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There is and continues to be an awareness in society that accurate and timely information is a vital resource of any organization, and that an effective management information system is a means of providing the needed information. In an answer to the question: why do organizations process information? Daft [6] presents two answers. Organizations process information to reduce uncertainty and equivocality. As information increases, uncertainty decreases. In situations where organizations are faced with a high degree of uncertainty, a large number of questions has to be asked and more information needs to be acquired to learn the answers. The assumption underlying this approach is that the organization and its managers work in an environment where questions can be asked and answers obtained. On the other hand, organizations and managers might face situations where they are not certain what questions to ask, and if questions were asked, the situation is ambiguous such that a clear answer will not be found. The existence of ambiguity and multiple conflicting interpretations about an organizational situation is called equivocality. In order to design an information system that helps the organization reduce uncertainty and equivocality, the information needs has to be determined fully and accurately.

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