc.

Decision Making

Decision-making is every manager’s primary responsibility. It is also a process affected by the organization’s needs and characteristics. The manager’s decisions are determined by his personal skills and abilities, and also by the resources and constraints that organizations provide.

Collectively, the decision of manager gives form and directive to the work an organization does.
Viewing decision-making solely as a choice among alternatives is too simplistic, although some minor decisions may be made in this way, complex decisions are not unique, isolated events; they reflect prior behavior and anticipated consequences. Focusing only on the moment of choice among alternatives, according to Simon, leads to a false concept of decision, and “ ignores the whole lengthy, complex process of exploring and analyzing that precedes the final moment”.

The process nature of decision-making reveals the influence of time:

  • The past, in which problems develop, information accumulates, and the need for a decision is perceived
  • The present, in which alternatives are found and the choice is made; andThe future, in which decisions are carried out, evaluated, or changed.
  • The future, in which decisions are carried out, evaluated, or changed.

Moreover major decisions involve a series of related and increasingly detailed decisions as time unfolds and consequences appear.

The fact that decision-making is a process is frequently obscured by the sudden appearance that some decisions seem to make. The forces behind a particular decision are often hidden or unknown. For strategic reasons, managers may reveal decisions only after a great deal of planning. For example, a company president who decides to close a plant in one location and build another in some other location may not announce the decision until after planners have at least partially dealt with the anticipated consequences, such as employee reactions. Critical decisions require months of planning, fact gathering, and analysis. But even in the snap decisions, in which the manager responds to an urgent stimulus, background conditions have influenced the mental processes that are involved. The urgency has merely altered the timings.

The Problem

Let us take a real life example and then find out different alternative solutions for this problem.
It has been observed that after the turnaround led by Lee Iacocca, Chrysler found itself with greater demand for cars in both America and European markets than it could provide. This was a daunting task and requires some serious thinking by the senior executives to find a best way out.

The senior executives follow the basic techniques of decision-making like:

Diagnosis and Analysis of Causes

It is the step in the decision making process in which managers analyze underlying casual factors associated with the decision solution.

In this process manager asks several questions to specify underlying causes, including:

  • What is the state of dis-equilibrium affecting us?
  • When did it occur?
  • Where did it occur?
  • How did it occur?
  • To whom did it occur?
  • What is the urgency of the problem?
  • What is the interconnectedness of events?What results came from which activity?

Such questions help specify what actually happened and why. Executives of Chrysler asked such questions in order to find an alternative of their problem.
Perception and definition of a problem are necessary but not sufficient conditions for effective decisions. Actions can follow only when there is sufficient consensus that a problem exists and should be dealt with. Managers need an understanding of the norms or standards that govern the selection and definition of problems. in some cases, norms are specific.

Development of Alternatives

Once the problem or opportunity has been recognized and analyzed, the executives of Chrysler began to consider taking action. The next stage is to generate possible alternative solutions that would respond to the needs of the situation and correct the underlying causes.
A human being who has the ability to learn, to imagine, to remember, and to organize complexity is highly rational. By rational analysis, managers may choose among alternative decisions according to purpose. Purpose provides a rational standard against which to compare results.
Some decisions can be evaluated by objective criteria; others must be judged by qualitative standards. A dilemma in the evaluation of decisions is whether to measure a decision by its outcomes, or to assess the process by which it is made. Focusing on outcomes is a common practice, it is an easy method, because one can reduce the problem to a single criterion: if I like it, it is good. This allows for considerable subjectivity, especially in the absence of objection or criticisms from others. Evaluation processes differ for various types of decisions and decision situations, and by focusing on processes the manager can take steps to improve the quality of whole classes of decisions.

The first Alternative

The first alternative was to build new plants. But this alternative was not feasible enough because if Chrysler built new plants, it might get stuck with high overhead and excess capacity and thus the whole plan would fail. So this alternative was not a feasible solution of the problem.

Second Alternative

The second solution of the problem was to have employees work nights and weekends in existing plants. This alternative, after further consideration proved a failure because current plant was working full tilt, and hence additional labor hours would not produce many additional cars.

Third Alternative

The third alternative was to rent additional production capacity on a temporary basis. This alternative is the best and presented a creative solution of the problem as it presented the most appropriate solution of the problem.

Implementation of Chosen Alternative

Chrysler executives rented an American Motors plant in Kenosha, Wisconsin, to build Chrysler automobiles. The AMC workers avoided a layoff and Chrysler fulfilled its requirement of greater short-run reduction capacity.

