Strategic information management (SIM) is termed as the process of integrating the applicable information so that, business can gain competitive edge in the market. To operate business effectively, the management should determine all the information regarding their target market so that, they can plan according to it and achieve the objectives (Hausmann, Williams and Hardy, 2014).
For conducting the report I have chosen the Tesco PLC which is the renowned supermarket chain in the UK and provides wide range of grocery products and services to their market customers. Working as a manager in the Tesco superstore my role is to measure the information within the organization that will assist in taking strategic decisions. The assignment will mainly concentrate on the identifying the data and information of the organization to take effective decision making
1.1 The features of data and information
Strategic decision making is the effective process that requires processing, storing and reviewing the data and information so that, management of the organization can take proper decision (Lee, Lee and Kang, 2005). Tesco PLC is the largest supermarket chain in the UK market that serves different need of the customers. For supporting the strategic decision making in the Tesco PLC, they need proper information and relevant data. The theory of Russell Ackoff, has suggested that, the content in the individual mind can be classified into the four different categories that is data, information, knowledge and wisdom (Walters, Jiang and Klein, 2003).
Illustration 1: Ansoff model
(Source: Data, Information, Knowledge, and Wisdom, 2004)
Data: The data simply can be termed as the raw or unstructured information that features no information. For example, for formulating the strategies to expand their activities Tesco collects the data from market customers.
Information: Information refers to the structured or organized data which is useful for the management to take effective decisions. For example, Tesco ensure collected data sorted and categorised under different section and answer that who are the customers that will be satisfied by Tesco (Jaspers and et.al., 2004).
Knowledge: It is deterministic process or can say application of data and information that mainly answers the “how” questions. For example, how Tesco will expand their activities the company possess required human inventory with the proper skills and capabilities to enlarge their activities.
Wisdom: The last category includes wisdom this deals in the future as it integrates the vision.
Key features of the data and information are:
Accessibility: The identified features of data and information are accessibility that is it should be conveniently handled and available to the Tesco organization so that, they can take proper decision (Kunnathur and Shi, 2001).
Relevance: Another feature is that, the collected data and information about Tesco should be relevant and related so that, they can take effective decision regarding the specific purpose of expanding their activities.
Comprehensibility: The collected data and information should be understood by the management as it will help the firm in taking effective decision (Hult, Ketchen and Slater, 2004).
Timeliness: Another feature of data and information is that, it should be collected properly. Data or information that arrives after the decision taken by the management is of no use.
Accuracy: Accuracy is very important as the data should be correct and without any error or mistake.
1.2 Criteria to be applied when selecting the data and information to support decision making
For effective decision making, management of Tesco PLC should follow certain criteria for selecting the data and information (Lee and Pai, 2003). The different criteria for selecting data and information consist of decision action cycle that mainly include Plan, do, check and act (PDCA) and Observe orientate decide act (OODA). The decision making process of Tesco PLC includes 8 steps that include
Identify the Problem: The first step in the decision-making process of Tesco PLC include determining problem or to analyze the opportunities which will benefit the company. For example, with the advanced technology, the company should focus on expanding the activities on the internet platform to serve their global customers (Wheelen and Hunger, 2011).
Establish Decision Criteria: The second step includes establishing the decision criteria by gathering the necessary information which are relevant for the organization to take decision.
Weigh Decision Criteria: Another step is to measure the decision criteria that are it is suitable or not for the Tesco.
Generate Alternatives: After weighing decision criteria, the management should create or generate several solutions so that, Tesco should ensure they should design effective online system to serve their customers (Laudon and Laudon, 2004).
Choose the Best Alternative: After measuring all the alternatives Tesco PLC should choose or select the effective alternative that will assist the organization in grasping the opportunities of expanding their business in the internet platform.
Implement: After that management of Tesco PLC should properly implement the chosen alternative for organization so they can improve their performance and attract the large customers (Shapiro and Varian, 2013).
Evaluate the Decision: The last step in the decision making process include evaluating the effectiveness of decision by measuring the number of customers that purchase Tesco PLC products through online services.
