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VOLUME 11 ISSUE 1

Ubiquitous Learning An International Journal

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Improving Management Education Outcomes

Why Managers Need to Understand Information Technology in Today’s World

ALIREZA EBRAHIMI AND LYNN WALSH

UBIQUITOUS LEARNING: AN INTERNATIONAL JOURNAL http://ubi-learn.com ISSN: 1835-9795 (Print) http://doi.org/10.18848/1835-9795/CGP (Journal)

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Ubiquitous Learning: An International Journal Volume 11, Issue 1, 2018, http://ubi-learn.com © Common Ground Research Networks, Alireza Ebrahimi, Lynn Walsh, All Rights Reserved. Permissions: [email protected] ISSN: 1835-9795 (Print) http://doi.org/10.18848/1835-9795/CGP/v11i01/1-11 (Article)

Improving Management Education Outcomes: Why Managers Need to Understand

Information Technology in Today's World Alireza Ebrahimi,1 State University of New York College at Old Westbury, USA

Lynn Walsh, State University of New York College at Old Westbury, USA

Abstract: Business survival in today’s global economic climate depends on an increased understanding and application of Information Technology (IT). Therefore, managers need to be aware of the past, present, and future challenges associated with IT in the workplace to overcome challenges of modernization. Managers who are competent and possess a working knowledge of IT can further assist a business in gaining a competitive edge. Managers accomplish these outcomes by being actively involved in IT decision-making and remaining abreast of new technology. However, important questions arise such as: What do managers need to know about IT and to what level do they need to know it in order to help their business? Do managers need to be IT literate in programming, web design, spreadsheets, databases, e-commerce, ethics, privacy and security, social networks and information systems, and application issues surrounding the businesses they oversee? These questions remain controversial among managers, business owners/investors, and educators as they all point toward addressing the overarching question: What is the appropriate level of IT training for business managers to be successful? This paper offers insight into what managers need to know about IT, which is based on our experience during three decades of teaching students in higher education. Notably, this paper addresses what managers need to know and is not restricted only to managers in the IT sector, but in all fields. We asked managers to place themselves on a scale we created of four levels of skill. Based on our findings, we concluded that there is an “IT training gap.” We recommend that more IT training at advanced levels be implemented in higher education and at the entry-work level for all aspiring business managers. This will allow entry-level students/managers to maintain employment and increase their ability to sustain technology-related jobs.

Keywords: Managers, Information Technology, Knowledge

Introduction

nformation technology (IT) provides a competitive advantage to managers by increasing productivity and performance and achieving cost leadership in business (Powell and Dent- Nicallef 1977). Accessible, convenient, credible, and user-friendly IT can improve business

processes to outperform competitors, locally and globally (Davenport and Short 1990). Managers are held responsible for compliance with continually changing laws, regulations, and IT issues. It is imperative for managers to stay abreast of changing technologies and the limitations associated with the use of such technologies. For example, the recent trend of using mobile devices dictates that managers need to learn from past mistakes about the vulnerabilities that such technologies present. Therefore, including IT security into an organization becomes essential. A manager who is knowledgeable in IT is better prepared to prevent and mitigate risks to their business (Cavusoglu, Cavusoglu, and Raghunathan 2004). The manager who is capable of assisting in the development of strategic IT planning often provides a distinct advantage for their organization over those who do not (Porter and Millar 1985). In a study of 329 marketing and IT managers at 259 firms, researchers found that a company’s performance could be greatly improved if managers and IT work together (Huang and Wang 2013). At the organization level, the capability of strategically managing information systems has a great influence on firm performance (Mithas, Ramasubu, and Sambarthy 2011). Numerous innovative IT tools are available to assist management in obtaining pertinent information to aid the growth of an organization. Managers

1 Corresponding Author: Alireza Ebrahimi, 223 Store Hill Road, Department of Management, Marketing, and Finance, State University of New York College at Old Westbury, Old Westbury, New York, 11568, USA. email: [email protected]

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must be proactive in embracing contemporary IT topics such as: networks, the web, e-commerce, databases, spreadsheets, programming, security, ethics, privacy, and information system applications.

