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1. 2. 3. 4. 5. Introduction Role and Importance Of Management Process of Management Organisation Structure and Theory Strategic Management of Business Exercises
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Introduction 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 present it in the for 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 ka 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
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the user of the in formation 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’s 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 concept of MIS gives high regard to the individual and his ability to use information. An MIS gives information through data analysis. While analyzing the data, it relies on many academic disciplines. These include the theories, principles and concepts from the Management Science, Psychology and Human Behavior, making the MID more effective and useful. These academic disciplines are used in designing the MIS, evolving the decision support tools for modeling and decision - making. The foundation of MIS is the principles of management and if its practices. MIS uses the concept of management Information System can be evolved for a specific objective if it is evolved after systematic planning and design. It calls for an analysis of a business, management views and policies, organization culture and the culture and the management style. The information should be generated in this setting and must be useful in managing the business. This is possible only when it in conceptualized as system with an appropriate design. The MIS, therefore, relies heavily on the systems theory offers solutions to handle the complex situations of the input and output flows. It uses theories of communication which helps to evolve a system design capable of handling data inputs, process, and outputs with the lest possible noise or distortion in transmitting the information form a source to a destination. It uses the principles of system Design, Viz., an ability of continuous adjustment or correction in the system in line with the environmental change in which the MIS operates. Such a design help to keep the MIS tuned with the business managements needs of the organization. The concept, therefore, is a blend of principle, theories and practices of the Management, Information and System giving rise to single product known as Management Information System (MIS). The conceptual view of the MIS is shown as a pyramid in Fig.1.1. The Physical view of the MIS can be seen as assembly of several subsystems based on the databases in the organization. These subsystems range from data collection, transaction processing and validating, processing, analyzing and storing the information in databases. The subsystem could be at a functional level or a corporate level. The information is evolved through them for a functional or a department management and it provides the information for the management of business at the corporate level. The physical view of the MIS can be shown as in Fig.1.2. The MIS is a product of a multi- disciplinary approach to the business management. It is a product which needs to be kept under a constant review and modification to meet the corporate needs of the information. It is prescribed product design for the organization. The MIS differs since the people in two organizations involved in the same business. The MIS is for the people in the organization. The MIS model may be the same but it differs greatly in the contents. The MIS, therefore, is a dynamic concept subject to change, time and again, with a change in the business management process. It continuously interacts with the internal and the external environment of the business and provides a corrective mechanism in the
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4. the Computer. is a dynamic design. a major portion of the time goes in data collection. In any organization. the MIS is a system to support the decision making function in the organization. Hence.USA . small or big.2 MIS DEFINITION The Management Information System (MIS) is a concept of the last decade or two. Every 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. documenting it to the people.e. 1. it has no pdfMachine . processing. all of them converge on one single point. the information is people-oriented and it varies with the nature of the people 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. The difficulty in handling this multiple requirement of the people is due to a couple of reasons. 1. The MIS is defined as an integrated system of man and machine for providing the information to support the operations. However. Thought there are a number of definitions. 2. The information is a processed product to fulfill an imprecise need of the people. therefore. The MIS has more than one definition.. It has been understood and described in a number ways. The MIS model of the organization changes over a time as the business passes through several phases of developmental growth cycle. in today’s world MIS a computerized . therefore.based information System. the primary objectively. Every individual in an organization is continuously looking for some information which is needed to perform his/her task. the management and the decision making function in the organization. It is also known as the Information System. The MIS is defined as a system which provides information support for decision making in the organization. is a dynamic design the primary objective of which is to the information the information for decision making and it is developed considering the organizational fabric.system so that the change needs of information are with effectively. It supports the management of the business in each phase by giving the information which is crucial in that phase. The MIS. i. some of which are give below. a major portion of the overheads goes into this kind of unproductive work in the organization. It takes time to search the data and may require a difficult processing path. The MIS.Sarras . It has a time value and unless processed on time and communicated. The difference lies in defining the elements of the MIS. Hence.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.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. giving due regard to the people in the organizational the management functions and the managerial and the managerial control. the Information and Decision System. The MIS is defined as a Computer – based Information System.