Developing decision alternatives led to a creative idea that helped Chrysler stay efficient and at the same time sell more cars.

The real success of the executives of Chrysler laid in the fact that they had evaluated all three alternatives considerably with proper feedback from the employees and mangers concerned with each alternative. At the same time they did not show hindsight bias, overconfidence, did not influence by the problem framing and did not give too much weight to the readily available information.

Their decision illustrates all the decision steps, and the process ultimately ended in success.

Coca Cola

As we all know that Coca Cola is a multinational company, and have branches in almost every part and country of the world. Although Coca Cola company in other parts of the world works autonomously but all their activities are monitored at it’s headquarter. In this paper we will discuss the following four issues:

  • Financial Statement Analysis
  • Foreign Currency Translation
  • Foreign Price Changes
  • Reporting and Disclosures

All these points play a vital role when it comes to the franchise of any company, without considering these points a company cannot decide to go for globalization.


Financial Statement Analysis

As it is quite simple and straightforward that financial information is very important for any business, especially when it comes to multinational company it becomes obligatory. Financial statements of the company can be used for many purposes but in this report we will discuss and analyze financial statement for the purpose of the global management of the multinational company.

Financial statements should be analyzed by the global management of a multinational company to figure out the position of their business in the market. As we are talking about the company Coca Cola, so we would discuss a case in which we show why the analysis of financial statements is important for the global management of a multinational company.

By analyzing the financial statement thoroughly, the global management have concluded that how their regional management is running their business in any specific region. They have also figured out what necessary measures should be taken to improve the condition of the business in any region. They can get the amount of revenue generated and the net profit derived from it and compares it with the figures of any different region.

Foreign Currency Translation

One of the most important issues in this regard is the translation of currency, because every region has its own currency, which does contain different value. In this matter global management should recognize the value of currency of that specific region and compare it with the value of the currency they are changing in, this is something very important in order to recognize the amount of profit earned. It has been estimated that due to foreign currency translation, Coca Cola, in the fourth quarter of 2003 alone, earned more than $5 billion.

Foreign Price Changes

We have discussed the importance of foreign currency translation in the previous paragraph, now we will discuss importance of foreign price changes. If the foreign price fluctuates with high values, it would affect the business because when comes to the translation of currency it would definitely reflects some big changes. Some definite measure must be taken to resolve the issues related the problem specified in this point.

Reporting and Disclosures

It has been noticed that the quality of financial reporting directly affects the capital markets. Arthur Leviit, Chairman of the SEC says, “Disclosure systems that are founded on high quality standards give investors confidence in the credibility of financial reporting, and without investor confidence, markets cannot thrive”.

Coca Cola Company has mentioned the disclosure in its financial statement that almost 90% of the sales of Coca cola Company comes from the selling of Coca Cola products. Coca Cola is the only supplier of sweetener and concentrate for its products. Thus it is possible that company at any time may not be able to fulfill the requirement of sweetener and concentrate which leads to the shortage of the product. Coca Cola has also mentioned disclosure that it acquires its cans from two suppliers and it is possible that it may face shortage of cans and hence the shortage of the product if no alternative supplier is arranged.

Information Revolution

According to several historians, the Information Revolution is the third revolution in the history of the world after agricultural and industrial revolutions. Information age is the time, which brought fundamental changes in intellectual, social, philosophical and cultural aspects of the world.

Some historians are of the opinion that actually information revolution was the first revolution ever occurred and the agricultural and industrial revolutions were caused due to information revolution. To prove their claim they said that when civilization started, travelers and traders traveled from one place to another, as they have access to many cultures and traditions, they shared information and this information was actually the beginning of civilization as well as led the humanity towards the agricultural and industrial revolutions.

The Information Society can be determined as the large group of people within a country or a region wherein most workers generate or depend upon information for performance of their jobs. Today information is the largest export of most News services, banks, insurance companies, television stations etc. these all organizations collect data, process it into information, distribute it, and store it as a major part of their business.

Although we are living in an information society but it is equally true that only a part of the world has access to all its facilities. For example Internet is the best source of sharing information but there were digital, cultural and content gap between different parts of the world.

Digital Gap

The digital gap is most evident at the phase of connectivity; the lack of affordable access to PCs, Internet devices, modems, telephone lines, and Internet Connections. Steps to reduce this gap include devising cheaper access devices, creating Internet community access centers and bringing down access prices by creating a favorable climate of competition among Internet Service Providers.

