Expert answer:MGT601 evolution of management
Answer & Explanation:Read the journal article, “Executive Information Systems: Their Impact on Executive Decision Making”. Based on the information presented in the article, discuss the following:The tools executive managers use when making major decisions The relationship between the tools the executive managers’ use and the managers’ tasks The reasons for using the support toolsDECISION MAKING IS RECOGNIZED AS ONE OF THE MOST IMPORTANT roles of executives. The availability of reliable information sources is a key component of executive decision making. Sources of information may be oral, written, or computer-based. The computer-based information sources remain the least studied in the context of executive decision making because executives have tended to use other managers and their own intuition as their primary information sources [25]. Recently though, the emergence of computer-based systems that are directly tailored for use by executive decision makers enables an examination of how executive use of computer-based information systems affects executives’ decision-making processes.Such systems, hereafter referred to as executive information systems (EIS), are computer-based information systems designed to allow a senior manager access to information relevant to his or her management activities. The idea of using computer based information systems to support management is not new. In fact, a new philosophy of how computers could be used to support managerial decision making emerged under the name DSS during the late 1970s. Today, DSS have become firmly established in the mainstream of IS practice and applications have become common [12]. While DSS have been found to support upper management [19], this support is indirect since intermediaries frequently are responsible for preparing the analysis requested by executives. In addition, DSS tend to be narrow in scope, focusing on a particular decision. For these reasons, the literature on the impacts of DSS [1, 18] may fail to provide a complete picture of the effect of an EIS on executive decision making.Initial research of EIS has consisted of descriptions of current implementations in organizations [2, 3, 4, 21, 38, 41], and empirical examinations of the important characteristics and purposes of EIS [5,6,50]. Yet research has not extended beyond the descriptive phase to a theoretically based inquiry into the effect such systems can have when used by senior managers. Obtaining responses from multiple users of EIS across many organizations, this research surveys the users of the systems to examine the following research question: what is the effect of EIS use on the decision-making process of executives?2. Executive Infonnation SystemsWHILE EIS DIFFER CONSIDERABLY IN THE NUMBER AND SOPHISTICATION of features, the most common feature of EIS is immediate access to a single database where all current financial and operational data can be found [35]. In many cases, the information made accessible was previously available but was difficult to access or use [42]. Features distinguishing EIS from such systems as management information systems and decision support systems include a non-keyboard interface, status access to the organizational database, drill-down analysis capabilities (the incremental examination of data at different levels of detail), trend analysis capabilities (the examination of data across desired time intervals), exception reporting, extensive graphics, the providing of data from multiple sources, and the highlighting of the information an executiveEXECUTIVE INFORMATION SYSTEMS 141feels is critical. In addition, whereas the traditional focus of MIS has been on the storage and processing of large amounts of information, the focus of EIS is on the retrieval of specific information about the daily operational status of the company’s activities as well as specific information about competitors and the marketplace [16, 48]. EIS are also distinct from DSS: whereas the puipose of EIS is the monitoring and scanning of the environment to give executives rapid exposure to changes in the environment, the purpose of DSS is to support ad hoc decisions as well as some routine analysis. And while the core of DSS is extensive modeling and analysis capabilities, the core of ESS is status information about the organization’s performance [48]. Previous research has examined why EIS are used [50], has examined development methods that lead to successful implementation [10,20,49], and has examined the features executives find most useful [5,41]. Research is now needed that examines the impact of EIS use. There are several frameworks that could be used to study EIS, including EIS as a decision-making or problem-solving tool, EIS as a scanning tool, EIS as an intemal monitoring tool, and EIS as a communication tool [8]. This research chose