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INFORMATION DATA versus INFORMATION • Data – collection of facts or numbers that have been not yet been processed into specific information. • Information – data that has been processed into some form that will aid decision making. SOURCES OF INFORMATION 1. PRIMARY • Information that has been gathered by the firm itself. • E.g. Observations, Interviews • Can be very important information to the firm. • ADVANTAGES • DISADVANTAGES • Correct for the • Can be expensive purpose for which it was gathered • People may have lied • Likely to be up-to-date • Difficult and time- consuming to collect • Know the source of the information • May contain researcher bias • Competitors do not have access 2. SECONDARY • Information that has been gathered by someone else but the firm uses it for their own purpose. • E.g. Newspapers, the Internet • This source of information is not as good as primary. • ADVANTAGES • DISADVANTAGES • Less expensive that • May not be totally primary information relevant • Easier to access • May be bias • Can get it from a • May be out of date variety of sources • Available to competitors 3. INTERNAL • This is information that comes from inside the business. • E.g. Employee details, Financial Accounts • ADVANTAGES • DISADVANTAGES • Easy to access • Can be expensive to set up systems • Once systems are in place, information • If it is a new firm they should be accurate may not have a lot of internal information • Can help set targets based on previous • Need to regularly performance update the records 4. EXTERNAL • Information that comes from outside the firm. • E.g. Government Statistics, Competitors Annual Accounts. • ADVANTAGES • DISADVANTAGES • Can be easy to get. • Time consuming to gather. • Often cheap to obtain • May be out of date • Gain useful • Could be unreliable or information about the bias. external environment. (PESTEC) • Available to competitors TYPES OF INFORMATION • This is how the sources of information can be presented. 1. Written – info presented as text. • E.g. Letters, email, memos • Good for confirming verbal info, easy to collect and can be kept to look back on. 2. Oral – communicated by speaking/verbal or sound. • E.g. telephone, presentations, meetings • You get an immediate response, good for discussions but there is no record kept and people may forget. 3. Pictorial – info in the form of pictures/photos. • Can easily be remembered, communicates info fast, used to emphasise a point. • However, can be hard to get a picture that shows what you mean. 4. Graphical – through the use of graphs and charts. • E.g. pie chart, line graph, bar graph • Good for showing numerical data clearly, can be used to make comparisons. 5. Numerical – information in the form of numbers • E.g. tables, spreadsheets • Allows for financial forecasts to be made, perform calculations. 6. Quantitative – info that can be measured. Normally expressed in numbers • E.g. Harry Potter has sold 700 million copies. • Ross High has 980 pupils 7. Qualitative – info based on opinions and judgement. • Tends to be more descriptive, allows the firm to get to know what people think of their product etc. • However, info could be bias. • E.g. Cheese and Onion crisps are great! VALUE OF INFORMATION • See sheet. USES OF INFORMATION 1. Monitor and Control the Business • Info can help to check that the firm is running smoothly. • Help check the progress of the firm and highlight any problems. 2. Assist in Decision-Making • Owners and managers need to make important decisions, therefore need good information. • Poor decision-making can have a negative effect on the firm 3. Measure Performance • Can be used to help evaluate how the firm is performing financially. • E.g. could look at sales targets and see if they are being met. 4. Identify New Business Opportunities • Can use information to see if there are any gaps in the market that the firm can exploit. • This will help the firm continue to meet the needs of their customers.
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