Chapter 1: INTRODUCTION TO MANAGEMENT INFORMATION SYSTEMS

Topics covered: MIS Concepts Definition of MIS Role of MIS Impact of MIS & the user Management as a control system Support to the management Management Effectiveness & MIS Organization as a system Organization effectiveness Management Information System (MIS): Concept
The elementary convictions of MIS were to process data from the organization and present it in the form of reports at regular intervals. This conviction was altered when a distinction was fabricated between data and information. Information is an outcome of processed data, data being a set of values. This conviction was further altered, thats the system should present the information in such a form and format that is creates an impact on its user, provoking decision, an action and an investigation. It was later realized that some sort of selective approach was necessary for analyzing and reporting, hence the concept of exception reporting was imbibed in MIS. Also, the need arose, for keeping all data together so that it can be accessed by anybody and can be processed according to their needs in different ways. This gave rise to the concept of DATABASE, which proved to be much effectual. Over a span of time, the concept of end-user computing using multiple databases emerged, which unveiled a fundamental transition in MIS. This transition was the decentralization of the system. When this became actuality, the notion of MIS changed to decision-making system. The foundation of MIS is the principle of management and its practices. MIS uses the concept of management control in its design and relies heavily on the fact that the decision-maker or manager is a human processor of information. It relies on the system theory that offers

solutions to handle complex situations of the input and put flows using theories of communication.

INFORMATION SYSTEMS BUSINESS GOALS AND MISSION APPLICATION OF PURE AND SOCIAL SCIENCES APPLICATION OF PRINCIPLES AND PRACTICES OF MANAGEMENT USE OF DATABASE AND KNOWLEDGE BASE COMPUTERS AND INFORMATION TECNOLOGY FIG: CONCEPTUAL VIEW OF AN MIS

EIS BUSINESS INFORMATION SYSYEMS MISSION CRITCAL APPLICATIONS FUNCTIONAL INFORMATION SUBSYSTEMS DATABASES AND KNOWLEDGE BASE DATA PROCESSING AND ANALYSIS SYSTEMS OLTP, DATA AND VALIDATION SYSTEMS

FIG: PHYSICAL VIEW OF AN MIS

Therefore, MIS is an art and science of gathering, collecting, storing, analyzing and disseminating information for managerial decision making with due regard to the people of the organization.

MIS: Definition
MIS is prevalently demystified as the Information System, the Information and Decision System, the Computer-based Information System. The MIS has more than one definition, some of which are given below: The MIS is defined as the system that provides information support for decision making in the organization. The MIS is defined as an integrated system of man and machine for providing the information to support the operations, the management and the decision making function in the organization. The MIS is defines as the system based on the data base of the organization evolved for the purpose of providing information to the people in the organization. The MIS is defines as a Computer-based Information System.

Role of Management Information System

The role of MIS is an organization that can be compared to the role of heart in the body. The system ensures that an appropriate data is collected from various sources processed, and then further sent to individuals, group of individuals or the management functionaries: the managers and the top management. It satisfies diverse needs through a variety of systems such as Query Systems, Analysis Systems, Modeling Systems and Decision Support System. MIS contributes to Strategic Planning, Management Control, Operational Control and Transaction Processing. It helps Clerical personnel in the transaction processing and answers the queries on the data pertaining to the transaction, the status of a particular record and references on a variety of documents. It helps Junior management personnel by providing the operational data for planning, scheduling and control, and helps in decision making at an operational level to correct an out of control situation. It helps Middle-Level management in short term planning, target setting and controlling the business functions.

It helps Top management in goal setting, strategic planning and evolving the business plans and their implementation. It plays an important role in information generation, communication, problem identification and helps in the process of decision making

Thus, MIS plays a vital role in the management, administration and operations of an organization.

Impact of Management Information System

Management Functions MIS facilitates effective management of marketing, finance, production and personnel. It eases the tracking and monitoring of the functional targets. The functional management is informed about the progress, achievements and shortfalls in the activity and the targets. It helps in forecasting and long-term perspective planning. The manager's attention is brought to a situation that is in exception in nature, inducing him/her to take an action or a decision in the matter. Understanding Business MIS uses the dictionary of data, entity and attributes. Respectively, designed for information generation in the organization. Since all Information Systems use the dictionary, there is common understanding terms and terminology in the organization delivering clarity in the communication and a similar understanding of an event in the organization. Systemization of business operations MIS leads to streamlining the operations, which complicate the system design. It improves the administration of business by bringing a discipline in its operations, as everybody is required to follow and use systems and procedures. This brings a high notch of professionalism in the business operation. Directing towards goals It helps indirectly to pull the organization in one direction towards the corporate goals and objectives by providing relevant information to the people in the organization. Management Efficiency The fund of information motivates an enlightened manager to use a variety of tools of the management. It helps him to resort to such exercises as experimentation and modeling.

