Mason, Richard O.

Swanson, E. Burton

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AIS Electronic Library (AISeL)

Association for Information SystemsAIS Electronic Library (AISeL)ICIS 1980 Proceedings International Conference on Information Systems(ICIS)1980MEASUREMENT AS AN MIS FOUNDATIONRichard O. MasonUniversity of Southern CaliforniaE. Burton SwansonUniversity of California, Los AngelesFollow this and additional works at: http://aisel.aisnet.org/icis1980This material is brought to you by the International Conference on Information Systems (ICIS) at AIS Electronic Library (AISeL). It has been acceptedfor inclusion in ICIS 1980 Proceedings by an authorized administrator of AIS Electronic Library (AISeL). For more information, please contactelibrary@aisnet.org.Recommended CitationMason, Richard O. and Swanson, E. Burton, "MEASUREMENT AS AN MIS FOUNDATION" (1980). ICIS 1980 Proceedings. 12.http://aisel.aisnet.org/icis1980/12MEASUREMENT AS AN MIS FOUNDATIONRICHARD 0. MASONSchool of Business AdministrationUniversity of Southern CaliforniaE. BURTON SWANSONGraduate School of ManagementUniversity of California, Los AngelesINTRODUCTIONMeasurement is an essential feature of along the dimension of concern; (iv)every management information system (MIS) objectivity -- the degree to which resultsof which we are aware, though it has been differ according to the "subjective"little studied in this context. The MIS perceptions of the measurer; and (v)data base is typically replete with validity -- the elusive notion of whethermeasures of various kinds, but the the measure measures what it is supposedmeasurement properties of MIS data have as to measure.yet received little attention frompractitioners and theoreticians alike. It Scientific and technicalis our view that th'is inattention is characteristics of measures are anunfortunate. Measurement deserves important aspect of measurement forrecognition as one of the most important of management decision making. For example,MIS foundations. in developing a measure of organizationalproductivity, issues of scale type,While measurement is currently well reliability, sensitivity, objectivity, andrecognized as a component of scientific validity may all be of criticalmethodology, it is less well appreciated significance. However, other issues,for its various roles in management. beyond those of traditional scientific and(Mason and Swanson, 1979) During the last technical concern, are of equalsix years, the authors have collaborated importance, as the sections which followon a study project designed to articulate attempt to indicate.these management aspects from an MISperspective. A progress report on thisundertaking, in the form of a book of DESIGN CHOICESreadings, will soon appear. (Mason andSwanson, in press) In the present paper, Churchman (1967) has identified fourwe content ourselves with a brie f summary design choices which are intrinsic to theof some 04 the most important aspects of measurement process, for both scientificmeasurement as an MIS foundation. and managerial applications. The natureof each of these choices requires thatFOUNDATIONAL ASPECTS trade-offs in cost-effectiveness be made.The first choice, that of language,Seven aspects of measurement are of involves weighing the benefits of languageparticular importance in terms of MIS refinement with the costs offoundation. These are summarized in understandability on the part of the usingFigure 1. Each will be discussed briefly population. An example is the decision toin turn. use multiple measures of the money supplyin the U.S., a refinement in languageSCIENTIFIC AND TECHNICAL CHARACTERISTICS which must bear the social costs ofunderstanding involved. A second choiceThe subject of measurement is usually is that of specification, a decision whichdiscussed in a scientific and technical weighs breadth of application against thecontext. (See, for example, Kerlinger, costs of generalizing the measurement1973). Among the properties of measures process. Here an example would be afrequently mentioned in this context are: decision to use a common measure of(i) scale type -- e.g., nominal, ordinal, productivity for firms in multipleinterval, or ratio; (ii) reliability -- industries. A third design choice is thatoften interpreted as the consistency of of standardization, i.e., theresults in repeated applications ·under a determination of the set of circumstancesstandard set of circumstances; (iii) under which measures are to be generated,sensitivity -- the ability to discriminate or to which measures are to be adjusted.65Figure 1Aspects of Measurement as an MIS Foundation(1) Scientific and technical characteristics scale type, reliability,sensitivity,'objectivity,validity(2) Design choices language, specification,standardization, accuracyand control(3) Information and decision support suggestive, predictive,decisive, systemic(4) Managerial functions Attention-directing, problem-solving, scorecard-keeping(5) Organization focus organizational, individual,societal(6) Information system origin data gathering, data processing,inquiring and deciding(7) Behavioral dimensions measurer, measuree, user ofmeasures66Here, costs of standardization must be Simon, 1958). Attention-directingbalanced against the benefits of provides an answer to the question, "Whatcomparability achieved. The development problems shall I look into?" A commonof accounting standards provides a measurement for this purpose is the costcommonplace example, in this case. accounting variance, for example.Finally, the choice of the appropriate Problem-solving answers the question,level of accuracy and control in "What course of action is better?" Here,measurement must consider a similar trade- a cost-benefit ratio proeides anoff of costs and benefits. The design of illustrative example. Scorecard-keepinga management control system in an is based upon the question, "How well am Iorganizational hierarchy involves such doing?" The periodic reporting of profittrade-offs, for example. and production figures provide classicalexamples of measurement for.this purpose.The design of any MIS requires thatthe four choices identi fied by Churchman Measures in a management informationbe intelligently made. system may support any or all of thefunctions described. An important MIS  design problem is the choice of theINFORMATION AND DECISION SUPPORT appropriate mix of managerial functions tobe supported, and the associated set ofMeasures for management may further be measures which will achieve this end.classified according to four levels ofinformation and decision support.