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UNIT- 1 MANAGEMENT INFORMATION SYSTEM:
BASIC CONCEPTS
UNIT STRUCTURE
1.0 Introduction 1.1 Learning Objectives 1.2 Basic Concepts 1.4 Functions of Management 1.5 Levels of Management: 1.5.1 Top Level Management: 1.5.2 Middle Level Management: 1.5.3 Low Level Management: 1.6 Concept of a System 1.6.1 System Concepts 1.6.2 Components of a System 1.6.3 Types of System 1.7 Data and information 1.8 Information System 1.9 Need for information systems 1.10 Uses of information system 1.11 Roles of Information system in business 1.12 Let us Sum-up 1.13 Self Assessment Questions 1.14 Model Questions 1.15 References and Further Readings
1.0 Introduction
Management Information System (MIS) is a study of people, technology, organizations, and the relationships among them in a broader sense. However in precise terms MIS is a software system that focuses on the management of information technology to provide efficiency and effectiveness or strategy decision making. The term is often used in the academic study of businesses and has connections with other areas, such as information systems, information technology, informatics, e-commerce and computer science. In this unit, we will discuss the basic concepts in Management Information
System.
1.1 Learning Objectives
After going through this unit you should be able to: Know the fundamental management concepts Understand the basic concepts of Information Systems Understand and apply core knowledge in Information Systems Identify and analyze requirements for information systems Understand and apply design principles in Information Systems. Identify the basic components of Management Information Systems. Conceptualize information systems as combinations of hardware and software technologies. Know the applications of information systems in various levels of Management.
1.2 Basic Concepts
Management Information System is an accumulation of 3 different terms as explained below. Management: We can define management in many ways like, “Manage Man Tactfully” or Management is an art of getting things done by others. However, for the purpose of Management Information System, management comprises the process and activity that a manager does in the operation of their organization, i.e., to plan, organize, direct and control operations. Information: Information simply means processed data or in the layman language, data which can be converted into meaningful and useful form for a specific user. System: The system can be explained in a following ways:
accomplish the goals. A manager is thus someone who defines, plans, guides, helps out, and assesses the work of others, frequently people for whom the manager is accountable in an organization. The following mentioned management functions will involve creative problem solving. Planning: According to Terry and Franklin, “planning is selecting information and making assumptions concerning the future to put together the activities necessary to achieve organizational objectives.” Planning includes both the broadest view of the organization, e.g., its mission, and the narrowest, e.g., a tactic for accomplishing a specific goal. Organizing : Organizing is the classification and categorization of requisite objectives, the grouping of activities needed to accomplish objectives, the assignment of each grouping to a manager with the authority necessary to supervise it, and the provisions for coordination horizontally and vertically in the organization structure. The focus is on separation, coordination, and control of tasks and the flow of information inside the organization. It is in this function that managers allocate authority to job holders. Directing: Direction is telling people what to accomplish and seeing that they do it to the finest of their capability. It includes making assignments, corresponding procedures, seeing that mistakes are corrected, providing on the job instruction and, of course, issuing orders.” The purpose of directing is to control the behaviour of all personnel to accomplish the organization's mission and objectives while simultaneously helping them accomplish their own career objectives. Staffing: Staffing function requires recognition of human resource needs, filling the organizational structure and keeping it filled with competent people. This function includes recruiting, training; evaluating and compensating are the specific activities. Controlling : “Control is the course of action that measures present performance and guides it towards some predetermined goal. The quintessence of control lies in checking existing actions against some desired results determined in the planning process.”
1.5 Levels of Management
According to the expert there are three types of level of management: i) Top Level Management ii) Middle Level Management
iii) Low Level or Operative Management 1.5.1 Top Level Management Top level management consists of board of directors, managing directors or executive committee members. Objectives of Top Level Management include the following. Setting key objectives, policies and identifying factors essential for the development of the organization. Making appointments to the top position of the organization such as managers department heads etc. Reviewing the work of different personnel in various levels. 1.5.2 Middle Level Management Middle level management consists of managers of various departments such as productions, sales, marketing, resource, finance etc. Objectives of Middle Level Management include the following. Follow the rules and policies formulated by the top level management. Motivating personnel for higher productivity. Collecting detail analysis reports from the various departments. Mutual understanding with other departments in the organization. Recommendations to the top level management. 1.5.3 Low Level Management. Low level management consist of supervisors, daily workers etc. Follow the rules and guidelines made out by the top level authentic of the organization. Some of the functions of Lower Level Management include the following. To issue orders and instructions to the workers and to supervise and control their work To classify and assign jobs to the workers To direct and guide the workers about work procedure To arrange for the necessary tools, equipment, materials etc., for the worker To solve the problems of workers To inform the management about the problems of workers which are not solved at this level? To maintain discipline among the workers and to develop in them the right approach to work. To maintain good human relations. To build a high group morale among the workers.
a. Dynamic System: When the interrelated component of the system interacts with each other and this controlled by management then it is known as Dynamic System. b. Cybernative System Dynamic System implementing the concept of feedback and control is known as Cyber native System. c. Open System A system got interacts with other system in its environment by exchanging input and output with its environment d. Adoptive System A System having the ability to change itself and its environment in order to survive is called an Adoptive System.