the status of a particular record and references on a variety of documents. it is necessary to have a formal system which should take care of the following points: ! Handling of a voluminous data. The MIS satisfies the diverse needs through a variety of systems such as Query Systems. Since a human error is difficult to control.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. scheduling and control. processed. accuracy. ! Mass storage. Management Control. ! Communication of the information system to the user on time. ! Fulfilling the changing needs of the information. Analysis Systems. timeliness and meeting the decision making needs. The management information system uses computers and communication technology to deal with these points of supreme importance. The heart works faster and supplies more blood when needed.Sarras . ! Confirmation of the validity of data and transaction. It fulfills the needs of blood supply to human body in normal course and also in crisis. The MIS helps the junior management personnel by providing the operational data for planning. a group of individuals. Modeling Systems and Decision Support Systems the MIS helps in Strategic Planning. In order to get a better grip on the activity of information processing. validity. 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.USA . ! Complex processing of data and multidimensional analysis. In the body the heart plays the role of supplying pure blood to all the elements of the body including the brain. Operational Control and Transaction Processing. It regulates and controls the incoming impure blood. ! Quick search and retrieval. The system is expected to fulfill the information needs of an individual. the difficulty arises in ensuring a hundred per cent quality assurance of information in terms of completeness. processes it and sends it to the destination in the quantity needed. The MIS helps the clerical personnel in the transaction processing and answers their queries on the data pertaining to the transaction.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. 1. The MIS plays exactly the same role in the organization. The information is the blood and MIS is the heart. the management functionaries: the managers and the top management. and sent further to all the needy destinations. The system ensures that an appropriate data is collected from the various sources. a human error is possible in conducting the same.value. Since the people are instrumental in any business transaction. and helps them further in decision making at the operations level to correct an out of pdfMachine .
It improves the decision making ability considerably. managers are informed about the progress.term perspective planning. 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 begins with the definition of a data entity and its attributes. administration and operations of an organization. The MIS calls for a systemization of the business operation for an affective system design. relieving the human mind for better work.4 IMPACT OF THE MANAGEMENT INFORMATION SYSTEM Since the MIS plays a very important role in the organization. The fund of information motivates an enlightened manger to use a variety of tools of the management. strategic planning and evolving the business plans and their implementation. It helps him to resort to such exercises as experimentation and modeling. finance. the management of marking. The ready-made packages make this task simpler. achievements and shortfalls in the probable trends in the various aspects of business.control situation. With a good support. plays a vita role in the management.Sarras . the drudgery of the clerical work is transferred to the computerized system. saving the manager’s valuable time. The impact is on the managerial ability to perform. A well designed system with a focus on the manger makes an impact on the managerial efficiency. communication. This helps in forecasting and long. The MIS helps the top management in goal setting. The tracking and monitoring of the functional targets becomes easy. The MIS creates another impact in the organization which relates to the understanding of the business itself. it creates an impact on the organization’s functions. The information is available in such a form that it can be used straight away or by blending analysis. The impact of MIS on the functions is in its management. It will be observed that a lot of manpower pdfMachine . problem identification and helps in the process of decision making. therefore. 1. designed for information generation in the organization. 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. production and personnel become more efficient. performance and productivity. It uses a dictionary if data. Since the MIS works on the basic systems such as transaction processing and databases. respectively. entity and attributes. 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 functional. The manager’s attention is brought to a situation which is exceptional in nature.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.USA . The use of computers enables him to use the tools techniques which are impossible to use manually. The MIS plays the role of information generation. The MIS. Since all the information system use the dictionary.