(Churchman, 1968) At the first level, ORGANIZATIONAL FOCUStermed suggestive, minimal assumptions aremade about the user's information needs. Measurements for management decisionAn illustration, in the context of a also have an organizational focus. Threemarketing problem, might be, "Sales last levels of measures are of specialquarter were down 15% over the same importance in this regard: (i) measuresquarter a year ago." At the second level, of organizational attributes, e.g.termed predictive, the measures make a productivity, profitability, marketstatement about the contigent future, leadership; (ii) measures of individualassuming certain choice alternatives for attributes of persons, e.g., aptitude,the decision maker. An illustration here attitude, skill level, job performance;would be, "Sales may be increased next and (iii) measures of societalyear by 25% over this year, by adoption of characteristics, e.g:, population,the new marketing plan." Decisive employment, education, environmentalmeasures constitute the third .Tevel -03 quality. The imperative to measure atsupport, and provide closure to the each of these three levels can be deriveddecision making situation, implying a in terms of the systems theory ofchoice. An illustration, in the context Churchman (1971), as we have argued.of the marketing problem, might be, "The (Mason and Swanson, 1979)internal rate of return on implementationof the new marketing plan, over the next Measurement problems typically differfive years, is expected to be 30%." At in certain ways, at each of the levels ofthe fourth level of support, the systemic focus. At the organizational level, thelevel, the manager's problem situation is search is often for a "bottom line"placed in an enlarged context, which indicator of performance, in terms ofprovides a challenge to "premature" which all organizational activity isclosure. An illustration here might be, ultimately rationalized. Questions of"Marketing is the third most important organizational purpose are fundamentalproblem area for our organization, after here. At the individual level, predictiveresearch and product development, and measurement of role performance is ofproduction quality control." particular interest. Here, psychologicalmeasurement techniques are often of use.One of the most important design At the societal level, the need is toissues for any M.I.S. is the determination provide both information about theof the appropriate level(s) of information organization's environment fEE theand decision support to be provided in the organization, and information aboutmeasurements reported to management. organizations in aggregate for socialdecision making. Here, techniques forgenerating social indicators predominate.MANAGERIAL FUNCTIONSThe typical MIS is focused at one orMeasures may also be classified more of the three levels indicated. Anaccording to the managerial functions important design issue is thesupported by information. These functions determination of the appropriate focus,include attention-directing, problem- and the associated choice of measurementssolving, and scorecard-keeping (March and to implement this focus.67INFORMATION SYSTEM ORIGINMeasures for management decision are,An information system consists of in sum, "for keeps." Their semantics andthree generic functional components: (i) pragmatics are communicated as much by thea data gathering function; (ii) a data choices which are made in their light, asprocessing .function; and (iii) an by their nominal pre-defined meanings.inquiring and deciding function. Behaviors in each of the three indicatedMeasurement may occur as part of each. To roles play an important part in thisillustrate, consider an information system adaptive process. The design 'of any MISwhich supports the admissions office of a must necessarily anticipate theseuniversity. Among the data gathered on an behavioral dimensions.applicant would be measures of scholasticabilities such as those provided by theEducational Testing Service (ETS)· In CONCLUSIONprocessing the data gathered, a predictivemeasure of the applicant's likely Measurement is typically an integralperformance as a student might further be component of an MIS design. In our view,generated. Finally, in deciding upon a theory of management information systemsadmission, the applicants might be ranked. should thus include measurement among itsThus, it is seen that measurement may elements. While measurement is common topermeate each of an information system's today's MIS's, it is our observation thatbasic generic functions. much is crudely done, reflecting a lack ofsophistication with regard to the sevenThe design of any MIS requires that measurement aspects discussed above. Whenthe origin of its measurements be the student of MIS becomes a student ofappropriately distributed across its three measurement as well, there is reason tobasic functions. hope that this deficiency may beremedied.BEHAVIORAL DIMENSIONSREFERENCESIndividual persons are involved inmeasurement for management decision in 1. Churchman, C. and Ratoosh, P. (Eds.)three roles: (i) as measurer; (ii) as Measurement: Definition and Theories,measuree, either directly or indirectly; John Wiley,·(1967), 83-94:(iii) as a user of measures. Behavior ineach role is a crucial aspect of 2. Churchman, C. Suggestive, predictive,measurement for management decision, decisive and systemic measurements. Papershaping and shaped by both the measure and presented at the 2nd Symposium onits interpretqtions. Industrial Safety Performance Measurement,National Safety Council, Chicago,Employee appraisal systems present a December, 1968.straightforward illustration of thebehavioral dimensions. In rating 3. Churchman, C. The Design of Inquiringemployees, the "personal equation" of the Systems, Basic Books, 1971.rater commonly plays an important role,and this is communicated explicitly or 4. Kerlinger, F.N. Foundations ofimplicitly, to the individual rated. The Behavioral Research, Second Edition.individual rated adapts his or her Holt, Rinehart and Winston, 1973.behavior in turn. Users of the ratings, 5. March, J.G. and Simon, H.A.,for example, personnel departments, Organizations, John Wiley, 1958.further communicate additional aspects ofthe measurements by means of their 6. Mason, R.0. and Swanson, E.B.,decisions, and both measurers and Measurement for management decision: Ameasurees again adapt their behaviors perspective. California Managementaccordingly. In some appraisal systems, Review, 21, 3, (Spring 1979) 70-81.for example, it becomes known that an" average" rating will not suffice for an 7. Mason, R.0. and Swanson, E.B., (Eds.)average pay raise, and the rat€ng given is Measurement for Management Decision:thus inflated to the level anticipated to Selected Readings, Addison-Wesley, inbe necessary. press.68

MEASUREMENT AS AN MIS FOUNDATION

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MEASUREMENT AS AN MIS FOUNDATION

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