The Criteria to be applied when selecting the data and information to support decision making process include ensuring PDCA cycle by the manager of Tesco. PDCA cycle includes:
Illustration 2: PDCA cycle
(Source: Weinstein and Vasovski, 2004)
Plan: The first step is planning that is establishing the goals and objectives to meeting the expected output. Proper plan will help the management in taking proper decision regarding the accomplishment to objectives and goals.
Do: Another step includes implementing the plan so that they can execute according to the plan projects.
Check: After that Tesco manager need to check the actual result with the expected output and determine the deviation in the decision making so that they should rectify them.
Action: The last step of the PDCA cycle include taking action to improve existing performance.
1.3 Evaluate the impact of a management information system to a company
The management information system assists the Tesco PLC in collecting the necessary information or data from inside and outside the working environment (Schultze and Leidner, 2002). Management information system is defined as software that is implemented within the business enterprise that assemble or gather information so that management can effectively operates their business. The main function of Tesco using MIS is to collect data and integrated so that management can access the data in future for their purposes. After that all the assembled data are computerized, stored and measured by the management and it helps to take impressive judgement. It helps Tesco in upgrading their supply chain management across different countries that will support the company in delivering quality and timely services and products. However, it also help the Tesco manager those are working in warehouse to control their level of stock and function of different warehouses.
The advantages of using MIS within the Tesco will help the manager to perform their activities and enable in providing organization proper direction so that they should follow on the proper direction. MIS also assist in integrating the activities of different department for completing the tasks as this software consume the time of department for performing the activities. In Tesco, MIS software combines the past and present data related with the sales figures or total number of human inventory in the supermarket in order to meet the changing requirement of customers.
There are some negative impact of using MIS Tesco should be aware of that it might be too much expensive for the large organization. As, the MIS need to be updated in the regular time interval with the up gradation of technology. Therefore, this will result in increasing the expenses of the company.
However, the positive impact of using MIS also help the Tesco PLC in managing internal activities and operations so that they keeps render quality services to their customers in terms of providing quality product at fair prices.
2.1 The legal responsibilities in sourcing, sharing and storing information
Tesco deals in providing the different grocery items and products to their market customers so there are certain legal responsibilities in sourcing, sharing and storing the information. The company while sourcing or sharing the information mainly focuses on the legal aspects that is confidentiality, authorised access for information, data protection etc. for this Tesco PLC should focus in the act that is
1. Freedom of information act 2000: This act is enforced by the parliament of UK that provide the right to the public to access the information that are held by the national dominance.
2. Data Protection act 1998: This act is being framed by the UK government on processing the data or information of the identifiable living people (Luftman, Bullen and Neumann, 2004). The basis eight principles that need to be followed by Tesco PLC are:
- Information should be used fairly and lawfully
- Data should be used for the specific purposes
- Data or information should be used adequately not excessively
- Information should be accurate
- Unnecessary information or data should not being kept with the organization
- Company should handled the personal information properly
- Company or individual should keep information or data securely or safely
- Company should not transfer the information outside the UK region
Identifying Two Types of Information:
Customers Information: Tesco collect personal information from their customers such as name address, email and date of birth for several different purposes such as clubcard, market survey, online activities ect.
Employee Information: Accordingly to recruitment policy Tesco PLC collect their employees information such as copies of passport, current address, previous work references, valid visa status and employees national insurance number.
2.2 When information should be offered and access allowed
Acquiring information, accessing and processing should be accordant to the act that is Data Protection Act, which gives the precise right to Person and organization to know what information or data need to be handled and which data need to be disclosed to the other parties (Pearlson and Saunders, 2004). The information of the Tesco PLC should be offered and access allowed in terms are below:
Political Opinion: The political opinion should ensure that Tesco PLC should abide by with employers legal duty/ obligation/rights.
Radical or origin: The information regarding the origin of their employees so that they should not being discriminate on the the basis or their origin.
Religious or Other Benefits: The Tesco manager may also offer their employees the information regarding the religious offers so that they should attract more and more customers.
Trade Union Membership: However, Tesco manager should also offer the information regarding the trade union so that they should maintain proper relation within the organization.
Physical or Mental Condition: Tesco manager should also offer the information regarding the physical working location so that they should ensure that their employees should render proper services.
Criminal Offences: The Tesco manager should also offer the information regarding the criminal offences that are unethical in the organization.