Organizations are enjoying the benefits of IT while facing the challenges associated with rapidly changing technological complexity. A lack of comprehensive understanding of IT may lead to serious consequences. For example, design flaws in the implementation of the government health care website for the Affordable Health Care Act in many states blocked users from creating an account, using the site, or even completing the application process. This problem made insurers wary of potential business costs and skeptical that the plans would be profitable if there were lower enrollments (Weaver, Ovide, and Radnofsky 2013). Deployment of IT systems may also have consequences that are ethical and political in nature, as with National Security Agency monitoring of communications at home and abroad, with implications for civil liberties, national security and relations with foreign governments (Deibert 2013). In our paper, we provide a brief history of recurring challenges facing IT and the need for managers to understand and plan with other stakeholders. If there is not a better understanding between managers and IT specialists of the complexities and interconnectedness of business strategies and decisions, there will continue to be crises.

To identify the necessity of mastering various IT concepts, we designed an exploratory pilot study to shed light on what managers need to know about IT and assessed whether there was a need for further development of managerial IT knowledge. The current pilot study was conducted by undergraduate students in a course on Information Systems for Managers in a small public university in the Northeast. The study, which surveyed forty managers with experience ranging from one year to more than thirty years in various fields, offers insight into what managers need to know about important topics in information technology and assessed whether there is a need for further development of managerial IT knowledge.

The managers were asked to complete a questionnaire to assess their IT knowledge. The managers were from a variety of organizations, including higher education, accounting firms, aviation, and engineering. The questionnaires were collected and categorized using a system which grouped skill levels together into four categories: basic (level I), intermediate (level II), advanced (level III), and expert (level IV). Our observations and findings from this survey indicate that a majority of managers have limited IT skills. History has shown that this can be a major disadvantage for organizations.

Brief History/Literature Review

History and Information Technology Challenges

Information technology has gone through several challenges including: the invention of the integrated circuit, the Year 2000 (Y2K), viruses, breaches affecting national security, and technical failures complicating the implementation of the Affordable Health Care Act (Mithas, Ramasubbu, and Sambamurthy 2011). The growth of web mobility, e-commerce, and social networking has led to, and continues to produce, new risks to and discontinuity in organizations. Managers must be prepared to understand and embrace the challenges and opportunities that information technology presents.

Chaos and Lessons Not to Repeat: Programming, Y2K

The literature on information technology references software engineering and Y2K as having costly consequences and providing invaluable lessons. The invention of large-scale integrated circuit in the 1960s led to the ability to store large data files, which resulted in overzealous programming and created a computer crisis (Ebrahimi 2005). This experience led to the invention of the software engineering paradigm. A second event occurred in the year of 2000. It

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was a result of a need for the transition from two-digit (99) to four-digit (2000) designation. Perhaps this programming visionary error became a manager oversight error. (Ebrahimi 2005). Trillions of dollars were spent on compliance. It also created needless anxiety globally.

Managers’ Software Heart Attacks

Information technology has become vulnerable to software attacks. Software attacks include viruses, worms, phishing, pharming, and spamming. Viruses will continue to destroy business information. This will result in frustration, huge costs, and loss of data for managers,

Similarly, worms have a destructive and self-replicating behavior, which suffocates the network, causing delays and failures. An example of this was the “Love Bug,” a computer worm that attacked several million computers with the Windows operating system, damaging local computers and overwriting random files (Garside 2000). This worm cost billions of dollars in damages within a matter of days (Ebrahimi 2005). In addition to the financial costs, the worm prompted financial fraud, damaged to reputations, lowered productivity, and cascaded into third party liabilities (Lewis 2002). Cyber-attacks such as the Love Bug worm can also cause loss of intellectual property

Phishing, a method of unauthorized collection of proprietary information, may threaten an organization’s reputation. The pharming of potential website visitors to another counterfeit website is another problem. Spamming, the use of an electronic messaging system, is the sending of unsolicited messages, especially advertising. Spammers are widespread, and the volume of unsolicited spam is very high; for the thirty month period of January 2012 through June 2014, spam email ranged from 87 to 90 percent of email messages (M3AAWG 2014). This high rate of unproductive messaging, which is a disruptive online activity, should be curtailed by all users including academic, government, and industry.