to examine EIS as a decision-making tool because decision making involves scanning, monitoring, and communicating and is therefore a broad framework for early research into the impacts of EIS use. Given that the postindustrial environment demands that organizations make faster decisions, and have better information acquisition and distribution [23], an information system designed to meet the needs of executives should address their decision-making needs. Furthermore, Rockart and DeLong [41, p. 256] suggest that a decision-making framework for researching EIS should provide new insights into how EIS provide value. There are many decision-making variables that may conceivably be affected by the use of EIS. This study chooses to examine three decision-making process variables that have received considerable attention in recent theory on the impact of advanced information technology use on decision making in organizations and are well grotinded in organizational research [22].3. The Decision-Making ProcessTHE VARIABLES EXAMINED INCLUDE THE SPEED of problem identification, the speed of the decision-making process, and the extent of analysis in decision making.3.1. The Speed of the Decision-Making ProcessRapid decision making has become more important as competitive situations have increased and information has become critical to organizational performance [11,22]. Changes in technology and faster communication makes the time span of important changes critical [13]. The time frame of decision making has hardly been studied [33] although speed is considered panicularly important in highly uncertain, dynamic, or “high-velocity” environments. Eisenhardt [11] found that the most effective firms of those studied made strategic decisions quickly. She identified confidence and anxiety142 DOROTHY E. LEIDNER AND JOYCE J. ELAMas key components determining the speed of the process. El Sawy [13] suggests that “to compete effectively in [today’s] time-compressed infonnation intensive environment, fast response is increasingly becoming a critical strategic capability.” Managers describe their environment as having increased competition and reduced time to make decisions [17]. One executive states: “we as decision makers are constantly being faced with situations where we are required to make more decisions than ever before” with “faster reaction times” [45]. Because information technology allows fast infonnation processing and analysis, the availability and use of EIS by upper executives may contribute to the speed with which they identify problems and make decisions. The speed of problem identification is defined as the length of time between when a problem first arises and when it is first noticed. The speed of decision making is defined as the time between when a decision maker recognizes the need to make some decision to the time when he or she renders judgment [45].3.2. The Extent of AnalysisFredrickson and Mitchell [15] identified six characteristics of strategic decision making: process initiation, role of goals, means/ends relationship, explanation of strategic action, comprehensiveness in decision making, and comprehensiveness in integrating decisions (to form strategy). Analytic comprehensiveness as defined by Fredrickson and Mitchell [15] is the extent of analysis in situation diagnosis, altemative generation, altemative evaluation, and decision integration. This research is interested in the extent of analytic techniques used in decision making. Analysis is defined as the “reflective thought and deliberation given to a problem and the array of proposed responses” [32]. Time spent on interrelating symptoms to get at the root cause of problems and the effort spent to generate solutions are examples of the analytic process [22]. Although sometimes viewed as antithetical to fast decision making, extensive analysis may coexist with speed when an EIS is providing both real-time data and analytic tools. Typical MIS do not provide sufficient inquiry and analysis capabilities compared with their perceived importance to decision makers [31]. However, the information database of an EIS provides a source of raw information that can be used by analytical executives to perform their own analysis [41, p. 102].
week_2_article.pdf
week_2_article.pdf
week_2_article.pdf
article_help.pdf
Unformatted Attachment Preview
Executive Information Systems:
Their Impact on Executive
Decision Making
DOROTHY E. LEIDNER AND JOYCE J. ELAM
DOROTHY E . LECDNER is Assistant Professor
of Information Systems in the Hankamer
School of Business at Baylor University, Waco, Texas. She received a Ph.D. in
infonnation systems in 1992 from the University of Texas at Austin where she also
received a B.A. and M.B.A. Her research interests include executive support systems,
infonnation technology for improving classrooms, and the behavioral impacts of
information technology.
