Management Information Systems (MIS) Exam - PDF

According to the Systems Approach of Management, an organization is a sum of the interrelated parts or sub-systems. The management is responsible for making relations amongst these Sub-Systems into a total system. For this purpose Management Information System (MIS) becomes an unavoidable part of an...

According to the Systems Approach of Management, an organization is a sum of the interrelated parts or sub-systems. The management is responsible for making relations amongst these Sub-Systems into a total system. For this purpose Management Information System (MIS) becomes an unavoidable part of any organization. Management Information System is a systematized cyclic pattern of communication. By this System, organizations cannot achieve their goals. System This is an organized grouping of components having certain interrelationships and working collectively to achieve a set of objectives. The system approach is a method or framework which helps us to analyze and explore the operations and interactions which exist in the systems around us. Any given system possesses the follow characteristics or attributes: 1\. Organization -- This is the arrangement of components that help to achieve objectives. 2\. Central objective -- Among the interacting components there has to be goals or objectives focused by all. 3\. Interaction -- This is the manner in which each component functions with other components of the system. 4\. Interdependence -- This means that parts of the organization or system depend on one another. 5\. Integration -- This is concerned with how a system is tied together. **Elements of a System** 1\. INPUT -- These are components that are required to be processed so as to give the output. This includes raw materials, energy and human labor. 2\. OUTPUT -- This is the product of processing e.g. goods or a service. 3\. PROCESSING -- This is the transformation or conversion procedure of input into output. i.e. production department or factory. 4\. CONTROL -- this element guides the system. In an organization, this is the decision-making body that controls the pattern of activities and governs input, processing, and output, e.g., the management of a company. 5\. FEEDBACK -- Control in a dynamic system is achieved by feedback, which measures output against the standard. 6\. ENVIRONMENT -- This is the source of external elements that interact with the system or exert pressure e.g. customers, suppliers, government policies and competition. 7\. BOUNDARY -- This are the limits that identity its components, processes and interrelationships when it interfaces with another system e.g. in a company the invoicing function could be undertaken by the sales department whereas in another it's undertaken by the Account department. **Meaning of MIS** Management Information System (MIS) is composed of three key components: Management, Information, and System. Essentially, MIS can be defined as a framework that delivers information to management. It serves as a process that provides essential data to aid in planning, controlling, and making various managerial decisions. MIS functions as a formal, organized, and systematic communication system. It is a collective arrangement of personnel and resources, structured into an integrated system to ensure that relevant, sufficient, and timely information is made accessible to executives. It is important to note that for large enterprises, Management Information Systems (MIS) can be developed using electronic computers. While MIS itself is not a new concept, its computerization is a recent advancement. Before computers were invented, MIS techniques already existed to support operations. The introduction of computers has brought additional benefits, including increased speed, improved accuracy, and the ability to handle larger volumes of data. ***Some definitions of MIS*** According to Kennevans, MIS is an organised method of providing past, present and projection information relating to internal operations and external intelligence. According to Gordon B. Davis, MIS is an integrated man/machine system for providing information to support the operations management and decision making functions of an organization. According to Robert G. Mardick, goel E Ross and gomes R.Claggett, MIS is the System intended to provide information for decision making, planning, organizing and controlling the operations of the subsystems of the firm and to provide a Synergistic organization in the process. **Definition of MIS** Any telecommunications and/or computer related equipment or interconnected system or sub-systems of equipment that is used in the acquisition, storage, manipulation, management, movement, control, display, switching, interchange, transmission or reception of voice and/or data, and includes software, firmware and hardware. Also, a MIS is an IS that provides information to the management to enable them plan, coordinate, control monitor and make decision by providing routine, summarizes and exceptional report. The focus is on the design and operation of the MIS which means that the information system is viewed as a means of processing data, i.e. the routine facts and figures of the organization, into information which is then used for decision making. It is changes in decision behavior which distinguish data from information. **The Figure 1.1 summarizes this approach.