All the different types of information offered by the Tesco should accessible in Tesco such as accurate and fairly and lawful way that is through conducting feedback sessions from their employees, surveying in the organization etc.
2.3 The formats in which information can be offered
Tesco PLC collects and stores the information related with the units and costs in the different formats (Piccoli and Ives, 2005). These formats are also effective within the company so that they may make effective decision. The four formats in which the information or data regarding the customers preference can be offered are:
Structured Format: Structure data format is the one that mainly serve the information or data in the sequential manner or proper database structure. It may be in form of tabular formats or presented in the database format. The structured data are effective as the information should be offered properly to the management or other authorities of Tesco PLC so they can take effective decision (Somogyi and Galliers, 2012). Through structured format all the collected information should be separated according to their relevancy and stored in the proper format or database.
1. Maintaining database with proper sales products and customers information to determine that what products are mainly prefer by the customers.
2. Sales figure to ensure that Tesco has sold how much product in the each and every month.
Unstructured Format: The unstructured format are opposite to the structured format. In this format data or information are not presented in the structured or sequential format. These are also termed as the costly form of data because the unstructured format require more time and cost to handle the relevant information needed by the Tesco for supporting their decision making process (Wade and Hulland, 2004).
Self-Organized format: In the electronic format the information offered to the management or customers is with the help of different electronic means like E-mail, database etc. while, the manual format of the information is being provided on the printed paper that is handwritten logs,s reports, letters etc. this format is economical in nature as it require huge cost associated with maintaining and storing the information (Ensour and alinizi, 2014).
Spatial and non-spatial format: The another format of the offering information of Tesco PLC to their management include computer generated document. The application program saves the data or information with the unique data file name. This unique name of the file will assist the authority of the organization in recovering the document.
3.1 Analyses the information to identify trends and patterns
An in-depth analysis of information is necessary to generate valid and reliable outcomes. The wide range of information is available for the organization through its internal and external sources. In order to analyse the available information, the researcher needs to determine adopt appropriate techniques (Alcami and Caranana, 2012). The financial information is extracted for Tesco for last five years.
Table 1: Revenue and profitability of Tesco in last five years
Figure 1: Revenue of Tesco
The graph presented above indicates that revenue of Tesco has increased for year 2012 and 2014. However, the same has been decreased for year 2015 which indicates reduction in market share of businesses. It can be said that competition within retail sector is increasing on continuous basis. This in turn leads to reduction in sales for Tesco in year 2015 (Hausmann, Williams and Hardy, 2014). The business unit should therefore emphasize on creation of strategy that provides an edge over competitors. The increased level of revenue is expected to support business operations for long run.
Figure 2: Operating Profit - Tesco
Figure 3: Net Profit - Tesco
Profitability of the organization corresponds to revenue earned during the years. The graphs presented above indicate that the business unit has incurred losses in year of 2015. It is with decrease in revenue that profits within organization have reduced. It is seen that operating and net profit is moving is same direction. The decreased level of revenue results in incurring losses for the organization (Al-Aboud, 2011).
As per the analysis of financial information, it is seen that Tesco needs to improve quality of products and services. The organization needs to create an edge over competitors so as to increase market share. It is with increasing business revenue that the organization is able to achieve its objectives. The graphical analysis indicates that the revenue should be increased in order to improve business profitability (Lee, Lee and Kang, 2005).
In order to conduct smooth operations within business unit, it is essential to properly disseminate information to related parties. The decision making process within the organization is highly dependent on dissemination of information. Henceforth, availability of information on right time is considered to be highly important in nature. The relevant information should be made available to right people at right time before it loses its significance. It is through proper flow of information between different departments that activities within organization are co-ordinated in a proper manner.
3.3 Sources available to assist in analysing the information
The business unit can accumulate information through different sources as external and internal. The information related to budgeted figures, operational cost, employees turnover and so on can be accumulated through internal sources of information (Dufner, Holley and Reed, 2002). On other hand, external information is accumulated in form of market/ customer information, specialist knowledge and so on.
