388 Part 5: Internal Factors and Design
INFORMATION FOR DECISION MAKING AND CONTROL
Through the application of more sophisticated computer-based systems, managers have tools to improve the performance of departments and the organization as a whole. These applications use information stored in corporate databases to help managers control the organization and make important decisions. Exhibit 11.2 illustrates the various elements of information systems used for decision making and control. Management information systems—including information reporting systems, decision support systems, and executive information systems—facilitate rapid and effective decision making. Elements for control include various manage¬ment control systems, including executive dashboards, and a procedure known as the balanced scorecard. In an organization, these systems are interconnected, as illustrated by the dashed lines in Exhibit 11.2. The systems for decision making and control often share the same basic data, but the data and reports are designed and used for a primary purpose of decision making versus control.
Organizational Decision-Making Systems
A management information system (MIS) is a computer-based system that provides information and support for managerial decision making. The MIS is supported by the organization’s transaction processing systems and by organizational and external databases. The information reporting system, the most common form of MIS, provides mid-level managers with reports that summarize data and support day-to-day decision making. For example, when managers need to make decisions about production scheduling, they can review data on the anticipated num¬ber of orders within the next month, inventory levels, and availability of human resources.
At Harrah’s casinos, an information reporting system keeps track of detailed information on each player and uses quantitative models to predict each customer's potential long-term value. The information helps managers create customized mar¬keting plans, as well as provide customers just the right combination of services and rewards to keep them coming back rather than moving on to another casino. "Almost everything we do in marketing and decision making is influenced by tech¬nology," says Harrah’s CEO Gary Loveman.7
An executive information system (EIS) is a higher-level application that facilitates decision making at the highest levels of management. These systems are typically based on software that can convert large amounts of complex data into pertinent information and provide that information to top managers in a timely fashion. For example, Motorola’s Semiconductor Products Sector, based in Austin, Texas, had massive amounts of stored data, but managers couldn’t find what they needed. The company implemented an EIS using online analytical processing software so that more than a thousand senior executives, as well as managers and project analysts in finance, marketing, sales, and accounting departments around the world, could quickly and easily get information about customer buying trends, manufacturing, and so forth, right from their desktop computers, without having to learn complex and arcane search commands.8
A decision support system (DSS) provides specific benefits to managers at all levels of the organization. These interactive, computer-based systems rely on decision models