1.7 Data and information
By data we mean the facts or figures representing an object, place or the events occurring in the organization. It is not enough to have data (such as statistics on the economy). Data themselves are fairly useless, but when these data are interpreted and processed to determine its true meaning, they become useful. Characteristics of Data
They are facts obtained by reading, observation, counting, measuring and weighing etc. which are then recorded Data are derived from external and internal sources (activities with firm). Data may be produced as an automatic by-product of some routine but essential operation such as the production of an invoice or alternative a special counting or measuring procedure must be introduced and the result recorded. The source of data need be given considerable attention because if the sources of the data flawed, any resulting information will be worthless. Data Processing Data or processing systems perform the essential role of collecting and processing the daily transactions of the organizations. Data processing is necessary to ensure that the day-to-day activities of the organization are processed, recorded and acted upon. Files are maintained which provide both the current data for transaction, for example the amount invoiced and cash received during the month for statement preparation, and which also serve as a basis for operational and tactical control and for answering enquiries. By information , we mean that the data have been shaped into a meaningful form, which may be useful for human beings.
So, when data are processed, interpreted, organized, structured or presented so as to make them meaningful or useful, they are called information. Information provides context for data. Information is created from organized structured and processed data in a particular context, “information can be recorded as signs, or transmitted as signals. Information is any kind of event that affects the state of a dynamic system that can interpret the information. Conceptually, information is the message (utterance or expression) being conveyed. Therefore, in a general sense, information is ‘knowledge communicated or received concerning a particular fact or circumstance”. Characteristics of Good Information Good information is that which is used and which create value. Experience and research shows that good information has numerous qualities which are:
- Relevance: Information must be relevant to the problem being considered. Too often reports, messages, tabulations etc. contain irrelevant parts which most prevent the user of the information to get the actual meaning of what the sender wants.
- Accuracy : Information should be sufficiently accurate for it to be relied upon by the manager and for the purpose for which it is intended.
- Completeness : Ideally, all the information required for a decision should be available. However, in practice, this is not often obtainable. What is required is that the information is complete in respect of the key elements of the problem. This suggests that there should be interaction between information provides and users to ensure that the key factors are identified. 4. Confidence in the source : For information to have value it must be used. For it to be used managers must have confidence in the source. Confidence is enhanced: Data Processes Output a. The source has been reliable in the past b. There is good communication between the information producer and the manager.
- Communication to the right person : All persons have a defined sphere of activity and responsibility and should receive information to help them carry out their designated tasks. In practice this is not always as easy as it sounds. It is quite common for information to be supplied to the wrong level in the organization. a superior may not pass it on the person who needs it whilst subordinates may hold onto information in an attempt to make themselves seem indispensable.
Some examples of information systems include the following. Airline reservations (seat, booking, payment, schedules, boarding list, special needs, etc.). Bank operations (deposit, transfer, withdrawal) electronically with a distinguish payment gateways. Integration of department with the help of contemporary software’s like ERP. Logistics management application to streamline the transportation system. a. Feedback and control A system with feedback and control components is sometimes known as cybernetic system that is a self monitoring or self regulating system. b. Feedback. Feedback is a data about the performance of a system. c. Control. Control involves monitoring and evolving feedback determines whether a system is moving towards the achievement of its goals. The control function makes necessary adjustments to a system input and possessing components to ensure that to produce proper output.
1.8 Components of Information System
a. People Resources People are required for the operation of all information system. People Resources divided into two types i) End-Users These are the people who use an information system or the information it produce. Ex: Accounts, Sales Persons, Customers and Managers. ii) Information system specialist These are the people who develop and also operate Information system. Ex: System Managers, Programmers, Computer Operation.
b. Data Resources Data resources of an Information system are typically organized in two parts: i) Database Database holds processed and organized data. ii) Knowledge Base It holds knowledge in a variety of forms such as facts, rules, and case examples. c. Software Resources It includes all sets of information processing instruction. It is also two types: i) Program: Set of operating instructions the direct and computer hardware. ii) Procedure Set of Information processing instructions needed by people. Ex: Operating System, Spreadsheet Programs, and Word processor Programs. d. Hardware Resources Include all physical devices and materials used in information processing. It has also two types i) Machines Ex: Computer, Video Monitor, Scanner.
1.9 Need for Information Systems
The information system is very important for the internet technology and the traditional business concerns and is really the latest phase in the ongoing evolution of business. All the companies need to update their business, infrastructure and change way they work to respond more immediately to customer need. A first step in designing and developing an MIS is to assess the information needs for decision making of management at different hierarchical levels, so that the requisite information can be made available in both timely and usable form to the people who need it. Such assessment of information needs is usually based on personality, positions, levels and functions of management.