Because these advertisers have no operating cost, spamming is financially viable, and spammers are not accountable (Federal Trade Commission 2004). The cost of spamming is borne by the public and compromises management’s efficiency, lowering productivity (Rao and Reiley 2012). These issues are managers’ concern/responsibility because some or all of a business’s information technology can be deleted without warning (Ebrahimi 2005). Managers need to be aware of these potential software attacks and aim to mitigate risks by the use of proper controls (Ebrahimi 2005).

When airlines experienced a software breakdown due to power outages, it became a crisis for managers in the airline industry; the power outage rendered computers inoperable, and Delta Airlines canceled more than 2000 flights in 2016 (Waldmeir 2016). A similar incident occurred a few days later at Southwest Airlines (Waldmeir 2016). Southwest Airlines is a low-cost carrier with only one type of plane, which allows easy maintenance. These system failures resulted in the cancellation of significant numbers of flights for travelers. Both the economic and personal ramifications were significant and costly. The executive vice president and chief financial officer of Delta Airlines, Paul Jacobson, commented, “It becomes a complete tragedy if we don’t use it [the computer glitch] as a learning experience”. He added, “We like to think of ourselves as an industrial transportation company, but we are every bit as much a technology company as well, and the reliability of the systems has to match that” (Waldmeir 2016).

Errare Humanum Est—To Err is Human

Information technology is prone to error and often viewed as ambiguous or unfriendly to managers and other users. Erroneous and invalid information entered by managers and/or users can go undetected by IT personnel, creating undesirable consequences. Despite resistance to change, people are often forced to adapt to new technological changes. New technology requires managers and users to learn and apply a new way of doing their jobs. A lack of communication between management and users in the implementation and use of IT can cause confusion and

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problems. Changes in IT must involve management and users in the development of new systems. In designing new systems, managers need to identify the necessary business processes and test the processes with the participation of the users. This preventive measure will help avoid disruption and ensure business continuity (Huang and Wang 2013).

Discovering Data and Knowledge Base

A well-constructed IT system enables a business to organize its data to be accessible to managers in ways that improve decision-making. Data is often stored in multiple information systems that serve various operations of an organization. The information stored this way serves some benefit but may not be an optimal solution for providing management with the information needed to assist and improve decision-making. The information stored on different systems and in different databases may contain duplicate or inaccurate data. Information in one database may not be up- to-date or consistent with data stored in another database. Management should understand databases and the type of information stored in these databases. If managers are familiar with database systems and their design, they can identify and resolve database problems (Mayer 2008). Most databases and database management systems, which create databases, have similar foundations and principles, which can be easily learned. It would be beneficial for managers to have knowledge of database management systems, such as Microsoft Access, and be familiar with other databases such as Oracle, IBM DB2 (dBASE II Database file), and Sybase, which dominate the market. Managers can gain important insights using data mining and data warehouses. By exploring, aggregating, and analyzing data collected from these sources, managers can assess their organization’s business processes, trends, and other important information.

Management Life Support Systems

Managers, the administrators who implement policy, strive to achieve the goals of an organization through the efficient use of the organization’s resources, including technology, employees, finances, and materials. Managers can improve efficiency by taking advantage of many tools available in decision support systems, executive information systems, group support systems, and expert systems.

Managers can use decision support systems and executive information systems to capture data from inside and outside the organization and combine current and historical facts, numerical data, and statistics to provide information in the decision-making process. Decision support systems and executive information systems interpret the information and present it in a format that allows managers to make informed decisions. Group support systems can create a virtual group meeting to share information and enable collaboration and analysis, leading to decision- making objectives. In situations involving complex decisions, the higher-level support of an expert system may be more appropriate. Managers should be familiar with the use of expert systems as they are beneficial in situations where consistency is desired and the decision-maker wants to save time in making a decision while maximizing the quality of the decision. Expert systems can help with problem solving by analyzing patterns and trends and making inquiries. This provides valuable information to managers by mimicking human expertise. An example of the use of an expert system would be in the event of a company downsizing. The expertise of retired and terminated employees can be captured and retained by an expert system and distributed to employees or used to train new employees (Gelinas, Dull, and Wheeler 2015).