a computer system is available for such a requirement. The ability of a computer system to provide security of data brings a confidence in the management in the storage o data on a magnetic media in an impersonal mode. an efficient language is available to handle the situation. The software is available to handle the procedural and nonprocedural data processing. The computer system being able to configure to the specific needs helps to design a flexible MIS.USA . The MIS has a direct impact on this overhead. The ability of the computer to sort and merge helps to organize the data in a particular manner and process it for complex lengthy computations. its storage and access effectively. Hence. This is a large overhead in the organization. The variety of the hardware having distinct capabilities makes it possible to design the MIS for a specific situation. then the computer system can be hooked through a satellite communication system. The advancement in computers and the communication technology has the distance. an infeasible proposition unless computers are used. word image. Since the computer is capable of digital.is engaged in this activity in the organization. and then send the information to various location. thereby saving a lot of drudgery of development and maintenance pdfMachine .5 MANAGEMENT INFORMATION SYSTEM AND COMPTER Translating the real concept of the MIS into reality is technically. The computer system provides the facilities such as READ ONLY where you cannot delete to UPDATE. you can compute the results at one place and transfer them to a computer located at another place for some other use. designing the MIS for a specific need and simultaneously designing a flexible and open system becomes possible. The confidence nature of the data and information can be maintained in a computer system. For example.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. If the distance is too long. speed. The ability of the hardware to store data and process it at a very fast rate helps to deal with the data volumes. It provides an access to the selected information through a password and layered access facilities. voice and text processing. The software. 1. If you are not use a formula but have to resort every time to a new procedure. The software is available to transfer the data from one computer system to another. The MIS relies heavily on the hardware and software capacity of the computer and its ability to process. It creates an information.based work culture in the organization.Sarras . retrieve communicate with no serious limitations. It you study the individual’s time utilization and its application. processing and communication. the nonprocedural languages are available. an integral part of a computer system. you will find that seventy per cent of the time is spent in recording. graphic. if you want to use a formula to calculate a certain result. For example. it is possible to have a computer system with a distributed data processing capability. further enhances the hardware capability. Hence. searching. process. the MIS become a safe application in the organization. Suppose the organization has multiple business location at long distances and if the need is to bring the data at one place. With this ability. volume and complex computing an easy task. it is exploited to generate information and present it in the form which is easy to understand for the information user. if the organization needs a large database and very little processing.
network and relational database have roots in the mathematics and the set theory. techniques. making information processing a personalized function. methods. and accounting. The MIS is based on database structures. mathematics. attention is paid to avoid noise and distortions in the communication process. It uses the principles of double entry bookkeeping for balancing the accounts. It uses the accounting methodology for generating a trial balance sheet and other books of accounts. Psychology. The foundation of MIS is the management theory. It uses the principles and practices of management while designing the system. It gives due regard to the personal factors such as bias. the application of the management principles and practices in today’s complex business world is possible only when the MIS is based on computer system support. rules and principles from pure and application science. It uses different mathematical techniques to handle the situation of decision making uses the method of decision. While designing the report format and forming communication channels. The network theory is used for planning and controlling large projects.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The MIS draws data from its own source and uses it in the application of a variety of tools and techniques to solve the management.hierarchical. The principle of feedback is used while designing analysis.making or decision. viz . and resource programming are used in the MIS as decision support systems. communication theory. The concept of user – friendly systems and the end user computing is possible. While designing the report format.6 MANAGEMENT INFORMATION SYSTEM AND ACADEMICS The management’s information system draws a lot of support from other academic disciplines too.and maintenance of the system.USA . thinking with a fixed frame of reference. The MIS becomes rich in content and more useful when it becomes more and more a decision. MIS takes into account the behavior of the manager as an individual and in a group. The MIS further relies heavily on the decision methodology. Another area of academics is operational research. The inventory control.making and action.support system. risk aversion. It considers the human mind as a processor of information. strengths and weaknesses. operations pdfMachine . it uses the accounting principles to ensure that the data is correct and valid. However. In the area of accounting application.Sarras . ant gives due regard to the theory of organizational behavior. The is possible when it builds decision making systems in MIS which in turn is possible if it draws tools. and use them as an integral part of the system. The operational research is used for developing the models of management and they are then incorporated in the MIS as decision support systems. 1. The MIS uses the communication theory in a significant manner. Systems. queuing theory.making under certainty for decision. The application of PER / CPM to a project planning is now easily possible through the MIS support.
