The Management Theories behind Management Information Systems

 

We can look at IT in terms of all the technology changes we see and the business opportunities they create, and we can look at IT as just another business unit with all the usual management problems of any business unit.  But it is also helpful to sometimes clear the air and discuss what we mean by “management.”  You have already taken at least one management course, and you have your own experiences to consider, but let’s consider some fundamental perspectives on management.  Everyone has their own list of major management theories, but the following three would probably show up on most lists:

 

Frederick Taylor – Principles of Scientific Management, 1911

Current managers defined their job as motivating employees.  Motivation took the form of beatings or firings or pay-per-task.  Results were worker injury, poor quality, and worker resistance.  Managers had little alternative since they really understood very little of the manufacturing process.

 

Taylor advocated learning about the main manufacturing processes and improving them.  Results were time-and-motion studies, process redesign, job simplification.  Manager was responsible for understanding the business and training workers.

 

Current information technology (IT) echoes:  statistical process control, most management reports, enterprise resource planning (ERP) systems.

 

Michael Porter – Competitive Threats, 1980s

Businesses experience threats from five primary sources: existing competitors, new competitors, suppliers, customers, and substitute products.  Managers are responsible for understanding the competition and for meeting it.  His theory has launched departments of “business intelligence,” units whose sole responsibility is maintaining awareness of competitive firms and general innovations.

 

Current information technology (IT) echoes:  web searches, business literature reviews

 

Peter Drucker – Management Challenges for the 21st Century, 1999

Two activities keep businesses successful – innovation and marketing.  It is the job of managers to always find new and better ways of creating products and delivering services.  Your product must be better, cheaper, and delivered faster.  But it must also fill a public need.  Hence marketing is responsible for understanding the features of a product that are essential.  Marketing is NOT selling.  If a market need has been understood well enough, no selling should be necessary.  People should clamor for your product or service.

 

Current information technology (IT) echoes:  business process re-engineering, quality control, market data, survey and statistical analysis, data mining, any other computer system that will reduce the costs of doing business – HRIS, inventory management, computerized bill paying and accounts receivables, etc.

 

 

Summation:

  • If you are a manager for a Taylor company, you need to know what is going on inside your company.  Your prime interests are increased efficiency and cost-cutting.  You may not get out much.
  • If you are a manager for a Porter company, you need to know what is going on outside your company.  You make visits to other companies, attend conferences, read lots of business journals, search the web, and keep your eyes on the horizon.  You benchmark everything and always compete with industry leaders.
  • If you are a manager for a Drucker company, you need to always improve your processes, and you need to understand your customers.  You actually listen to customer complaints, you work focus groups regularly, you know every way your product can be used.  Everything put into your product (or service) has been proven to be important to customers.

 

Organization charts and computer systems will vary depending upon which management model is held by the CEO.

 

Topic Questions

  1. What management theory do you think would best describe the actions of the CEO at Internet Securities?  What problems does that create?
  2. Can you tell what management theory your company uses?  Is it stated explicitly (e.g. “our customers come first,” or “quality is job 1”), or do you have to guess at the primary focus of executives?
  3. If a CIO is responsible for linking IT strategy to the business strategy, how might you see that reflected in the IT budget?  Could the average user tell if IT and management philosophy were aligned?