** Data Flows Information Decision Flows Figure 1.1 This means that MISs are qualitatively different from data processing systems and that management involvement and interaction between information specialists and management are the key features of successful MIS design. Therefore, MIS can be defined as: *A system to convert data from internal and external sources into information and to communicate that information, in an appropriate form, to managers at all levels in all functions to enable them to make timely and effective decisions for planning, directing and controlling the activities for which they are responsible.* To be successful an MIS must be designed and operated with due regard to **organization** and **behavioral** principles as well as **technical** factors. Management must be informed enough to make an effective contribution to systems design and information specialists (systems analysts, accountants, operations researchers and others) must become more aware of managerial functions and needs so that, jointly, more effective MISs are developed. ##### Characteristics of MIS ##### 1. **System approach**: MIS is based on the System approach. It is a step by step approach to the study of system and its performance. Performance is made in the light of the objective which has been constituted for that purpose. 2. **Management oriented**: Under MIS, necessary information is provided to each manager at the right time, in right form and a relevant one, which is required by the management by providing information in taking effective managerial decision. 3. **Future oriented**: MIS is designed and developed keeping in view the future position of the business. Therefore, MIS should provide useful information on the basis of projections based on which future action can be taken. 4. **Integrated**: MIS is designed in taking a comprehensive view or looking at the complete picture of the interlocking sub-systems that operate within the company. It considers all aspects of production, marketing, accounting, financing, management etc. 5. **Common-data followed**: MIS deals with the common data that are available in the business. MIS provides data and information for taking effective managerial decision, which must select the real picture of the business. 6. **Long term planning**: MIS is prepared for long term planning of the business. So, the designer should avoid the outdated data and information in designing and developing time of MIS. The designer should consider the present situation and future trend of the business activities, when MIS is designed. 7. **Control database**: Another important characteristic of MIS is that it always based on centralized data and information. It is because of this fact that MIS is to supply data and information in such a way so that the management can take its important decision. ##### ##### Functions of MIS The main purpose of MIS is to provide the management with the necessary information for decision making. In order to achieve this purpose MIS is to perform the following functions. 1. **Collection of data:** The first function of MIS is to collect necessary data from both internal and external sources of the organization. The data of the organization which have already been gathered are kept in some physical medium such as a paper form or entering it directly into computer system. 2. **Processing data**: After storing the data, the next important function of MIS is to process the same. In the processing, the data are converted to require management information, calculating company, sorting, classifying and summarizing etc. are the necessary activities to be done for processing the data. 3. **Storage of information**: Under the MIS, necessary data and information are carefully stored, so that it can save time for searching the same. Generally, data and information are stored by reserving and organizing them in the form of files, records and databases for future use 4. **Retrieval of information**: Another function of MIS is to retrieve the information to meet the exact management information demands. So retrieval should be done as per the requirement of the management users. 5. **Disseminating**: Disseminating is the last function or finished product of MIS. By disseminating the data and information are divided and distributed to the users in an organization. This can be done through reports or outline through computer terminals periodically. **Components of MIS and their relationship** A management information system is made up of five major components namely people, business processes, data, hardware, and software. All of these components must work together to achieve business objects. the day to day business transactions. The users are usually qualified professionals such as accountants, human resource managers, etc. The ICT department usually has the support staff who ensure that the system is running properly. the users and all other components on how to work efficiently. Business procedures are developed by the people i.e. users, consultants, etc. is collected from activities such as deposits, withdrawals, etc. devices, etc. The hardware provides the computing power for processing data. It also provides networking and printing capabilities. The hardware speeds up the processing of data into information. broken down into two major categories namely system software and applications software. System software refers to the operating system i.e. Windows, Mac OS, and Ubuntu, etc. Applications software refers to specialized software for accomplishing business tasks such as a Payroll program, banking system, point of sale system, etc. ##### ##### Role of Information in an Organization In addition to the general function of improving knowledge, information assists management in several ways including: - **The