Sarras . An assistant has the task of collecting and organizing the data. this negative impact can be handled with proper training and counseling. make a statement and submit it to the higher level. the work vacuum. an officer. collection. His management role expands beyond his management function. The MIS caters to his constant changing needs of information. is a sense of insecurity.7 MIS AND THE USER Every person in the organization is a user of the MIS. in reality the impact created on individuals by MIS is difficult to explain. A typical user is a clerk. methods. thus creating a sense of insecurity. The nature of the impact in a few cases is negative. 1. The MIS provides facilities to analyze the data and offers the decision support systems to perform the task of execution. The main task of a clerk is to search the data. so created is not easily filled. As the MIS takes away the drudgery of search. The manager has a position of responsibility and accountability for the business results. A clerk can use the MIS for a quick search and reporting the same to higher level. Each of them has a specific task and a role to play in the management of business. The MIS provides an action – oriented information. The people in the organization operate at all levels in the hierarchy. and decision – support systems in designing business application. writing and reporting the data. An executive plays the role of a decision maker. an assistant. It is observed that at lower level. The MIS offers the methods and facilities to integrate the data and report the same in a proper format. He is a strategist and a long-term planner. However.USA .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.research and probability theory for building processes. He is responsible for achieving the target and goals of the organization. and conducting a rudimentary analysis of integrating the data from different and disciplines to analyze it and make a critical comment if anything adverse is found. pdfMachine . The MIS provides information in a structured or unstructured format for him to react. He is a person with a foresight. The user of the MIS is expected to be a rational person and the design of the MIS is based on this assumption. an analytical ability and is expected to use these abilities in the functions of top management. He is in of responsibility and accountability a position of a planner and a decision maker. giving rise to a fear of non-recognition in the organization. an executive or a manager. The MIS caters to the needs of all persons. However. To some extent the importance of the person is also lost.
The risk of adverse exposure to the higher management also increases. This leads to a situation where he is afraid that that his position. It analyses the data in a predetermined manner. and the ability to access the data stored at different locations on the variety hardware of platforms would make MIS more attractive and efficient proposition. Through the MIS. Managers. are able to handle the complex situations with relative ease. having improved their decision – making ability. A good MIS also makes an organization seamless by removing all the communication barriers. This change arising out of the MIS creates a sense of being neglected for knowledge. pdfMachine .At the level of an officer and an executive. The psychological impact is larger if the person is not able to cope up with this change by expanding or enriching the job and the position held by him. Web etc. The MIS makes these competitors more effective as they have access to the information and have an ability to interpret.Sarras . The enterprising managers are able to use the systems and the models for trying out a Number of alternatives in a given problem situation. The recent major technological advances in communication such as Multimedia. The time and energy which was spent earlier in unproductive work is now applied for a productive work. decision and defense will be challenged and may be proved wrong sometime. Some are able to use their analytical skills and knowledge with the in formation support for improving their position in the organization. Some are benefited by improving their performance and being held in high esteem by the higher management. The effects so far pointed out are all negative and they are seen only in few cases. The impact of the MIS on people Of the organization is phenomenal as it has made the same body of people collectively more effective and productive. since his manipulative capability is considerably increased.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. with the information now being available on his desktop. Internet. Graphical User Interfaces (GUI). the information can be used as a strategic weapon to counter the threats to business. make business more competitive. An intelligent user of information can demonstrate the ability of decision making. information and advice. The positive effects on the individuals at all levels are that they have become more effective operators. Imaging.USA . the MIS does the job the of data manipulation and integration. This means that the knowledge of business is transferred from an individual to the MIS and is made available to all in the organization. and bring about the organizational transformation through integration. The manager holding a position in the top or middle management suffers from fear of challenge and exposure.
is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.USA .REVIEV QUESTIONS 1) What is the scope of information system and Management Information system? 2) Give three reasons for using computer for MIS in the organization? 3) Designing an MIS for an organization? 4) Can you think of an MIS which could be user independent and business dependent? 5) State the difference between MIS and a computer system. Discuss. 10) Why is MIS looked upon as a strategic need of management today? pdfMachine .Sarras . 9) If application science and MIS can be brought together. 6) Take an organization of your knowledge and give a conceptual view of MIS and physical view of MIS. the MIS design would be realistic and useful. 7) State which capabilities of a computer are used in MIS to create an impact. 8) Identify the nature of impact of MIS on people. organization and the management style.