Market and Customer Information: The management of Tesco can accumulate information related to market and customer base through its external sources. The information helps in evaluating customer base and help the Tesco management in framing strategy in comparison with the competitors’ strategy (Kunnathur and Shi, 2001). Moreover, the information accumulated can be analysed through adoption of quantitative or qualitative tools. For example, with the help of market and customers Tesco can sell the variety of products according to the requirement of their different market customers.
Specialist Knowledge: The specialist knowledge in present scenario is published and available as secondary information. The same is considered to be highly important for decision making process of the Tesco PLC. It is the external source of information that supports decision making process within the organization (Jaspers and et.al. 2004).
Information Related to Business Process: The information related to business processes and operations is available within the organization.
Management Information/ Plan: The information related to decision making and future plans is also available within the business unit. A clear communication of management objectives and future plans provides guidance to employees within the organization (Walters, Jiang and Klein, 2003).
4.1 Evaluate range of decision making tools and techniques available to support a strategic decision
The different range of the decision making tools and techniques that are available to the Tesco PLC to support the strategic decision include:
- SWOT analysis
- Market research
- Cost benefit analysis
The main advantage of using SWOT analysis model is that it will support Tesco in determining their internal strength as well as weaknesses that they possess so that while taking strategic decisions they must strengthen their strength by minimizing their weaknesses. On the other hand disadvantage of using SWOT analysis is that it may not focus on the significant factor among the four different aspect that result in delaying taking strategic decisions (Hult, Ketchen and Slater, 2004). Another advantage of using SWOT analysis is that it will support the firm on determining their core competencies that support in strengthening their performance.
Market Research: The foremost advantage of using market research method is that it support the management of Tesco in gaining up-to-date information regarding the preferences and demand of market customers. Furthermore, another advantage of using market research method is that it support the management in exploring the new market for expanding their business activities and products (Lee and Pai, 2003). Despite of this, disadvantage of conducting market research is that it will be very time consuming process that takes time in collecting the relevant information from market. However, another disadvantage of market research is that it also involve huge cost in surveying the market customers. The main advantage of market research is that it assist the organization in overcoming their problem and issues so that Tesco PLC can take effective decisions for the organization that often result in taking effective strategic decisions for the business. Conducting market research also support in evaluating the information regarding the customers, market information, customers satisfaction etc.
Cost Benefit Analysis: The foremost advantage of using cost benefit analysis is that model is easy to understand. Through using this model of management, Tesco will be able to easily measure the overall costs as well as benefit associated with the project. The main function of CBA is that it enables the calculation of net monetary value and total benefit that are associated with the program of the Tesco. However, the cost benefit analysis also have certain disadvantage that is inaccurate calculation of costs associated with the project that result in misleading the overall outcome.
From the above analysis of three different model that is SWOT, Cost benefit analysis and market research it can be said that all are distinct from each other. As, SWOT analysis focuses on measuring the overall strength, weaknesses, threat and opportunities of the business. While, the cost benefit analysis method focus on measuring the total cost that is associated with new project so that management can take effective strategic decisions. In addition to this, market research focuses on gathering the information from the customers so that management can take effective decisions.
However, from the above different decisions making tools SWOT analysis method will be beneficial for the Tesco organization as it is less time consuming as well as economical method that support the organization in gaining internal and external knowledge (Wheelen and Hunger, 2011). Through SWOT analysis management come to know about the internal strength as well as weakness of the firm. While, it also support in knowing the external opportunity and threat present within the external environment that directly and indirectly affect their operations.
4.2 Methods of evaluating management information within a company
For advanced level of administration information Tesco utilize various information assessment methods to assure the dependable, trusted and superior of management information system (MIS). Writers like Cashmore and Lyall has identified the three levels of business environmental flow of information that is external, internal and corporate level of information.
External Level of Information: The external level of information focuses on the flowing of information outside the Tesco organization among their market customers (Laudon and Laudon, 2004). The external information should focuses on the offering the information to their different stakeholders and the customers so they can serve their requirement effectively.
Internal Information: Another level of management information flow is internal in which the management information flow inside the organization so that senior management can focuses on the effective decision making processes (Shapiro and Varian, 2013).
Corporate Level Information: The last level of business environmental information flow is at the corporate level in which information flow among the corporate sector among the different competitors.
