Introduction to information systems T. Cornford, M. Shaikh is1 060 2013

3.1.5 Synopsis of chapter content
This chapter introduces the concepts of knowledge, information and 
data as linked but each distinct. Data is observation of phenomena; 
information is meaningful to people (users); while knowledge supports 
our accumulated ability to act in the world. The chapter consider why 
information has a cost or price and how it generates value. It considers 
what makes for ‘good’ information and the various forms it may come 
in. The chapter then introduces the concept of a system as a purposive 
ensemble working to some goals. It examines what the implications are of 
describing the way we use data and information, or accumulate and access 
knowledge, in terms of being a system.
3.2 Information and data
Information is a notoriously difficult concept to pin down. It is often 
suggested that we live today in an information age or an information 
society. For business organisations and governments, the use they make of 
information is critical to their success, to controlling their operations and 
achieving their goals. In particular, information is produced and used for 
decision making. Starting from the most basic decisions that a computer 
can happily make on its own – do we have this item in stock and available 
to sell, or a cash machine or ATM – should we issue £50 to this person (in 
response to the right PIN being keyed)?; to the most strategic – should we 
build a new factory in South America and if so where?; information is also 

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Chapter 3: Core concepts: information, data and systems
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traded as a commodity; for example, by business intelligence companies 
such as Reuters or Bloomburg who sell data on companies, stock and 
commodity prices and provide information to their clients around the 
world. 
Our enhanced ability to use information resources (in part a result of the 
invention and refinement of information and communication technologies) 
has had a profound impact on the shape and structure of organisations 
and whole industries, and on how they are managed. For example, the rise 
of so called ‘budget airlines’ across the world is in part about developments 
in aeroplanes and airports, and the increasing desire of people to travel. 
However, key to the emergence of these new airlines has been their ability 
to make the sale of tickets efficient and directly accessible to customers 
via the world wide web. Cutting out the middle man (in this case, travel 
agents) helps to reduce the price and thus raise demand. The budget 
airline pioneers understood that they could manage information resources 
in new and disruptive ways.
Despite information’s key role in all manner of organisations and social 
arrangements, we do not have a single universally accepted theory of 
information that explains the essence of the concept. Hence, we can offer 
no single definition here. Many academic disciplines are concerned with 
studying information, and various theories or accounts for the nature of 
information have been proposed. Linguistics studies the way in which 
meaning (information) is conveyed among people by the use of language. 
In communications engineering, transmission of information is studied – 
for example, the design of a telephone network to carry a certain volume 
of calls. Logicians and philosophers have an interest in information in the 
sense that information is truth or supports justified beliefs. Statisticians 
explore and extract meaning out of quantities of observations of 
events, and they seek to provide insight into the activities they study – 
information. Economists also study information, because individuals make 
economic decisions on the basis of what they know or believe to be true 
– again, information. Economists also talk about ‘information asymmetry’ 
when two parties to a transaction have very different access to information 
– one knowing more, and one knowing less.
We could investigate further the concept of information as it is used in this 
variety of disciplines. But we will not do so here. For the purposes of this 
subject a fairly simple underpinning for the concept can be utilised. Here is 
a candidate definition:
Information is knowledge about the world that is sought by 
people in order to satisfy their psychological needs and on the 
basis of which they can take action or make decisions.
This candidate definition has a number of important themes:
• It suggests that people value information, because they actively
seek it. 
• It suggests that information tells us something about the world – that 
is, it communicates to us some state of affairs.
• It also suggests that people seek information because they will use it. 
This may be a direct satisfaction or a use in making decisions of some 
kind. This decision-making aspect of information is usually stressed in 
consideration of information systems in a business or organisational 
context.
Now contrast this definition of information with that given in Laudon and 
Laudon (2013) and in other textbooks. How similar are they?

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IS1060 Introduction to information systems
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