The system are subject to entropy. A system is a comprehensive assembly of parts becoming an organization to achieve the stated goals. constraints and their interaction with one another. i. techniques and skills while executing the management process of planning. staffing.e. described and understood by the boundaries within which it performs. The key concepts of the system theory used in the management are as follows: 1. i. the tendency to “ run down”. Closed systems suffer from entropy as they are cut off from the environment.CHAPTER-2 Role and Importance of Management 2. an informational input about the state of the system. Systems try to remain in an equilibrium or a steady state by taking recourse to corrective action. A system is defined. An effective way of handling this process is to treat the organization as a system. conflict of time. 5. 2. A system is called OPEN if it has interaction with the environment and CLOSED if it not have an interaction with the environment. while open systems interact with the environment and draw upon the support of resources to maintain a given condition. coordinating and controlling. 4. organizing.. The management process involves a continuous resolution of conflicts of one kind or the other which affects the achievement of goals. a manager comes across human conflict. This is possible when the system has its own feedback. It force pdfMachine . between alternative resources. The manager uses a variety of tools. Whether management is an art or a science is a very subjective question.1 INRODUCTION TO MANAGEMENT Management as defined by Mary Follett is “the art of getting things done through people” A manger is defined as a person who achieves the organization’s goals by motivating others to perform – not by performing himself. conflict of approach or method and the conflict of choice..is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. a manager uses human skills. material resources and scientific methods to perform all the activities leading to the achievement of goals. staffing. 3.e. The advantage of viewing the management as a system is that it enables us to see the critical variables. In the process of management.Sarras . coordinating and controlling the efforts of the members of the organization to achieve common stated goals of the organization. In the management of any activity.USA .. But it can be said without doubt that modern management in the environment of technology is becoming more of a science than an art. The result – oriented management approaches the problem of management through the system view of the organization. organizing. conflict of goals. We define management for the purpose of Management information Systems as the process of planning.
The manager must have a knowledge of management theory and principle as the skill to use them in a particular environment. 2. He evolved the principles of operational management. The Principles of Scientific Management. 1911. Sir Isaac Pitman and Sons Ltd. London. The application of management principles in an environment.USA . Frank and Lillian Gilberth are the disciples of Taylor. 1949. rather than chaotic individualism.Sarras . is the accepted practice of management. General and Industrial Management. pdfMachine . translated by Constance Storrs. The process of management explained earlier consists of steps which are relationally linked and locked with each other. Chester Barnard and Alvin Brown is very much essential. and so on. Car George Barth. Work for a maximum output . commercial. The understanding of the basic principle of management theory evolved the scholars Henri Fayol. recognizing the specific situation. In the context of the MIS. Broken into operational functions such as technical. is recognized as the father of scientific management. the systems approach to management is the most efficient one. ** Henri Fayol. Develop all workers to the possible potential for their own highest possible prosperity. 2.1. Harper. Deviating from the principle to honour the situation and at the same time not diluting the management principle is the managerial skill. Achieve cooperation of human beings. Fayol is of the view that all the activities of an industrial or a business or a business undertaking can be ____________ * F W Taylor.the manager to look at the situation in such a way that due regard is given to the consequences arising out of interaction with the related element or subjects. 4. New York.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. These are as given in Table 2. Henry L Gantt. who promoted the thought of the scientific management. The French industrialist Henri Fayol** promoted the theory of operational management.2 APPROACHES TO MANAGEMENT Frederick W Taylor*. 3. Replace the rules of thump with scientific rules. accounting. security. financial. Obtain a harmony in group action. 5. His principles can be summarised as follows : 1.