JOYCE J. ELAM is the James L. Knight Eminent Scholar in Management Information
Systems in the Department of Decision Sciences and Information Systems, College
of Business Administration, Florida Intemationai University, Miami, Horida. Before
joining the faculty at Florida Intemationai University in 1990, she was an Assistant
Professor at the University of Pennsylvania’s Wharton School, an Associate Professor
in the College of Business Administration at the University of Texas at Austin, and a
Marvin Bower Fellow at the Harvard Business School. Dr. Elam earned both her Ph.D.
in operations research (1977) and her B.A. in mathematics (1970) from the University
of Texas. Her research deals with the competitive use of information technology, the
management of the infonnation services function, and the use of information technology to support both individual and group decision making. She has served as associate
editor foi MIS Quarterly and is ctirrently on the editorial board for Information Systems
Research and the Journal of Strategic Information Systems.
An executive information system (EIS) is a computer-based information
system designed to provide senior managers access to infonnation relevant to their
management activities. With such trends as globalization and intense competition
increasing the importance of fast and accurate decision making, the use of these
systems by executives may become a particularly important component of their
decision-making behavior. Previous research on EIS has focused on descriptive
studies of how and why EIS are used. This research empirically examines the effects
of EIS use on aspects of the decision-making process by surveying 46 executive users of
EIS. The frequency and duration of EIS use are shown to increase problem identification
speed, decision-making speed, and the extent of analysis in decision making.
ABSTRACT:
decision making, executive information systems, executive suppon systems, problem identification.
KEY WORDS AND PHRASES:
Acknowledgments: An earlier version of this paper was published in the Proceedings of the
Twenty-Sixth Hawaii International Cortference on System Sciences (IEEE Computer Society
Press, 1993).
Journal cfManagenuMInformation Systems/V/mva
1993-94, VoL 10. Na 3, pp. 139-155
Copyright © M.E Shaipe, Inc., 1994
140
DOROTHY E. LEIDNER AND JOYCE J. ELAM
1. Introduction
roles of executives. The availability of reliable information sources is a key component of executive
decision making. Sources of information may be oral, written, or computer-based. The
computer-based information sources remain the least studied in the context of executive decision making because executives have tended to use other managers and their
own intuition as their primary information sources [25]. Recently though, the emergence of computer-based systems that are directly tailored for use by executive
decision makers enables an examination of how executive use of computer-based
information systems affects executives’ decision-making processes.
DECISION MAKING IS RECOGNIZED AS ONE OF THE MOST IMPORTANT
Such systems, hereafter referred to as executive information systems (EIS), are
computer-based information systems designed to allow a senior manager access to
information relevant to his or her management activities. The idea of using computerbased information systems to support management is not new. In fact, a new philosophy of how computers could be used to support managerial decision making emerged
under the name DSS during the late 1970s. Today, DSS have become firmly established in the mainstream of IS practice and applications have become common [12].
While DSS have been found to support upper management [19], this support is indirect
since intermediaries frequently are responsible for preparing the analysis requested
by executives. In addition, DSS tend to be narrow in scope, focusing on a particular
decision. For these reasons, the literature on the impacts of DSS [1, 18] may fail to
provide a complete picture of the effect of an EIS on executive decision making.
Initial research of EIS has consisted of descriptions of current implementations in
organizations [2, 3, 4, 21, 38, 41], and empirical examinations of the important
characteristics and purposes of EIS [5,6,50]. Yet research has not extended beyond
the descriptive phase to a theoretically based inquiry into the effect such systems can
have when used by senior managers. Obtaining responses from multiple users of EIS
across many organizations, this research surveys the users of the systems to examine
the following research question: what is the effect of EIS use on the decision-making
process of executives?
2. Executive Infonnation Systems
WHILE EIS DIFFER CONSIDERABLY IN THE NUMBER AND SOPHISTICATION of features,
the most common feature of EIS is immediate access to a single database where all
current financial and operational data can be found [35]. In many cases, the information made accessible was previously available but was difficult to access or use [42].
