Basic Information Concepts and Definitions Need for Information and Information Systems(IS)in an organization characteristics of Information and

d Organization with respect to organization form, structure , philosophy, hierarchy etc

Introduction to Management Information Systems

CHAPTER-1

1.1 MANAGEMENT INFORMATION SYSTEM ( MIS) CONCEPT The concept of the MIS has evolved over a period of time comprising many different facets of the organizational function. MIS is a necessity of all the organizations. The initial concept of MIS was to process data from the organization and presents it in the form of reports at regular intervals. The system was largely capable of handling the data from collection to processing. It was more impersonal, requiring each individual to pick and choose the processed data and use it for his requirements. This concept was further modified when a distinction was made between data and information. The information is a product of an analysis of data. This concept is similar to a raw material and the finished product. What are needed are information and not a mass of data. However, the data can be analyzed in a number of ways, producing different shades and specifications of the information as a product. It was, therefore, demanded that the system concept be an individual- oriented, as each individual may have a different orientation. Towards the information. This concept was further modified, that the system should present information in such a form and format that it creates an impact on its user, provoking a decision or an investigation. It was later realized then even though such an impact was a welcome modification, some sort of selective approach was necessary in the analysis and reporting. Hence, the concept of exception reporting was imbibed in MIS. The norm for an exception was necessary to evolve in the organization. The concept remained valid till and to the extent that the norm for an exception remained true and effective. Since the environment turns competitive and is ever changing, fixation of the norm for an exception becomes futile exercise at least for the people in the higher echelons of the organization. The concept was then evolved that the system should be capable of handling a need based exception reporting. This need maybe either of an individual or a group of people. This called for keeping all data together in such a form that it can be accessed by anybody and can be processed to suit his needs. The concept is that the data is one but it can be viewed by different individuals in different ways. This gave rise to the concept of DA .ABASE, and the MIS based on the DATABASE proved much more effective. Over a period of time, when these conceptual developments were taking place, the concept of the end user computing using multiple databases emerged. This concept brought a fundamental charge in MIS. The change was decentralization of the system and the user of the information becoming independent of computer professionals. When this becomes a reality, the concept of MIS changed to a decision making system. The job in a computer department is to manage the information resource and leave the task of information processing to the user. The concept of MIS in today world is a system which handles the databases, databases, provides com-putting facilities to the end user and gives a variety of decision making tools to the user of the system. The MIS model of the organization changes over a time as the business passes through several phases of developmental growth cycle. It supports the management of the business in each phase

by giving the information which is crucial in that phase. Every business has critical success factors in each phase of growth cycle and the MIS model gives more information on the critical success factors for decision making. 1.2 MIS DEFINITION The Management Information System (MIS) is a concept of the last decade or two. It has been understood and described in a number ways. It is also known 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 give below. 1. The MIS is defined as a system which provides information support for decision making in the organization. 2. 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. 3. The MIS is defined as a system based on the database of the organization evolved for the purpose of providing information to the people in the organization. 4. The MIS is defined as a Computer based Information System. Thought there are a number of definitions, all of them converge on one single point, i.e., the MIS is a system to support the decision making function in the organization. The difference lies in defining the elements of the MIS. However, in today.s world MIS a computerized .business processing system generating information for the people in the organization to meet the information needs decision making to achieve the corporate objective of the organization. In any organization, small or big, a major portion of the time goes in data collection, processing, documenting it to the people. Hence, a major portion of the overheads goes into this kind of unproductive work in the organization. Every individual in an organization is continuously looking for some information which is needed to perform his/her task. Hence, the information is people-oriented and it varies with the nature of the people in the organization. The difficulty in handling this multiple requirement of the people is due to a couple of reasons. The information is a processed product to fulfill an imprecise need of the people. It takes time to search the data and may require a difficult processing path. It has a time value and unless processed on time and communicated, it has no value. The scope and the quantum of information is individual-dependent and it is difficult to conceive the information as a well-defined product for the entire organization. Since the people are instrumental in any business transaction, a human error is possible in conducting the same. Since a human error is difficult to control, the difficulty arises in ensuring a hundred per cent quality assurance of information in terms of completeness, accuracy, validity, timeliness and meeting the decision making needs.

