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Database Systems for Management (Third edition)

Organizations capture and process data for a variety of reasons. Accounting data areused to measure the financial health and vitality of the enterprise: It is useful to internal corporate management in keeping track of how the firm is performing; it is useful to people outside the firm, such as investors interested in the firm’s stock and bankers to whom the firm has applied for a loan. Records on a host of other organizational entities, including employees, inventories, customers, and suppliers, are required as well.

One of the main uses of data relates to making decisions. A manager must decide, for example, on the price of the firm’s product or on how many units of the product to produce. An investor must decide whether to invest in a firm; a banker must decide whether to make a loan. The Federal Reserve Board must decide whether to increase ordecrease interest rates, or hold them stable. In all of these cases, it is desirable to have reliable information on which to base the decision. Information, and the data on which it is based, are valuable organizational assets that warrant careful management.

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