Features distinguishing EIS from such systems as management information systems
and decision support systems include a non-keyboard interface, status access to the
organizational database, drill-down analysis capabilities (the incremental examination
of data at different levels of detail), trend analysis capabilities (the examination of data
across desired time intervals), exception reporting, extensive graphics, the providing
of data from multiple sources, and the highlighting of the information an executive
EXECUTIVE INFORMATION SYSTEMS
141
feels is critical. In addition, whereas the traditional focus of MIS has been on the
storage and processing of large amounts of information, the focus of EIS is on the
retrieval of specific information about the daily operational status of the company’s
activities as well as specific information about competitors and the marketplace [16,
48]. EIS are also distinct from DSS: whereas the puipose of EIS is the monitoring and
scanning of the environment to give executives rapid exposure to changes in the
environment, the purpose of DSS is to support ad hoc decisions as well as some routine
analysis. And while the core of DSS is extensive modeling and analysis capabilities,
the core of ESS is status information about the organization’s performance [48].
Previous research has examined why EIS are used [50], has examined development
methods that lead to successful implementation [10,20,49], and has examined the
features executives find most useful [5,41]. Research is now needed that examines
the impact of EIS use.
There are several frameworks that could be used to study EIS, including EIS as a
decision-making or problem-solving tool, EIS as a scanning tool, EIS as an intemal
monitoring tool, and EIS as a communication tool [8]. This research chose to examine
EIS as a decision-making tool because decision making involves scanning, monitoring, and communicating and is therefore a broad framework for early research into
the impacts of EIS use. Given that the postindustrial environment demands that
organizations make faster decisions, and have better information acquisition and
distribution [23], an information system designed to meet the needs of executives
should address their decision-making needs. Furthermore, Rockart and DeLong [41,
p. 256] suggest that a decision-making framework for researching EIS should provide
new insights into how EIS provide value.
There are many decision-making variables that may conceivably be affected by the
use of EIS. This study chooses to examine three decision-making process variables
that have received considerable attention in recent theory on the impact of advanced
information technology use on decision making in organizations and are well
grotinded in organizational research [22].
3. The Decision-Making Process
of problem identification, the speed
of the decision-making process, and the extent of analysis in decision making.
THE VARIABLES EXAMINED INCLUDE THE SPEED
3.1. The Speed of the Decision-Making Process
Rapid decision making has become more important as competitive situations have
increased and information has become critical to organizational performance [11,22].
Changes in technology and faster communication makes the time span of important
changes critical [13]. The time frame of decision making has hardly been studied [33]
although speed is considered panicularly important in highly uncertain, dynamic, or
“high-velocity” environments. Eisenhardt [11] found that the most effective firms of
those studied made strategic decisions quickly. She identified confidence and anxiety
142
DOROTHY E. LEIDNER AND JOYCE J. ELAM
as key components determining the speed of the process. El Sawy [13] suggests that
“to compete effectively in [today’s] time-compressed infonnation intensive environment, fast response is increasingly becoming a critical strategic capability.”
Managers describe their environment as having increased competition and reduced
time to make decisions [17]. One executive states: “we as decision makers are
constantly being faced with situations where we are required to make more decisions
than ever before” with “faster reaction times” [45]. Because information technology
allows fast infonnation processing and analysis, the availability and use of EIS by
upper executives may contribute to the speed with which they identify problems and
make decisions. The speed ofproblem identification is defined as the length of time
between when a problem first arises and when it is first noticed. The speed of decision
making is defined as the time between when a decision maker recognizes the need to
make some decision to the time when he or she renders judgment [45].
3.2. The Extent of Analysis
Fredrickson and Mitchell [15] identified six characteristics of strategic decision
making: process initiation, role of goals, means/ends relationship, explanation of
strategic action, comprehensiveness in decision making, and comprehensiveness in
integrating decisions (to form strategy). Analytic comprehensiveness as defined by
Fredrickson and Mitchell [15] is the extent of analysis in situation diagnosis, altemative generation, altemative evaluation, and decision integration. This research is
interested in the extent of analytic techniques used in decision making. Analysis is
defined as the “reflective thought and deliberation given to a problem and the array
ofproposed responses” [32]. Time spent on interrelating symptoms to get at the root
cause of problems and the effort spent to generate solutions are examples of the
analytic process [22].