Manager’s Web and E-Everything

Managers should be proactive by leading their organizations in embracing the use of networks, the web, and e-commerce to avoid lagging behind competitors in their industry (Weber and

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Dahadur 2008). Websites and social marketing are an important means of communicating for an organization. They are replacing many of the traditional ways of conducting business. An e- commerce website should incorporate qualities known as the seven pairs of Cs: content and context, correctness and credibility, currency and continuity, completeness and coverage, consistency and conciseness, community and customization, and compelling and creativity (Ebrahimi et al. 2007). An organization’s web page must be hosted by a reliable, secure, and efficient web host, which is easily accessed and friendly to the user. An interactive web page captures the request from the client, validates the request, stores it in the server, and/or retrieves a response from the server and delivers it to the client. Management should know how to evaluate its organization’s web page and have sufficient knowledge of the web hosting, as well as a basic understanding of Hypertext Markup Language syntax and JavaScript programming.

Ethical Technology, Privacy-Invasive Security Concerns

Managers must ensure that information is safeguarded against misuse and/or theft. It is the responsibility of managers to ensure that the organization abides by existing laws. A culture that values information security should be cultivated by the company management and supported by continual testing, analyzing, refining, and training of all users. Using organization email for personal communications can threaten the integrity of the operation, and managers must strictly enforce rules regarding security of information. According to Ahmad, Bosua, and Scheepers (2014) there is a lack of a systematic and comprehensive management approach to the identification and protection of knowledge assets.

An example of a security breach is the alleged hacking incident by Russian sources during the 2016 presidential elections (Diamond 2016). It is alleged that this breach in security may have influenced the outcome of the election, and the process is currently under investigation. A more recent example of a breach of privacy and security information, which may have grave and yet unidentified consequences for over 140 million Americans, is the hacking of social security numbers, birth dates, and other critical identification information of individuals in the credit report registry of Equifax Incorporated. (Scott 2017).

Encryption of data and/or digital certificates should be used when sending information over the internet (Lineberry 2007). Managers should understand how encryption works and how to view and delete users’ footsteps (cookies). Access to systems, data, and programs should be strictly controlled so that information is not subject to unauthorized use, disclosure, modification, damage, or loss (Mayer 2008). Managers should have a reliable disaster recovery plan in place in the event of a data breach. Disaster recovery plans should include an uninterrupted power supply for power failures or an off-premise data center which is a fully configured replica of the organization’s programs and data.

Managers must be aware of the risks to which their networks and data are exposed by mobile devices using a wireless network. This is because unsecured data could be intercepted from the wireless networks by unauthorized users. The use of laptops and hand held devices pose a threat to privacy and security information because of a lack of secure password protection. Management needs to ensure that all personnel are properly trained to deal with the privacy and security risks that the company is exposed to through their wireless mobile devices. Policies and controls should be put in place to avoid these risks. The use of strong passwords or biometrics to gain access to the organization’s network should be mandatory. Managers need to be aware that the security tools that work on an organization’s network may not be effective in a mobile environment (Weber and Bahadur 2008). The availability of storing/accessing data on fixed or portable devices (external hard drives and/or flash drives) should be password protected and accessible only to authorized, security-cleared personnel. The stored system should have nightly automatic backup capabilities.

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Planning IT and Acquisition

Globalization and use of information technology in every aspect of an organization has resulted in IT becoming one of the most valuable resources to an organization’s success (Carr 2003). Management, to ensure success, should be involved in developing a strategic IT plan aligned with the goals of the organization. Managers who have an understanding of their business processes and technologies aid the organization in achieving their goals. It is possible for them to obtain advice from experts in the field, which is often implemented. The practice is usually to obtain several options from experts with different points of view. This is a costly endeavor and the mangers must decide how to proceed. This requires sufficient knowledge of IT tools, as well as an understanding of the shelf life of IT tools, which very rapidly change and are improved. For example, Apple introduced the smartphone only ten years ago, and the new version[s], iPhone 8 and iPhone X (the tenth anniversary issue) has been introduced and became available in November 2017 (Kelly 2017). It should be noted that each generation has several models (e.g. iPhone 7, iPhone 7 Plus, iPhone S, iPhone 7S Plus) which has resulted in more than twelve versions over the last ten years.

