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Lesson#3
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Organization and Information Requirements
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Organization & Information Requirements
Organizations have various attributes which distinguish them
from each other. No two organizations are
similar in all respects. There have to have certain distinctive
lines keeping them unique from each other.
Information requirements keep varying in accordance with
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Size of organization
•
Its structure
•
The Culture it follows
•
Decision Making
Structures
•
Interested parties both
internal and external
An organization should consider the above mentioned requirements
while devising a system which tailors
for specific information needs.
3.1 Size of the Organization and Information Requirements
3.1.1 Small Organizations
Small organizations usually have simple management structure.
The need invariably grows from the limited
scope and operations of management. Since tasks to be handled
are usually limited and manageable, hence
need for introducing more levels is not required. Since
operations can be managed at the top level by one or
two members of the senior management, officers from the lower
level of management are not usually
involved in decision making. Hence the final decisions are
centrally taken.
Information flows and formats are easy to define and change.
Since information requirements are not
extensive, number of documents prepared and generated will also
be few in number. Mostly the interested
party itself is running the business, hence the management is
centralised to few people.
Examples of Information requirements of Small Organizations
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Day to day transactions
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Daily Sale
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Cash management
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Receivables and Payables
3.1.2 Medium Sized Organizations
Medium Sized organizations are normally a family ownership run
by brothers, father-son. There are many
organizations existing these days which are being run by the
family members. The prime concern may be
the trust already fostered among the blood relations but this
might give rise to informal relationship among
them. Since all critical managerial positions are usually
controlled by the family members, information is
structured only to the extent of external reporting. The level
of reporting that could meet the information
needs of the clients is best suited for such an organization.
Medium sized organizations are run under direct supervision of
the family members which rarely extends to
segregation of duties and delegation of authority.
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Centralized decision
making
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Above mentioned
structure rarely changes with complexity and dynamism of environments.
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Information Requirements of Medium Sized Organizations
As size of the organization increases, the importance of
planning for information also increases. The
planning on long-term basis also helps in monitoring of
information against planning
3.1.3 Large Organizations
Usually such organizations are characterized by large scale of
operations. Various criteria can be used for
this purpose.
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Number of employees
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Amount of turnover
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Number of branches
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Profit size
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Value of assets
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Number of businesses the
organization is working in
With such large size of organizations, management structure
needs to be multi- tiered for efficient and
strong control. This leads to formulation of many departments,
management levels, designations,
promotional opportunities and salary increments.
Example
Public companies
Information Requirements of Large Organizations
With such a large structure, it is inevitable that the detailed
planning should be made for proper
management control, for both short term and long term.
Performance measurement against plans / targets
Nature of the Business and Information Requirements
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Manufacturing Sector
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Service Sector
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Trading Sector
1. Manufacturing Sector
Manufacturing process involves more than one sub-processes,
detailed information is required before
transferring materials for warehousing, manufacturing and sale
to final consumer.
Information Requirements of Manufacturing Sector
Management is concerned with the day to day costs, production
targets, quality of the product, delivery
schedules, etc.
2. Service Sector
Final product is intangible, so information is critical at
various steps, e.g. preparation, delivery and customer
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satisfaction. Quality maintenance is an issue which requires
structured reporting.
Information requirements of Service Sector
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Quality of service
provided.
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Mode of delivery
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Customer Satisfaction
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Time Scheduling
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Resource Management
Trading Sector
Monitoring requires information for each product, e.g.
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Customer profiles
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Customer Comments
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Volume of sales
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Profitability
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Stock movements
Manufacturing/Procurement Cycle
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Market needs
3.2 Nature of Business & Information Requirements
As the size of organization and scale of operations change,
information requirements need to be adjusted
for better monitoring to keeping things in control. |
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