Although sometimes viewed as antithetical to fast decision making, extensive
analysis may coexist with speed when an EIS is providing both real-time data and
analytic tools. Typical MIS do not provide sufficient inquiry and analysis capabilities
compared with their perceived importance to decision makers [31]. However, the
information database of an EIS provides a source of raw information that can be used
by analytical executives to perform their own analysis [41, p. 102].
4. Research Model and Hypotheses
in organizations suggests the research model shown in figure 1 conceming EIS use and an
executive’s decision making process.
The model states that the use of EIS by an executive will increase the speed of his
or her problem identification, increase the speed of his or her decision making, and
increase the extent of his or her analysis in decision making. Problem identification is
separated from decision making because many EIS discussed in the literature up to
now have been monitoring systems. If the sole purpose of the system is to improve an
THE PREVIOUS DISCUSSION OF RESEARCH RELATED TO DEQSION MAKING
EXECUTIVE INFORMATION SYSTEMS
EIS Use
^^
143
Decision Making Process
* Speed of Problem Identification
* Speed of Decision Making
* Extent of Analysis
Figure 1. Research Model
executive’s ability to monitor performance, it is probable that he or she may identify
problems faster because of the system, but may not necessarily make a decision
conceming the situation any faster. If, in fact, the EIS affected problem identification
but not the entire decision-niaking process, this would be difficult to discem solely by
a decision-making speed variable.
4.1. Hypotheses
The hypotheses examine the impact of EIS use on certain important characteristics of
an executive’s decision-making process. Consistent with DSS research, EIS use is
defined both in terms of the frequency of system use by the executive and the length
of time the executive has been using the EIS [30]. The hypotheses are worded using
both the frequency of EIS use and the length of time of EIS use. The hypotheses
conceming frequency of use assume that an executive who is actively using the system
somewhat regularly will perceive greater results from his or her usage than an
executive using the system only irregularly. The hypotheses conceming length of time
of use assumes that the longer the system has been in use, the more likely that results
have been observed. This is for two reasons: (1) use would presumably have been
discontinued if it had not been producing a desirable impact, and (2) it may take time
before impacts of system use are realized or noticed; frequency would not reveal such
a time effect
4.2.1. EIS and Problem Identification Speed
Intemal monitoring and environmental scanning are key activities of senior managers
[26]. Such activities provide “early waming indicators” which enable executives to
identify and react faster to problems and to competitive trends and product changes
[44]. One executive is quoted as saying, “what matters is how quickly I can get a
comprehensive overview and draw conclusions from the data. The EIS helps me
do that much faster” [41, p. 106]. By providing external data and by allowing
quicker access to operational information, EIS enables faster scanning [41, p. 82].
And timely access to extemal and internal infonnation may enable problems to be
identified faster. The more frequent the use, the more likely problems will be
identified faster. The longer the system has been in use, the more adept the executive
will be in interpreting the information and determining where problems exist. It is
therefore hypothesized that:
144
DOROTHY E. LETONER AND JOYCE J. ELAM
Hypothesis la: The more frequent the executive’s use of EIS, the faster the speed
ofproblem identification.
Hypothesis lb: The greater the length of the executive’s use of EIS. the faster the
speed ofproblem identification.
A.2.2. EIS and Decision-Making Speed
The need for fast decision making has resulted from increased competition and the
globalization of world markets. Causes of slow speed include the consideration of
many altematives, wide participation [52], political behavior [27], comprehensiveness
[14], and scheduling and feedback delays [33]. Bourgeois and Eisenhardt [7] found
that decision speed affects firm performance in high-velocity environments and is a
key characteristic differentiating the consequences of strategic decisions. Arguing that
the aspects of the decision process following problem or opportunity recognition might
be more effective when using advanced information technology, Huber [22] suggested
that the use of sophisticated information technologies would allow decision makers
or their assistants to analyze information quickly. Hence, the use of such technologies
would lead to more rapid and accurate identification of problems, would reduce the
time required to authorize proposed organizational actions, and would reduce the time
required to make decisions [22].