In order to get a better grip on the activity of information processing, it is necessary to have a formal system which should take care of the following points: Handling of a voluminous data. Confirmation of the validity of data and transaction. Complex processing of data and multidimensional analysis. Quick search and retrieval. Mass storage. Communication of the information system to the user on time. Fulfilling the changing needs of the information. The management information system uses computers and communication technology to deal with these points of supreme importance. 1.3 ROLE OF THE MANAGEMENT INFORMATION SYSTEM The role of the MIS in an organization can be compared to the role of heart in the body. The information is the blood and MIS is the heart. In the body the heart plays the role of supplying pure blood to all the elements of the body including the brain. The heart works faster and supplies more blood when needed. It regulates and controls the incoming impure blood, processes it and sends it to the destination in the quantity needed. It fulfills the needs of blood supply to human body in normal course and also in crisis. The MIS plays exactly the same role in the organization. The system ensures that an appropriate data is collected from the various sources, processed, and sent further to all the needy destinations. The system is expected to fulfill the information needs of an individual, a group of individuals, the management functionaries: the managers and the top management. The MIS satisfies the diverse needs through a variety of systems such as Query Systems, Analysis Systems, Modeling Systems and Decision Support Systems the MIS helps in Strategic Planning, Management Control, Operational Control and Transaction Processing. The MIS helps the clerical personnel in the transaction processing and answers their queries on the data pertaining to the transaction, the status of a particular record and references on a variety of documents. The MIS helps the junior management personnel by providing the operational data for planning, scheduling and control, and helps them further in decision making at the operations level to correct an out of control situation. The MIS helps the middle management in short them planning, target setting and controlling the business functions. It is supported by the use of the management tools of planning and control. The MIS helps the top management in goal setting, strategic planning and evolving the business plans and their implementation. The MIS plays the role of information generation, communication, problem identification and helps in the process of decision making. The MIS, therefore, plays a vita role in the management, administration and operations of an organization.

1.4 IMPACT OF THE MANAGEMENT INFORMATION SYSTEM Since the MIS plays a very important role in the organization, it creates an impact on the organization.s functions, performance and productivity. The impact of MIS on the functions is in its management. With a good support, the management of marking, finance, production and personnel become more efficient. The tracking and monitoring of the functional targets becomes easy. The functional, managers are informed about the progress, achievements and shortfalls in the probable trends in the various aspects of business. This helps in forecasting and long- term perspective planning. The manager.s attention is brought to a situation which is exceptional in nature, inducing him to take an action or a decision in the matter. A disciplined information reporting system creates a structured data and a knowledge base for all the people in the organization. The information is available in such a form that it can be used straight away or by blending analysis, saving the manager.s valuable time. The MIS creates another impact in the organization which relates to the understanding of the business itself. The MIS begins with the definition of a data entity and its attributes. It uses a dictionary if data, entity and attributes, respectively, designed for information generation in the organization. Since all the information system use the dictionary, there is common understanding of terms and terminology in the organization brining clarity in the communication and a similar understanding an even of the organization. The MIS calls for a systemization of the business operation for an affective system design. A well designed system with a focus on the manger makes an impact on the managerial efficiency. The fund of information motivates an enlightened manger to use a variety of tools of the management. It helps him to resort to such exercises as experimentation and modeling. The use of computers enables him to use the tools techniques which are impossible to use manually. The ready-made packages make this task simpler. The impact is on the managerial ability to perform. It improves the decision making ability considerably. Since the MIS works on the basic systems such as transaction processing and databases, the drudgery of the clerical work is transferred to the computerized system, relieving the human mind for better work. It will be observed that a lot of manpower is engaged in this activity in the organization. The MIS has a direct impact on this overhead. It creates an information- based work culture in the organization.

