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Chapter 2- various concepts of MIS

Chapter 2- various concepts of MIS



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Published by: ridhimaamit on Aug 03, 2009
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Chapter 2: BASICS OF MIS
Management information Systems (MIS) is the discipline covering the application of  people, technologies, and procedures — collectively called information systems — tosolving business problems. Management Information Systems are distinct from regular information systems in that they are used to analyze other information systems applied inoperational activities in the organization. Academically, the term is commonly used torefer to the group of information management methods tied to the automation or supportof human decision making. There are many elements toManagement Information Systems(MIS) which include:
- The data input to the system must be as accurate as it can be, subject to itscosts and timescales for capture. It should then be stored in the most logical way.This often differs from how the data is input. The data then needs to besummarized to create information in a way that best meets the needs of thesystems users - this may not necessarily be the most logical way or the easiest or cheapest for the IT team.
- People are involved both in capturing the data and in exploiting theinformation. It is important to motivate those who capture the data by highlightingthe value that the exploited data brings to the organization.
- In a small organization, the MIS may run on just the sales or financedirector’s PC. In larger businesses, it usually runs on a server, shared or dedicated,with Internet or intranet access for those who need it. It is unusual to requirespecialized software.
- the simplest MIS can be built using standard software. However, mostMIS use specialized software, which has the most common features of an MISalready built in. The developer configures this by describing the database and itsstructure, where the data comes from, how to summarize the data and whatstandard queries will be required. The cost of this software varies widely. Thecheapest offers limited functions for one PC. The most expensive is highlyfunctional, providing high performance and many features for hundreds or thousands of users and vast amounts of data.Without these things effective MIS system would be forfeit to many problems, includingInformation flaws, which if exploited and proved to be wrong could bring about harshfines from publishing false information (fraud).
The word decision is derived from the Latin root decido, meaning to cut off.The concept of decision, therefore, is settlement, a fixed intention bringing to a
conclusive result, a judgment, and a resolution. A decision is the choice out of several options made by the decision maker to achieve some objective in a given situation.Business decisions are those, which are made in the process of conducting business to achieve its objectives in a given environment. In concept, whether we aretalking about business decisions or any other decision, we assume that the decisionmaker is a rational person who would decide, with due regard to the rationality indecision making.
Decision making
can be regarded as an outcome of mental processes (cognitive process)leading to the selection of a course of action among several alternatives. Every decisionmaking process produces a final choice. The output can be an action or an opinion of choice.Human performance in decision making terms has been the subject of active researchfrom several perspectives.
From a psychological perspective, it is necessary toexamine individual decisions in the context of a set of needs, preferences anindividual has and values they seek. From a cognitive perspective, the decisionmaking process must be regarded as a continuous process integrated in theinteraction with the environment. From a normative perspective, the analysis of individual decisions is concerned with the logic of decision making and rationalityand the invariant choice it leads to
.Yet, at another level, it might be regarded as a problem solving activity which isterminated when a satisfactory solution is found.
Therefore, decision making is areasoning or emotional process which can berationalor irrational, can be based on explicit assumptions ortacit assumptions.
Logical decision making is an important part of all science-based professions, wherespecialists apply their knowledgein a given area to making informed decisions. Someresearch shows, however, that in situations with higher time pressure, higher stakes, or increased ambiguities, experts use intuitive decision making rather than structuredapproaches.
The major characteristics of the business decision making are:
(a) Sequential in nature.(b) Exceedingly complex due to risks and trade offs.(c) Influenced by personal vales(d) Made in institutional settings and business environment.
. The business decision making is sequential in nature. In business, the decisions are notisolated events. Each of them has a relation to some other decision or situation. Thedecision may appear as a “snap” decision but it is made only after a long chain of developments and a series of related earlier decision.
The decision making process is a complex process in the higher hierarchy of management. The complexity is the result of many factors, such as the inter-relationshipamong the experts or decision makers, a job responsibility, a question of feasibility, thecodes of morals and ethics, and a probable impact on business.
The personal values of the decision maker play a major role in decision making. Adecision otherwise being very sound on the business principle and economic rationalitymay be rejected on the basis of the personal values, which are defeated if such a decisionis implemented. The culture, the discipline and the individual’s commitment to the goalswill decide the process and success of the decision.
Whatever may be the situation, if one analyses the factors underlying the decisionmaking process, it would be observed that there are common characteristics in each of them. There is a definite method of arriving at a decision: and it can be put in the form of decision process model. 
The decision making process requires creativity, imagination and a deepunderstanding of human behavior. The process covers a number of tangible andintangible factors affecting the decision process. It also requires a foresight topredict the post-decision implications and a willingness to face those implications.All decisions solve a problem but over a period of time they give rise to a number of other problems.
Rational Decision Making
A rational decision is the one which, effectively and efficiently, ensures theachievement of the goal for which the decision is made. If it is raining, it is rational tolook for a cover so that you do not get wet. If you are in business and want to make profit, then you must produce goods and sell them at a price higher than the cost of  production. In reality, there is no right or wrong decision but a rational or an irrationaldecision. The quality of decision making is to be judged on the rationality and notnecessarily on the result it produces. The rationality of the decision made is not the samein every situation. It will vary with the organization, the situation and the individual’sview of the business situation. The rationality, therefore, is a multi-dimensional concept.For example, the business decisions in a private organization and a Public Sector Undertaking differ under the head of rationality. The reason for this difference inrationality is the different objectives of the decision makers. Any business decision if asked to be reviewed by a share-holder, a consumer, an employee, a supplier and a socialscientist, will result in a different criticism with reference to their individual rationality.This is because each one of them will view the situation in different contexts and themotive with the different objectives. Hence, whether a decision is right or wrong dependson a specific rational view.Simon Herbert differentiates among the types of rationality. A decision, in a givensituation is:

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