1.10 Uses of Information System
Information system and technology including E-business and E-commerce technology and application has become vital component of successful business and organization. It is a study of business administration and management. For a manager or a business professional it is just as important to have basic understanding of information system and any other functional area in business.
1.11 Roles of Information Systems in business
An Information system supports the business Organizations in the following ways. a) Support the Business Process: Treats inputs as a request from the customer and outputs as services to customer. Supports current operations and use the system to influence further way of working. b) Support Operation of a Business Organization : An IS supports operations of a business organization by giving timely information, maintenance and enhancement which provides flexibility in the operation of organizations. c) Support Decision Making: An IS supports the decision making by employee in their daily operations. It also supports managers in decision making to meet the goals and objectives of the organization. Different mathematical models and IT tools are used for the purpose evolving strategies to meet competitive needs. d) Strategies for an Organization: Today each business is running in a competitive market. An IS supports the organization to evolve appropriate strategies for the business to assent in a competitive environment
1.12 Let us Sum Up
In this unit we have, have discussed some basic concepts relevant to management information system such as the fundamental concepts of management, levels of management, systems concepts, types of systems, components, information and types of information systems and examples of information systems. Management Information System is seen as a way of evaluating, analyzing and processing an organization data to produce meaningful and useful information from which the management can take decision to ensure future growth and development of the organization. In the next unit we will discuss different types of Information systems and their support to different levels of management in an organization.
1.14 Model Questions
- What are three levels of management and outline the objectives each level of management.
- Discuss the concepts and components of a system.
- Differentiate between data and information. What are the characteristics of good information?
- What is an Information system? Discuss about each component of an Information System.
- Discuss the role of information systems in business.
1.1 5 References and Further Readings
1. Louis A. Allen, Management and Organization, McGraw-Hill Kogakusha,
Ltd.
- Sadagopan, Management Information System, 2007, Prentice Hall of India.
- McLeod, R. and George P Schell (2008). Management information systems (10th ed.). Pearson education India
- C. W. Frenzel and J. C. Frenzel, 2004. “Management of Information Technology”, 4th edition Thomson course technology, Cengage Learning.
- Laudon, K. C. & Laudon, J. P. Management Information Systems: Managing the Digital Firm. 10th ed. Prentice Hall and Pearson Education,
- Management Information System, Study Material of Indira Gandhi National Open University.
- Management Information System, Study Material of National Open University Of Nigeria
- http://ocw.mit.edu
- http://www.chriskimble.
- Com/Courses/mis/mis_links.
UNIT 2 MIS APPLICATIONS IN ORGANISATION
UNIT STRUCTURE
2.0 Introduction 2.1 Learning Objectives 2.2 Information Concept 2.3 Need for Information Systems 2.4 Information for Management 2.4.1 Production Management 2.4.2 Marketing Management 2.4.3 Material Management 2.4.4 Finance Management 2.4.5 Human Resource Management 2.5 Computer Based Information Systems 2.5.1 Transaction Processing Systems 2.5.2 Management Information Systems: 2.5.3 Decision Support Systems 2.5.4 Office Automation Systems 2.6 Management Information Systems (MIS) 2.6.1 Definition 2.6.2 Objectives of MIS 2.6.3 Characteristics of MIS 2.6.4 Role of MIS in an Organization 2.7 Let us Sum Up 2.8 Self Assessment Questions 2.9 Model Questions 2.10. References and Further Readings
2.2 Information Concepts
Data is a raw material for information systems. Collecting data costs money and hence one must collect necessary and sufficient data. Data is generally input to the information systems for processing. Data size is also growing but is useless unless it is processed to create information. Information is processed data, used by managers to initiate actions and to run the organization efficiently. The data processed by machines gives information
Types of Information Strategic: Needed for long range planning and directions. This is less structured. Tactical: Needed to take short range decisions to improve profitability and performance. Operational: Needed for day to day operations of the organization. Eg: Daily Sales, Billing. Statutory: Needed by law to send to government authorities. Eg: Sales tax return.
2.3 Need for Information Systems
Information systems are needed when timely processing for fast action is needed; same data has to be processed in different ways and when organizations require innovative processing.
Fig: Management hierarchy and information needs
Functional areas of management are as follows A. Production B. Marketing C. Materials – purchase, stores D. Finance – accounts E. Human Resource Development (HRD) F. Research and Development (R&D)
2.4 Information for Management
Different types of information required for various departments of an enterprise can be categorized as follows.
2.4.1 Production Management
The following type of information is needed in production management: Strategic Information:
- Yearly and monthly production quotas and alternate schedules
- Policies on machine replacement, augmentation and modernization.
Top
Middle
Lower
Unstructured Information
Semi-structured Information
Highly structured information
Strategic: Long- ranged Planning
Tactical: Short- ranged Planning
Operational: day to day activities
Top