Eisenhardt [11] found that the most effective firms among the eight studied in the
high-velocity environment made strategic decisions quickly and had a shorter time
frame in which the decisions were made. The decisions were faster because real-time
information was used and multiple altematives were considered simultaneously. An
EIS can provide such real-time information. The provision of real-time, accurate, and
easily accessible information should allow executives to make decisions more quickly.
Those executives who use the EIS the most frequently should notice the greatest
increase in their decision-making speed; likewise, those who have used the system the
longest will be accustomed to quickly assessing their needed information. It is
therefore hypothesized that:
Hypothesis 2a: The more frequent the executive’s use of EIS, the faster the speed
of the decision-making process.
Hypothesis 2b: The greater the length of the executive’s use ofEIS, the faster the
speed of the decision-making process.
4.2.3. EIS and the Extent of Analysis in Decision Making
Fredrickson and Mitchell [15] found that comprehensiveness is positively related
to performance in stable environments but Fredrickson [14] found that it is
negatively related to performance in unstable environments. One explanation of
these results is that unstable environments require fast decision making for effective performance, but fast decision making is hindered by the comprehensive
approach. Others have found that being inordinately analytic leads to slow decision
EXECUTIVE IKFORMATION SYSTEMS
145
making or postponement of the decision until too late [39] and the stifling of creativity
and innovation [34,51].
Eisenhardt [11], however, found that the most effective firms used an analytic
decision process, with the negative effects reduced by other behaviors such as the
reliance on experienced cohorts. Her results suggest that in the unstable environments,
comprehensiveness must involve simultaneous consideration of multiple altematives
and real-time information in order to avoid the slow, inefficient decision process found
by Fredrickson [14]. Bourgeois and Eisenhardt [7] suggest that, as the speed of
environmental change accelerates, effective executives deal with their extremely
uncertain world by stmcturing it through a thorough, analytic process. An executive
interviewed by Rockart and DeLong [41, p. 97] felt that the EIS allowed more time
to be devoted to substantive analysis of operational problems, opportunities and
potential acquisitions.
EIS can aid executives in the analytic process by providing real-time information
and the means of understanding it through analytic capabilities. With its ability to
facilitate analysis of problems with drill-down and trend analysis, an EIS may
significantly increase the extent of a decision maker’s analysis. Those using the EIS
most frequently would be most likely to be doing their own analysis on the system,
and those using the system for the longest time are likely to be comfortable using the
EIS for analysis. It is therefore hypothesized that:
Hypothesis 3a: The morefreqtient the executive’s tise ofEIS, the greater the extent
of analysis in decision making.
Hypothesis 3b: The morefrequent the executive’s use ofEIS, the greater the extent
of analysis in decision making.
5. Methodology
THE STUDY USES A SURVEY INSTRUMENT TO GATHER DATA tO test the relationships
expressed in the hypotheses. The hypotheses will be tested for association rather than
causality. While there is a theoretical argument for causality, it could not be tested
directly using the survey methodology.
5.1. T h e Survey Instrument
In order to collect data on the variables described in …
Purchase answer to see full
attachment
How it works
- Paste your instructions in the instructions box. You can also attach an instructions file
- Select the writer category, deadline, education level and review the instructions
- Make a payment for the order to be assignment to a writer
- Download the paper after the writer uploads it
Will the writer plagiarize my essay?
You will get a plagiarism-free paper and you can get an originality report upon request.
Is this service safe?
All the personal information is confidential and we have 100% safe payment methods. We also guarantee good grades