It has been estimated that there are more phones in the New York alone than the whole rural area of Africa and almost 80% of the world population has never made a phone call (World Bank 1998). It has also estimated that there are more Internet Connections in London alone than the whole Africa

The developed countries, whose population comprises only 15% of world population, has almost 88% of Internet users (United Nations, 1997)

It has also been estimated that only 1% of the Internet users live in Africa and, if we exclude South Africa then the number of Internet users is less than 100,000 in whole Africa, which is only .02% of the global Internet content (Africa)

Developing countries share of Internet users is less than 5% etc. The reason for such low usage of Information and Communication Technology in developing countries is the cost of Internet. In Africa, the average cost of using Internet for 5 hours only is approximately $50 per month. Most of the developing countries have not enough per capita income to cover the expenses of the usage of Information and Communication Technology and that is the main reason why the growth of Internet users is so slow in developing countries (World Bank, 1998).

Cultural Gap

Culture represents probably the biggest challenge in closing the digital gap. It involves overcoming cultural inhibitions and insecurities about developing competence for surveying the breakneck speed of the Internet age. Closing the Internet gap includes getting governments in developing countries to stop treating their telecom monopolies like cash cow and instead, getting government telecom players to invest in areas like research and development on Internet telephony, so that the technology is seen as a market opportunity on a global scale and not a threat on a local scale. It also includes getting career-track diplomats, bureaucrats, academics and public sector employees to take up Internet training and harness the opportunities as well as the plentiful challenges that accompany Internet diffusion. Closing the cultural gap entails the creation of a risk taking culture, in which accepting some initial failures should not be treated as sign of weakness or a loss of face.

Content Gap

There is a huge content gap between developed and developing countries. According to the International Telecommunication Union, there were more Internet hosts in Finland than in all of Latin America and the Caribbean in 1999, there were more hosts in New York than in all of Africa, and more than 80% of web pages were in English (International Telecommunication Union, 1999).

Advantages and Disadvantages of living in Information Society

Some positive points of living in an Information society are:
· In Information Society, communities are more equipped with the facility to generate employment opportunities and wealth in the global market
· Information society helps to improve the welfare trends of the world
· It has the ability to support the overall condition of cohesiveness and integration of the communities of the world
· Information society encourage the unemployed persons to work for their own
Although living in an Information society has several advantages but it has some disadvantages too:
· There is a huge gap between the people of different areas of the world. Although information society promotes a global world but it also promotes inequality between the people of developed and undeveloped regions
· Information society promotes risk to job security as it is not easy to maintain jobs in competitive market terms
· As information society encourages the unregulated free trade, this leads to the wider gap between the rich and the poor.

Right of Information

Information is the right of every human being. But due to different social, economical and political conditions people of different demographic regions of the world are not enjoying it equally. It has an important point to notice that developed countries have better opportunities for the right of Information than the developing countries.

The concept of right to information is based on the concept of freedom of Information. The freedom of Information and the intellectual freedom are the rights, which protect the human development.

According to the United Nations human Development report, “Human poverty constitutes a denial of fundamental human rights. To promote social progress and raise the standard of living within the wider concept of freedom, international human rights law... recognizes economic and social rights with the aim of attacking poverty and its consequences. Among these rights are an adequate standard of living food, housing, education, health, work, social security and a share in the benefits of social progress” (United Nations, p. 106). These all rights are more important than the right to information. For example if a person do not have food, health, work or shelter he or she do not need the right of information. The United Nations rectification status of major rights tell us that economic, social and cultural rights are ratified by 135 countries while 57 countries have not ratified them.

World War II

World War II has often viewed as the best war ever in which United States played a very positive and effective role. Michael C.C. Adams in his book The Best War Ever: America and World War II revealed that United States had played as negative role in this war as all Axis powers (Germany, Italy and Japan). Adams discusses many myths in this book which were usually propagates to pronounce World War II as the “best war ever”. Adam says, “If the past is remolded too drastically, it ceases to be real history. It becomes what we call myth, or folklore, instead. One task of the historian is to try to keep our knowledge of the past as complete and accurate as possible so that our popular version does not depart too far from reality.