CHAPTER-2

Organisation Structure and Theory

2.1 BASIC MODEL OF ORGANISATION STRUCTURE The word organization means two things. The first meaning of the word organization is an institution or a functional group. A business organization a hospital, a school a university is some such institution keeping in view the concept of division of labor, authority, responsibility and decision making so that the institution as a stable system, works coherently towards the achievement of goals. the level at which a person is holding position. The authority is measured on the basis of command on control of resources, the risk of business, and the decision making power to manage the risk and reward. When the authority. Is distributed in a vertical order in terms of levels, the organization is built on the principle of hierarchy of authority. The effectiveness of the authority is based on the span of control, i.e., the number of person being managed and controlled by a person. Depending on the organization, and business, the span may differ from four to seven. The span outside this range has proved to be unproductive and inefficient. The organization structure is built by arrangement of organizational subsystems. The organization structure is built on four basic principles, viz. hierarchy of authority, specialization, standardization or formalization and, centralization. The structure is built to achieve goals and objectives fitting into the environment. The structure built on any principle shows division of work, managerial and non- managerial manpower allocation as well as flows of decision responsibility and exchange of information. Hierarchy of Authority The authority rests with the individual in the organization. The degree and strength of authority depends on the level at which a person is holding position. The authority is measured on the basis of command on control of resources, the risk of business, and the decision making power to manage the risk and rewards. When the authority is distributed in a vertical order in terms of levels, the organization is built on the principle of hierarchy of authority. The effectiveness of the authority is based on the span of control, i.e., the number of persons being managed and controlled by a person. Depending on the organization, and business, the span may differ from four to seven. The span outside this range has proved to be unproductive and inefficient. Speciallsation The second principal of building organization structure is specialization. Specialization can be decided in a number of ways, arranging all similar and associated tasks under one head. For example, a business organization can be structured on the specialization such as Manufacturing, Marketing, Accounting and Personal. A hospital can be structured on the basis of specialization such as General Medicine, Surgery, function, helps to select right people and group them properly, aids in functional planning and control of the activities of the organization.

Standardisation (Formalization) The purpose of standardization or formalization is to make a person in an organization independent, whereby the interaction between the individuals in the organization is minimum. The people work on the basis of rules. Procedures, systems, guidelines and policies. If the degree of such specialization is very high a person can supervise more number of people. In other words, it affects the of control. Favorably. With specialization, the delegation of work and its control has become easier. Where standardization is not possible owing to the nature of business, the risk in business and decision making complexity span of control is reduced as the number of people handle similar range of operations. Requirement of manpower then increases making the organization top heavy. Centralization Centralization refers to the location or position where the decision-making centre is localized. In a highly centralized organization, the decision making is at the top and in a decentralized organization; it is delegated down the lien in the organization hierarchy. When business risks are high and difficult to manage, the organization emerges as centralized. The organization is structured on the basis of the above four principles. The blend of these principal is decided on the nature of business, risk of business, size of business, management style and the environment of business. The blending of these principles would undergo a change as the business grows. The organization is under a continuous process of change to meet the changing needs of business, the organization will have a different structure in its various business stages namely, inception, growth, maturity, and decline. The structure of organization affects organizational productivity, individual performance, growth of human resource, and the manpower itself. A considerable amount of saving in manpower and overhead expenses is possible, if the organization is property structured to the business needs and towards fulfilling the objectives. Independent of the blend of these principles, the effectiveness of the structure largely depends on the quality of people . ability, skills, knowledge attitude and motivation. The basic model will have more levels if the size of the organization is very large. The number of levels will be determined on the basis of the span of control and the nature of work. The appropriateness of the structure can be decided based on the factors like responsibility and authority, economy in conducting the business, the ability to achieve the goals and objectives, a smooth flow of information exchange and communication.

There are four variations of the basic model which are widely used in real life.

