Essay on Fortitude: Decision Theory and Information

Submitted By mdsingleton82
Words: 1970
Pages: 8

Debunking Ackoff:
Accounting Information Systems in the Digital Age

A lot has changed in the world since the 1960’s. Almost every aspect of society, from business to entertainment has evolved. Perhaps the one aspect that has evolved faster than any other is technology, and as such, this evolution has allowed technology to permeate many parts of everyday society. It has truly become a digital society. The business world is no exception. Technology has increased business’ ability to obtain information like never before, from real time sales and inventory information to the immediate access to customers that email, chat, and social media can provide. However, while the ability to obtain, process, and distribute information has evolved, much of the information itself has proven timeless, as has the basic requirements from which business driven information systems are developed. In 1976, respected organizational theorist Russell Ackoff penned an article in Management Science in which he attacked the five basic assumptions on which he felt then modern day management information systems were based. While Ackoff did make some valid points, his conclusions were mostly erroneous, especially in today’s society.
The first assumption that Ackoff attacked was the idea that “the critical deficiency under which most managers operate is the lack of relevant information (Ackoff, 1967). While Ackoff concedes that managers do often lack certain information, he argues that the critical problem is not the lack relevant information, but rather that managers are over overburdened with irrelevant information. Management information systems, he argues, need to be redesigned to focus filtering and condensing information (Ackoff, 1967). I agree with this assessment. Technology has allowed for a far greater capacity to store data while network sharing capabilities have allowed managers unprecedented access to information. Modern day information systems, such as Microsoft Dynamics for example, allows managers to access information related to inventory, finances, or virtually any other business function, from their own workstation. With access to this much information at any given time, it is absolutely critical that the system provide users with the ability to filter out irrelevant information to get to the relevant information they need. In the article The Importance of a Good Information Management System, the author points out the importance of managers having timely access to relevant information. “By implementing an enterprise-wide file organization, including indexing and retrieval capability, managers can obtain and assemble pertinent information quickly for current decisions and future business planning purposes. In today's business environment, the manager that has the relevant data first often wins, either by making the decision ahead of the competition, or by making a better, more informed decision”(The Importance, 2010). A good management information system can help ensure that managers and executives have the information they need when they need it.
The second assumption is that managers need the information they want. This seems pretty self-explanatory. Why would a manager want information unless he or she believed it to be relevant to their needs? Ackoff makes the point that, while designing a management information system, designers base their designs off of what managers say they need. This is a problem if the manger in question is not intimately familiar with what he or she manages. In this instance, an incompetent manager will not know specifically what information is required, and will simply ask for “everything.” (Ackoff, 1967). This contributes to the inundation of irrelevant information discussed above. While this is a valid point, one can assume that in most instances, although not all, managers will competent in their fields. That is why they are managers. They should have a good notion of