One myth that is usually presented by people is that, minority groups were very well treated in United States during World War II and there was no ethnical or racial problem in United States. This is not true. According to Adams, around 300,000 Mexican-Americans fought for America in World War II but neither government of United States nor American society gave them their due right. They were mistreated and humiliated in the society. White members of GI attacked and mugged Mexican-Americans due to their odd and unusual clothing. These riots were called “zoot suit” riots. “Here’s a guy riding a streetcar and he gets beat up ‘cause he happens to be a Mexican”. Japanese-Americans were also mistreated in United States. Government took away their civil rights and thousands of Japanese were sent to internment camps.

It has been portrayed in media and books that United States played a heroic role in World War II but Adams discloses that United States committed more violence and massacre in this war than any other country. United Sates soldiers used to boil the heads of Japanese and sent these boiled heads “to their families in United States”. Urinating into the mouths of Japanese and killing their wounded prisoners were usual practices. United States soldiers used poor women to fulfill their sexual desire by giving them basic food and household necessities.

On 6th August 1945, Americans dropped an atomic bomb to Hiroshima and one on Nagasaki three days later; after which the Japanese government surrendered. These bombs proved to the final blow for Axis forces and ended the Second World War. These atomic bombs have killed hundreds of thousands of, mostly innocent, people. People who considered World War II as “best war ever” justified the droppings of atomic bombs by saying that it ended the war and saved the lives of thousands of people. But according to Adams, America had no need to drop atomic bombs on Japan, because Japan was fairly disabled by the destruction of their Naval force and industry and the war was near to its end anyway. United States also dropped napalm bombs to different cities of Japan, which have killed “more than half a million people”.

Conclusion

Adam’s book describes that war is blight to our civilization. The horrors of wars, huge toll of human lives, immense loss of property and resources, heinous and inhuman war crimes; and above all the aftermath-miseries, diseases and moral decay can never be justified. Although America’s role in the war portrayed as heroic but in reality United States played as negative role in the war as all the axis forces.
Introduction

Before discussing the effect of globalization, it seems relevant that two terms described first. The first of these terms is Least Developed Countries (LDCs). Those countries, which are described poor, un-industrialized and whose economy based on the export of commodities fall into this category. United Nations had put 24 countries into the category of LDC in its 1968 conference on Trade and development.
Second term is Globalization. Globalization is the process of expanding global preferences in cultural, environmental, political, social and economical issues. The key economic characteristic of globalization is the free movement of goods throughout the world.
Globalization has affected every country but it particularly affected the LDCs in a negative way. It is the name of economic challenges like collapse of commodities market, debt crisis and structural adjustment policies for LDCs, which ultimately tightened the international poverty trap for them.

Direct Effects

Collapse of commodities market was the outcome of poor economic policies of 1980, which ultimately resulted in debt crisis, as LDCs had tried to expand commodity production and economic growth and had borrowed large sums of money. Banks then insisted on readjustment of interest rates on new and existing loans and LDCs agreed. At that moment, globalization compelled them to decline commodity prices. Commodities were the main source of income for LDCs, so it became more and more difficult for them to reduce or pay their debts, which ultimately caused unemployment in many commodity sectors.
In order to repay their debts, LDC tried to adopt IMF’s Structural Adjustment Program (SAP) to obtain funds from IMF. The strategy behind SAP program was to export more than import and produce hard cash to pay for the imports and direct the surplus towards debts. Although SAP was imposed for the betterment of economic condition of LDCs, but it did not work as it was planned. SAP created de-industrialization in LDCs and compelled them to again rely on export of their commodities. Selling of public assets to foreign investors also created unemployment.
Globalization made traders disappears, which in the past, worked as bridge between buyer and seller. Now big companies with shipping and warehousing facilities can buy commodities directly from the farmer. This need more sophisticated technology and human skills, and companies of developed countries have clear advantage in all these respects.
There is a huge digital gap between developed countries and LDCs. It has been estimated that there are more phones in the New York alone than the whole rural area of Africa and almost 80% of the world population has never made a phone call (World Bank). It has also estimated that there are more Internet Connections in London alone than the whole Africa and only 1% of the Internet users live in Africa, if we exclude South Africa then the number of Internet users is less than 100,000 in whole Africa, which is only .02% of the global Internet content (Africa). This digital gap made it almost impossible for LDCs to compete with developed countries and get their even share in present world trade.

Conclusion

Thus, in the light of above discussion, it can easily be concluded that globalization had slumped the economies and trade of Least Developed countries as they have to face the crises like collapse of commodity markets, increased debts and SAP.