Reduction of manpower overhead Since MIS works on the basic systems such as transaction processing and databases, the drudgery of clerical work is transferred to the computerized system, relieving the human mind for better work.

MIS and the User

Every person in the organization is the user of MIS. The people in the organization operate at all levels in the hierarchy. MIS caters to the needs of all. Clerk The main task of a clerk is to search the data, make a statement and submit it to the higher level. A clerk can use the MIS for quick search and reporting the same to the higher level. Assistant Assistant has the task of collecting and organizing data, and conducting a rudimentary analysis of it. MIS offers user tools to perform such tasks. Officer Officer has a role of integrating the data in different systems and disciplines to analyze it and make a critical comment if necessary. Executive Executive plays the role of decision-maker and a planner. He is responsible for achievement of targets and goals of an organization. MIS provides facility to analyze the data and offers the decision support system to perform the task of execution. MIS provides an action-oriented information. Manager Manager has the responsibility and accountability for business results. He/She is a strategist and a long-term planner, a person of foresight and analytical. MIS provides information in a structured or unstructured format to take actions. MIS caters to his changing needs of information. Through MIS, the information can be implemented as a strategic weapon to ledge the threats to business, making business more competitive, bringing about the organizational transformation through integration. A good MIS also erects an organization seamless by removing communication barriers.

Management as a Control System

A definition of control is the process through which managers assure that actual activities conform to the planned activities, leading to the achievement of the stated common goals. The control process measures a progress towards those goals, and enables the manager to detect the deviation from the original plan in time to take corrective actions before it is too late. Robert J Mockler defines the points out the essential elements of the control process. The basic steps of the control process are given in the figure,

Establish Standards of Performance

Measure Performance

Actua l Vs Std

Corrective Action

No Action

The management is a systematic effort, - To set the performance standards in line with the performance objectives - To design the information feedback systems - To compare the actual performance with the predetermined standards

To identify the deviations from the standards To measure its significance and to take corrective actions in case of significant deviations.

This systematic effort is undertaken through the management control system.

A reliable and effective control system has the following features. EARLY WARNING MECHANISM This is a mechanism of predicting the possibility of achieving the goals and the standards before it is too late and the allowing the manager to take corrective actions. PERFORMANCE STANDARDS The performance standard must be measurable and acceptable to all the organization. The system should have meaningful standards relating to the work areas, responsibility, managerial functions and so on. STRATEGIC CONTROLS In every business these are strategic areas of control known as the critical success factors. The system should recognize them and have controls instituted on them. FEEDBACK The control system would be effective, if it continuously monitors of the performance and sends the information to the control center for action. ACCURATE AND TIMELY The feedback should be accurate in terms of results and should be communicated in time for corrective action. REALISTIC The system should be realistic to that the cost of control is far less than benefits. Sufficient incentive and rewards are to be provided to motivate the people. THE INFORMATION FLOW

The system should have the information flow aligned with the organization. Structure and the decision-makers should ensure that the right people get the right information for action and decision making. EXCEPTION PRINCIPLE The system should selectively approve some significant deviations from the performance standards on the principle of management by exception.

MIS: A support to the Management

The management process is executed through a variery of decisions taken at each step of planning, organising, staffing, directing, coordinating and control. The MIS aids deciion making suitably. Decisions in Management Steps in Decision Management Planning A selection from various alternatives-strategies, resources, methods, etc., Organization A selection of a combination out of several combinations of the goals, people, resources, method, and authority Staffing Providing a proper manpower complement Directing Choosing a method from the various methods of directing the efforts in the organization Coordinating Choice of the tools and the techniques for coordinating the efforts for optimum results Controlling A selection of the exceptional conditions and the decision guidelines

Management Effectiveness & MIS

'Negandhi Estafen' provides a good model (Fig a) for the analysis of management effectiveness, which generates an enterprise effectiveness in achieving goals and objectives. The model is puts a lot of emphasis on the management philosophy and the environment factors on which the effective ness is dependent. The environment factors provide the opportunities to survive and grow with certain

constraints, while the management philosophy sets the guidelines for deciding the management practices to run the enterprise. While environment factors are difficult to control, it is left to the management to change its philosophy towards the various players in the business, viz., the employees, the consumers, the suppliers, the government, the community and the shareholders. If the attitude is to treat the employees as business partners, we empower them and create a sense of belonging to the organization. Such an attitude will have an impact on the management practices where the employee will play a decisive role. It will affect the organization structure by reducing its size and the reporting levels.