According to McAfee (2006), “Once they [managers] decide what capabilities they need, managers will know what kind of IT to buy and the nature of the initiatives they must manage.” He further stated, “There must be open communication between management and IT personnel about new technology and its uses” (2006). Training staff and testing applications prior to going online will ensure organizational continuity (Osterland 2000). The creation of a secure, attractive, and easily navigated website for an organization is a valuable tool in providing information to existing and potential business clients. A joint effort of management and IT personnel is necessary for this to be accomplished.

Most major organizations continually update IT. The cost of IT for major US corporations is about four percent of their revenues (Sratopoulos 2010). Management has several options in acquiring management support systems or other applications. Examples include “off-the-shelf,” leasing, or developing in-house software. Managers should know the advantages and disadvantages of each option. An “off-the-shelf” application program may prove to be inexpensive but is usually developed for a wide audience and therefore is not tailored to meet an organization’s specific needs. Leasing may be even less costly in the short term, but since the lease must be renewed it may not be the ideal solution. Internally developed software programs cost substantially more than those obtained from a software vendor but can be tailored to the needs of the organization. Acquiring new information technology, therefore, should involve intensive planning and assessment of the organization’s needs to ensure that the benefits derived from the system exceeds the costs of developing, installing, and maintaining the system (Rainer and Prince 2017).

Research and Development: Managing the Unmanageable

It is important for managers to be aware of how funds are spent in research and development. As Radjou and Wolff (2006) point out, research and development help businesses anticipate and respond to changes such as competitive threats or new business opportunities, which in turn, create innovations. Managers should ensure that their research and development goals are aligned with their organization’s strategic plan. A recent report has indicated that there is a correlation between organizational learning, innovation, and company performance (Therin 2010). For example, Apple’s total research and development expense for 2016 was a record ten billion dollars, up nearly thirty percent from 2015. This was significantly more than three billion dollars per year it spent on research and development just four years ago (Cybart). This is over 11.6 million dollars per day. Thus, the appropriate knowledge of the current and updated IT tools and its judicial use are, in part, responsible for Apple’s continued increase in sales and stock value.

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Research Design

Empirical Study of Managers’ IT Knowledge

The current review and exploratory pilot study investigates the level of familiarity with information technology that managers in various fields possess. The authors hypothesize that managers have limited knowledge of IT. This study was conducted by undergraduate students in a college course, Information Systems for Managers, in a small public university in the Northeast. Forty managers with experience ranging from one year to over thirty years were asked to complete a questionnaire (see Figure 1 in Appendix) to assess their level of IT knowledge. Seven managers were in higher education institutions, seven in public accounting, seven in the aviation industry, six in engineering, five in business administration, two in healthcare administration, and six in other fields.

The authors developed the instrument used in this exploratory pilot study over the past ten years. Refinements were made as successive drafts were administered by students as part of their course requirement. Admittedly, it has not been validated by other investigators. The skill levels were designed to reflect different levels of sophistication in the IT knowledge relevant to management. Four levels of skills ranging from basic, intermediate, advanced, and expert were assigned. Level I (basic) consisted of competence with email, the internet, word processing, and editing documents. Level II (intermediate) consisted of knowledge of spreadsheets (Microsoft Excel) and databases (Microsoft Access). Level III (advanced) consisted of website design and programming, network applications, enterprise resource management, and other management support systems. Level IV (expert) consisted of expert systems and knowledge of the laws and regulations concerning privacy and security surrounding IT.

After collecting the data, each manager was assigned one of the four skill levels (Table 1). The results of the study indicate that all managers (100%) possess a level I knowledge of email, the internet, and knowledge of a word processing manipulation. Seventy-five percent possessed a level II knowledge of information technology, which includes those technologies in level I, with the additional knowledge of spreadsheet and database programs such as Microsoft Excel and Microsoft Access. Seventeen percent of the managers had a level III knowledge of information technology including web design and programming and managerial support systems. Only seven percent of managers had a level IV knowledge of expert systems and laws and regulations concerning privacy and security (Table 1).

Table 1: Summary of Results in Empirical Study of Managers Level I Level II Level III Level IV

Number of Managers in Survey 40 30 7 3 Percent by Category Level 100.0% 75.0% 17.5% 7.5%

Our analysis reveals that a quarter of the managers studied (25%) did not meet a level II knowledge of IT. Only 17.5 percent had knowledge at level III, and only 7.5 percent had knowledge at level IV. (See Figure 2 in Appendix.) These findings are consistent with the authors’ hypothesis that managers have limited IT knowledge.