reduction of uncertainty:** uncertainty exists where there is less than perfect knowledge. Rarely, if ever, is there perfect knowledge but relevant information helps to reduce the unknown. This is particularly relevant in planning and decision making. - **As an aid to monitoring and control**: by providing information about performance and the extent of deviations from planned levels of performance, management is better able to control operation. - **As a means of communication**: managers need to know about developments, plans, forecasts, and impending changes and so on. - **As a memory supplement**: by having historical information about performance, transactions, results of past actions and decisions available for reference, personal memories are supplemented. - **As an aid to simplification**: by reducing uncertainty and enhancing understanding, problems and situations are simplified and become more manageable. ##### ##### Characteristics of good Management Information System ##### The purpose of a management information system is to help executives of an organization make decisions that advance the organization\'s goals. An effective MIS assembles data available from company operations, external inputs and past activities into information that shows what the company has achieved in key areas of interest, and what is required for further progress. The most important characteristics of an MIS are those that give decision-makers confidence that their actions will have the desired consequences. ***Relevance*** The information a manager receives from an MIS has to relate to the decisions the manager has to make. An effective MIS takes data that originates in the areas of activity that concern the manager at any given time, and organizes it into forms that are meaningful for making decisions. If a manager has to make pricing decisions, for example, an MIS may take sales data from the past five years, and display sales volume and profit projections for various pricing scenarios. ***Accuracy*** A key measure of the effectiveness of an MIS is the accuracy and reliability of its information. The accuracy of the data it uses and the calculations it applies determine the effectiveness of the resulting information. The sources of the data determine whether the information is reliable. Historical performance is often part of the input for an MIS, and also serves as a good measure of the accuracy and reliability of its output. ***Usefulness*** The information a manager receives from an MIS may be relevant and accurate, but it is only useful if it helps him with the particular decisions he has to make. For example, if a manager has to make decisions on which employees to cut due to staff reductions, information on resulting cost savings is relevant, but information on the performance of the employees in question is more useful. The MIS has to make useful information easily accessible. ***Timeliness*** MIS output must be current. Management has to make decisions about the future of the organization based on data from the present, even when evaluating trends. The more recent the data, the more these decisions will reflect present reality and correctly anticipate their effects on the company. When the collection and processing of data delays its availability, the MIS must take into consideration its potential inaccuracies due to age and present the resulting information accordingly, with possible ranges of error. ***Completeness*** An effective MIS presents all the most relevant and useful information for a particular decision. If some information is not available due to missing data, it highlights the gaps and either displays possible scenarios or presents possible consequences resulting from the missing data. Management can either add the missing data or make the appropriate decisions aware of the missing information. An incomplete or partial presentation of information can lead to decisions that don\'t have the anticipated effects. **Approaches to system classification** There are two broad categories. a. **The pre-specific processing of day to day transactions** ,known as data b. **The use of computers by the end --users themselves**.They include Both produce management information. The key difference is that the pre specified systems supply pre- determined outputs and reports so there is less flexibility. This means that great care must be taken in analyzing and determining management's real information.On the other hand, with the end user computing there is more flexibility and interaction so that the emphasis becomes one of supporting the end user rather than the production of a specified report. **Information systems can be classified by:** ##### (a) Organizational level Supported That is, information systems that support managers at different levels of the organization. This classifies IS as transaction processing systems (TPS, to support operational level), management information systems (MIS, to support middle/tactical level), and Executive information system (EIS, to support the senior level management). ##### (b) Functional area supported These are information systems that support operations and management of different functions within an organization. They include: financial management systems, human resource management systems, marketing management systems etc. ##### Support provided. They are classified according to the support they provide. They include: - Data processing systems/transaction processing systems - Management information systems - Executive information systems ##### Management activity supported ##### Executive Support System (ESS) ##### **APPROACHES TO INFORMATION SYSTEMS** ##### Social-technical Systems ##### The socio-technical view of organizations was developed by Trist and the Tavistock Institute and arose from consideration that any production system requires both a technological organization, i.e. the equipment, processes, methods, etc. and a work organization relating to those who carry out the necessary tasks to each other, i.e. the social system. Based on this view an organization is not just a technical or social system but is the structuring of human activities round various technologies. The technologies involved determine the technical sub-systems and vary widely. Consider, for example, the differing skills, procedures, machinery, equipment and the layout of facilities required in an electronics company, a car manufacturer, a hospital or a computer bureau. In addition to the technical sub-system, every organization has a social subsystem which consists of the aspirations, expectations, interactions and value systems of the members. The two sub-systems - the technical and the social -cannot be looked at separately but must both be considered as interrelating within the organization. Socio-technical theory suggests that the organization consists of four interrelated elements - tasks, people, structure and technology as shown in Figure below: More traditional approaches to Organizations and their problems have tended to concentrate on one or other of the sub-systems with little or no recognition of the other. Social-Technical View of IS ###### **Contemporary Approaches to Information Systems** The study of information systems deals with issues and insights contributed from technical and behavioral disciplines. **The technical approach** emphasizes mathematically based, normative models to study information systems, as well as the physical technology and formal capabilities of these systems. The behavioral approach, a growing part of the information systems field, does not ignore technology, but tends to focus on non-technical solutions concentrating instead on changes in attitudes, management and organizational policy, and behavior. MIS combines the work of computer science, management science, and operations research with a practical orientation toward developing system solutions to real-world problems and managing information technology resources. It is also concerned with **behavioral issues** surrounding the development, use, and impact of information systems, which are typically discussed in the fields of sociology, economics, and psychology **In the sociotechnical view of systems,** optimal organizational performance is achieved by jointly optimizing both the social and technical systems used in production. Adopting a sociotechnical systems perspective helps to avoid a purely technological approach to information systems. Technology must be changed and designed, sometimes even \"de-optimized,\" to fit organizational and individual needs. Organizations and individuals must also be changed through training, learning, and planned organizational change to allow technology to operate and prosper. Information systems are sociotechnical systems. Although they are composed of machines, devices, and \"hard\" physical technology, they require substantial social, organizational, and intellectual investments to make them work properly. Since problems with information systems---and their solutions---are rarely all technical or behavioral, a multidisciplinary approach is needed. In a sociotechnical perspective, the performance of a system is optimized when both the technology and the organization mutually adjust to one another until a satisfactory fit is obtained. **System Approach or System Theory** The systems approach is a method or framework which helps us to analyze and explore the operation and interactions which exist in the systems around us. In other words; this is an approach to problem solving e.g. trying to structure an organization or analyze an information system. It involves trying to establish the objectives of the system through considering the relationship with its environment, identifying its component and the interaction features of the system., summarized, aggregated, abstracted. #### **ORGANIZATION'S STRUCTURE, CUTLURE AND CHANGE** These are 4 basic forms of organization structure: - 1. **Hierarchy of Authority** This is illustrated as a pyramid. In this structure each position has authority commonly associated with it and a span of control. (These are the number of subordinates working under a particular authority). This may be narrow or wide giving raise to Tall and Flat structure. TALL FLAT 2. **Specialization** This is the division of labor in an organization. Its usually based on the different functions such as marketing, accounting, production and distribution. Sales & marketing Production Distribution Accounts manager Manager ------------------- ------------ -------------- ------------------ --------- Manager Manager 3. **Formulation:** Extent to which rules and procedures exist to handle organizational activities. An indication of formalization is the extent to which decisions can be programmed. 4. **Centralization**: This refers to the organizational structure where decision making occurs either at the top level or low level. Organization culture can be perceived as:- 1. Either using High technology or low technology. 2. Either a price leader or a price follower. 3. Produce high quality or low quality goods. 4. They are industry innovators or imitators. 5. Either selective marketer or mass marketers. 6. Risk takers or risk evaders.