2.2 MODIFICATIONS TO THE BASIC MODEL OF ORGANISATION STRUCTURE. There are four modifications to the basic model of organization as under. 1. Functional; 2.Product / Market / Service; 3. Project; and 4. Matrix. Functional Organisation The functional organization is most suitable where the organization business can be split into clear divisions of activity and all of them are equally important. For example, the business organization can be functionally organized into four or five functions such as marketing manufacturing, finance, personnel, and materials. The strength of the people and the hierarchy in each of the functional organizations would vary depending upon the size and the number of activities. Decision making in any functional organization is at the level of the functional head with accountability to the chief of the organization. The implications of the decisions are largely on the functions themselves. A decision affecting other functions of the business, however, is referred to the top management. The in formation flow is from the top to the bottom and in the reverse order. The information flow across the functions is not expected. Accumulation of information is at the chief executives level and is shared by the others. The functional organization is most suited where each function is a specialty and calls for an expertise in the field; and where coordination is of a very low order and can be handled easily through the management process. The organization works efficiently when the business is stable and is expected to grow in a steady manner. When the business becomes competitive and develops threats to its growth, the functional structure undergoes a change. The development of people is on the specialized functions and hence they are not equipped to handle other functions if required. The people in a functional organization develop a narrow outlook restricted to their own functions and responsibilities. The corporate culture is difficult to imbibe in a functional setup. Most of the manufacturing, selling organisanisations in their initial period are structured on the functional lines. The government departments and agencies are organized on the functional principle. Product / Market / service Organisation When the organization grows large in turnover and strength, and when the decisionmaking relates to either the product or the market or the service the organizing structure is built around one of these factors. In this structure , the total responsibility rests with the product / market / service head. He is expected to take all the decisions regarding finance material, etc. The people in the organization report to the product head. The decision making in this structure is faster and to some extent centralized. The inter functional conflicts are avoided resulting in speedy business progress. In this structure,people work more for product goals then the corporate goals. The contribution to profit by product can be easily measured as profit is earned by product business unit. In this structure, the manpower requirement is higher and the people develop specializations in the specific technology and

management. A project organization is a special case of product organization where the common service like finance, purchase etc. are organized at the functional level. But project resources are allocated to the project manager. Since the business resources. This type of organization structure helps in making quick decisions for project control in terms of cost resource and time. In a project organization some of the functions are of corporate responsibility and some of them are the project manager.s responsibility. In a project business, the activity is one at a time and has implications on the subsequent activities in the project. Therefore, any problem or conflict relating to the activity needs to be resolved immediately. This calls for quick decisions. This is possible by organizing all the functional resources under one command of the project manager. Matrix Organisation In all the three organization structures discussed so far, the communication protocol is vertical in the hierarchy. The information flow is within the hierarchy. The lateral communication between the functions is not permitted. In a matrix organization a vertical as well as a lateral communication and information flow is allowed. The matrix organization integrates functional responsibility with product responsibility. It is a combination. Of the functional and the product organization structure. A product manager is responsible for the total performance of the product and he will have the production manager, the marketing manager, the accounts manager as his counterparts in the manufacturing, marketing and accounting functions respectively. These functional managers report to the functional head vertically and the product manager laterally. The matrix organization structure is used in big companies having diverse business activities. The business units, known as strategic business units, are organized with a unit head at the top. The structure enjoys the advantages of a functional as well as of a product organization. It should be noted be noted that the organization structure is a dynamic model. It is effective for the purpose it is set to fulfill under certain conditions. The moment the business conditions change, the structure should undergo a suitable change. The structural change does not limit them from one type to the other but many other qualitative changes are also desirable.There has to be a change in the people in terms of strengths, skills and abilities. A functional head in the functional organization may not be suitable to shoulder the responsibility of the Product Manager in a product organization structure, because of inherent limitations of narrow specialized experience as a functional head. With the standardization and formalization drive in the organization, the span of control can be enlarged than before. With the delegation of authority, backed by the rules and policies the junior level personnel become more knowledgeable, experienced and capable of shouldering higher responsibility. This would affect the levels in hierarchy.

CHAPTER-3

Information and information system need and importance

Characteristics Of Good IS
Characteristics of a Good Information System Management information systems (MIS) is an organized approach to gathering information from company operations and making a strategic management decision. Developing quality characteristics for gathering information is essential to making solid management decisions. 1. RelevanceInformation should be relevant to the strategic decision that company management is currently reviewing. Because companies may review several business opportunities at one time, avoiding information not relating to the decision is essential.

2.

Accurate -- information should be accurate and avoid any inclusions of estimates or probable costs. Making decisions based on estimates can lead to cost overruns or lower profits from future operations. Timely Many management decisions are based on information from a certain time period, such as quarterly or annual periods. Information outside of the requested time frame may skew information and lead to an Improperly informed decision.

3. Exhaustive MIS information gathering should resemble an upside-down triangle. The early stages of information gathering should be exhaustive, including all types of company information. As management narrows its decision-making process, the information is refined to include only the most relevant pieces.

4. Cost-Effective The MIS needs to be a cost-effective and efficient system for gathering information. Most of these systems are developed internally, creating costs that cannot be passed to clients.

Characteristics of a Good Manager

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5. Great managers develop future vision

6. Response to any problem. They attack pending...