The method of evaluating management information within the company is through Data governance (DG). It refers to the overall administration of the data or information employed in the Tesco PLC. It also ensures that the employed data or information is accurate, usability and also ensure proper security so that it may not be modified or changed by the any third party. (Schultze and Leidner, 2002).
- Free Revisions
- Free Topic Selection
- Free Formatting
- Free Reference Page
5.1 Evaluate methods of developing information capture to inform and support strategic decision making
There are different methods for developing information capture to inform and support the strategic decision making include:
Questionnaire: one of the effective method of processing the information captured include questionnaire. It is the effective methods that is being used by the Tesco PLC to gain the information and data regarding the expectation and the needs of their market customers (Melville, 2010). The advantage of using questionnaire method by Tesco manager is that it assess the necessary information by their customers this gathered information through questionnaire will assist in supporting the strategic decision making process of the Tesco PLC. However, there is also a disadvantage in using the questionnaire method that it lacks the validity of data that has been accumulated. Using questionnaire method for developing the information is costly as well as time consuming method as this method focuses on gathering information from the different market customers. Therefore, sometime it results in gaining incorrect information that result in ensuring very time consuming method.
Environmental Scanning: Another method of capturing the information is through environmental scanning (Luftman, Bullen and Neumann, 2004). Tesco PLC scan the environment to understand the internal and external factors that may be develop to improve the performance of the organization (Pearlson and Saunders, 2004). However, since not every customers are aware of this survey with the help of environmental scanning Tesco manager will develop the information by gathering external information and data so that manager can take effective decision regarding strategies to be implemented in the Tesco PLC firm. Environmental scanning is costly as well as time consuming it focuses on analysing both internal and extrenal environment under which Tesco operates their business.
Performance Test: Another method for capturing the information includes ensuring performance test within the organization so that Tesco manager can take or support the strategic decision making. Advantage of using performance test is that it will support the organization in ensuring that employees and organization have improve their past performance that will assist them in performing the activities properly and satisfying their market customers by providing them quality services and products. However, with the help of performance test Tesco manager get to know about the employees current performance regarding providing services. This method is not so costly nor time consuming as measuring the performance of customers will directly benefit the company in rendering products according to the requirement of their customers.
Surveys: However, through conducting surveys within the organization or by conducting online survey to accumulate the information from the different market customers. So, that Tesco manager can enable the effective decision making process. The advantage of adopting the survey method include that it will result in targeting and accumulating the information from the market customers residing in the different countries. Thus, through survey technique manager will also get adequate information regarding the preferences and requirement of the customers. Disadvantage in using the survey method is that it demand reliability and validity of collected information that has been accumulated from the target customers. However, this method is also expensive in nature as it require huge amount to frame and collect the information form their target customers.
5.1 Processes for analysing impact of information on strategic decisions made
For analysing the impact of information on the strategic decision made, Tesco PLC should focuses in the following steps like:
Setting Objectives of the Process: The decision maker of the Tesco PLC should focuses on developing or setting the objective and also aligns the different resources top accomplishing the objectives and goals of the company (Piccoli and Ives, 2005).
Evaluate the Goals: Another step in the process for analysing impact of the information in strategic decision made include evaluating the goals and objectives. Even the company adopt gap analysis for the assessment that goals have being achieved or not (Somogyi and Galliers, 2012).
Assessing the Reasons for Variance: Another step in the process include measuring the reasons for generating the poor quality result in terms of decreasing the sales and revenue of the Tesco PLC.
Revise and Implement New Approaches: The last step in the process includes revising or implementing the new goals and objectives of the Tesco PLC so that they should assess the correct and accurate information so that company should make strategic decision (Wade and Hulland, 2004).
Another effective process includes accessing the strength and weaknesses of the organization and also their various threats and opportunities. Measuring extraneous threats and opportunities of the Tesco PLC help in the process of strategic decision-making, as it permit the managers to design the things that will help the organization to gain competitive advantage.
From the above report it has been concluded that to operate business effectively, the administration should find out all the information and data regarding their marketplace and competitors so that, they can programme accordant to it and accomplish the goals. The report has also determined the different features of the data and information that is they should be accurate, relevant, timeliness etc. that will assist in taking effective decision