Limitations of the Study

There are several limitations to our exploratory pilot study. The number of managers who completed the questioners was rather small (N=forty). The authors developed the questions and independent investigators have not validated them. We had no method of adjudicating whether the managers completed the survey accurately and without bias. Nevertheless, this pilot study strongly suggests that managerial knowledge of IT is limited.

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Conclusion

It is important that managers stay informed with current technological advances to ensure their organization remains competitive and successful, as with Apple. Whether the organization is small or large, the company’s information systems should be designed to improve the effectiveness and efficiency of the organization. Managers who are knowledgeable at all the levels described in this paper, understanding IT concepts and tools such as programming issues, webpage view source, databases, spreadsheets, ethics, and privacy and security, are prepared to prevent and mitigate potential risks. Managers’ IT knowledge of available information systems outside or within the organization aids in decision-making. Managers and organizations need to be proactive in obtaining the necessary IT knowledge and skills to ensure that the organizations they manage will achieve its strategic goals. The results of this survey confirm that most managers have only limited IT knowledge.

The authors encourage institutions of higher education and organizations to provide training to ensure that there is understanding and proficiency in the skills of their students and managerial staff. This constant training of managers can be done through workshops and seminars. We believe that many problems can be eliminated if managers and IT specialists communicate with a common understanding of their needs and capabilities to achieve organizational objectives and are encouraged to be strategic thinkers. Future studies should be done with more data to further investigate the IT skill levels of managers.

Acknowledgement

We thank the students who administered the questionnaire to the managers and the managers who completed the questionnaires. We also thank our colleagues for proof reading the paper and providing advice.

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APPENDIX

Research of Management’s Knowledge of Information Technology

We are conducting a survey to assess the level of which managers have a working knowledge of information technology. We would appreciate it if you would take the time to indicate your knowledge of the following programs or activities, by writing to the left of the item – “V” if you are very familiar, “F” for familiar, “S” if you have some, but little knowledge, and “N” if you have no knowledge. Please be honest with your answers and feel free to make comments next to any of the items. Thank you very much for helping.

Job Title: ______________________ Years of management experience: _____________

____ Use of e-mail

____ Internet use

____ Microsoft Word or similar word processing program

____ Microsoft Excel or similar spreadsheet program

____ Microsoft Access or other database program

____ Website design and Programming

____ Network applications

____ Enterprise Resource Management

____ Expert system

____ Management Support Systems, such as Decision Support system

____ Laws and regulations concerning privacy and security of data

____ Other (please indicate) ______________________________________

Figure 1: Questionnaire provided to the managers

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EBRAHIMI AND WALSH: IMPROVING MANAGEMENT EDUCATION OUTCOMES

Figure 2: IT knowledge levels of managers. Failed = no knowledge of the designated category level. Passed = complete knowledge of the designated category level

ABOUT THE AUTHORS

Alireza Ebrahimi: Associate Professor, Department of Management, Marketing, and Finance, State University of New York College at Old Westbury, Old Westbury, New York, USA

Lynn Walsh: Associate Professor, Department of Management, Marketing, and Finance, State University of New York College at Old Westbury, Old Westbury, New York, USA

LEVEL I LEVEL II LEVEL III LEVEL IV

Failed

Passed

D is

tr ib

u ti

o n

P e

rc e

n ta

g e

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ISSN 1835-9795

Ubiquitous Learning: An International Journal sets out to de�ne an emerging �eld. Ubiquitous learning is a new educational paradigm made possible in part by the affordances of digital media.

Ubiquitous learning is a counterpart to the concept “ubiquitous computing,” but one which seeks to put the needs and dynamics of learning ahead of the technologies that may support learning. The arrival of new technologies does not mean that learning has to change. Learning should only change for learning’s sake. The key perspective of the journal is that our changing learning needs can be served by ubiquitous computing. In this spirit, the journal investigates the affordances for learning in the digital media, in school, and throughout everyday life.

Ubiquitous Learning: An International Journal is a peer-reviewed, scholarly journal.