Environment Management Goal Setting

P L A N N I N G

O R G A N I S I N G

S T A F F I N G

D I R E C T I N G

C O O R D I N A T I N G

C O N T R O L L I N G

Information Support

MIS

If the attitude towards the consumer is changed to fulfill the expectations giving rise to a higher satisfaction, then the management practices in the product design, manufacturing and marketing will undergo a significant change. The product life cycle will be then a short, and more features and functions will be added to the product fulfilling not only the functional needs but also the service needs of the consumer. The management practices therefore emerge out of the management philosophy and the environment in which it operates. The management effectiveness will largely depend on both these factors. The MIS design would, therefore, be different depending upon the management practices followed by several organizations in the same industry. Such design improves the management effectiveness leading to an improvement in the enterprise effectiveness. FIG a: NEGANDHI ESTAFEN MANAGEMENT EFFECTIVENESS MANAGEMENT PHILOSOPHY ATTITUDE TOWARDS EMPLOYEES, CONSUMERS, SUPPLIERS, GOVENRMENT COMMUNITY, SHAREHOLDERS ENVIRONMENT FACTORS SOCIAL ECONOMICAL EDUCATIONAL POLITICAL LEGAL ENTERPRISE EFFECTIVENESS MODEL FOR ANALYSIS OF

MANAGERIAL PRACTICES PLANNING ORGANISING STAFFING DIRECTING COORDINATING MANAGEME NT

Goals, Objectives & Targets

The process of management begins with setting of goals, objectives and targets. The goals are long-term aims to be achieved by the organization; objectives are relatively short-term milestones to be accomplished, while targets generally refer to physical achievements in the organization's business. The setting of goals, objectives and targets is a top management function. It has its implications on the business operations and profits. It considers social, technological, political, educational, economical changes expected to occur in five to six years. The setting of goals, objectives and targets helps to pull the resources of the organization in one direction and solve. It helps build strategies, frame policies and set the rules of conducting the business. It provides an effective measure to monitor the managerial process. The people in the organization can have a common understanding of the purpose of managerial process and business operations. The goals, objectives and targets become reference points for strategic planning and operation planning. It further helps the management to identify key areas of business and management attention. The performance appraisal of the manager become impersonal and unbiased as it is done with reference to achievement of goals, objectives and targets. Its advantage is that it stimulates the development of people and provides motivation

Organization as a System
Each employee has needs which, if congruent with the goals and objectives of the organization, should lead to high levels of performance and job satisfaction. When individual needs and organizational goals are not congruent, poor performance, resistance, and other dysfunctional consequences can result. The introduction of an information system can alter the relationship between individual needs and organizational objectives. This section describes an approach to viewing organizations from both the individual and overall organizational perspective called Socio-technical approach, it is useful for dealing with the effects of new information systems. The Leavitt model describes the organization as consisting of four interrelated components: 1. Task 2. Technology 3. Structure 4. People The significance of Leavitts model for understanding organizational change is that, because of the strong interdependence, a change in one component inevitably has effects, planned or unplanned, on the others. The implicit approach of most system designers is to focus on the task and technology subsystems and completely ignore their effects on people and structure. Technology refers here generally to all tools used in task accomplishment. TASKS

PEOPLE

STRUCTURE

TECHNOLOG Y

CULTURE

AN ALTERNATE MODEL OF ORGANIZATIONAL SUBSYSTEMS MODIFIED FROM THE LEAVITT MODEL TO INCLUDE CULTURE

MIS: Organization Effectiveness

Management Information System (MIS) should be designed viewing the organization as discussed earlier. MIS plays a very important role in creating organization behavior which in turn sets the goals for achievement. Technology & people decide the organization structure and style of the management

GOALS TECHNOLOGY TASKS PEOPLE ORGANISATION STRUCTURE Creates Helps to achieve ORGANISATION BEHAVIOUR Modifies ORGANISATION MOTIVATION ORGANISATION LEARNING ORGANISATION CHANGES

MANAGEMENT STYLE

CULTURE

Helps MIS

Organizational Behavior & Management Information System