Sarras . Mayo Elton are the scholars who thought that productivity can be improved through the social factors as morale and satisfactory relation between the members of work group.1 Principles of Operational Management Principle Comments Division of work Efficient handling of work. Orderly arrangement of men. Centralisation Overgeneralization is unproductive. therefore. organizing.USA . commanding. During the same period when Taylor.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Corporate interest Should be fair for maximum satisfaction. counseling. Chain of authority vested into the people should not be Scalar chains short-circuited. another group of scholars was concentrating on industrial psychology and social theory as the basis for the scientific management. regulations. He believed that the operational management would succeed through the elements of management. motivating. norms and priorities. viz. Remuneration Authority should be centralized just enough for control. Initiative sacrificing personal vanity of the superior.Table 2. It is necessary to ensure that the turnover of people is Stability of tenure controlled for stability. Vilfredo Pareto. Lyndall Urwick are credited to evolve the management with a focus on the personal management. Unity of command Single source directed towards one objective. coordinating and controlling. material and other Order resources is necessary. Fayol and others were concentrating on the scientific management. The initiative of subordinates should be encouraged. The cooperation increases with pdfMachine . Hawthorne’s studies brought out the theory that man is a “Social Animal” operating in the socio – technical system and. Subordinates should be dealt with kindliness and justice Equity to elicit loyalty and devotion. they cooperate in the work environment. Max Weber. the emphasis in effective management is on behavioral sciences. and an effective management is possible only if human behavior and group behavior is managed through the interpersonal skills. Discipline Adherence to rules. Rountree. leading and communication. Robert Owen. Barnard said that due to the physical and biological limitations of individuals. Subordination of individual Ignore the individual interests for overall betterment of to the organization. Unity of direction Efforts should be directed towards one objective. Authority and responsibility Pinpoints accountability. Fayol regarded the elements of management as planning. Chester Barnard advocated the theory od system as an approach to the management.
Building a meaningful effective structure of authority and the relationship is known as organizing. and taking corrective actions.USA . These activities are called as tasks and not as functions. The essence of the process is decision making as there are a number of alternatives in each of these factors. It specifies an authority structure and assigns activities to the people backed by the delegation of authority. It requires appropriate selection of the person or persons ensuring that they together will achieve the goals and objectives of the organization. necessary to undertake centrally a process of coordinating and reconciling the differences in the approach. therefore. It is a process of synchronizing individual actions and the efforts which may differ because of the differences in the personal goals and the common goals. the systems scientists and the practicing managers.Sarras . comparing it with the goals. He father said that a groups of peoples in the system work as an organization is looked upon as a system of factions. are willing to contribute to group’s action. programmers and procedures for the achievement of these goals. This task is to be carried out by the authority placed at a higher level in the organization structure. a system of authority and a direction and a system of logical decision making. organization. purchasing. the behavioral scientists. 2. ! Planning is a process of determining the goals and objectives and evolving strategies policies. manufacturing. the objectives and the target. staffing. It is. clarify and solve the problems of the people and their activities. Organisation involves evolving the structure of the people working in the organization and their roles. the differences in the interpretation of methods and directions. a system of in a system of incentives. In the process. It requires defining the manpower needs per position or centre of activity. The activities that are performed through the managerial functions are planning. The emergence of the modern management thought is credited to the social scientists. It helps to evaluate the performance. It is necessary to distinguish between the task and the functions. etc. The essence of the control lies in good planning. Staffing involves manning the positions in the organization structure. and have a conscious common Purpose. the manger is required to guide. Controlling ensures an achievement of the plan. Directing is a complex task of implementing the process of management.effective and efficient incentives. This ! ! ! ! ! pdfMachine . It is necessary to motivate the people to work for the goal with an interest and a confidence. directing coordinating and controlling. Coordinating is the function which brings a harmony and smoothness in the various group activities and individual efforts directed towards the accomplishment of goals. if the output is falling short of the stated norms. selling. and guides a manager to take specific corrective actions.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. efforts and interests towards a common goal.3 FUNCTIONS OF THE MANAGER An individual who gets the thing done is a Manager. Controlling is a process of measurement of an output. He further said that the cooperation is more effective if the members of the group communicate with one another. While manager may perform the task such as accounting. highlights abnormal deviations. timing.
The capital required can be either from the internal sources or borrowed from the financial institutions. While performing these functions. The enterprise needs a long-term and a shortterm capital. productivity. The control is central to the managerial function. Government Department. The settlement of an agreement is based on the cost of living index. directly or indirectly. Labor The next important cost of a business is the cost of labor. the process of the management and a manager is required to meet these forces effectively. They affect. or any enterprise. Since it is proven that the external environment also has an impact on the business manager’s performance. the external environment is beyond his control.may call for a change of plan. labor. Economic Environment The economic environment comprises capital.USA . the industry wage standards. work in an environment in which the organization operates. fiscal and monetary policy and customers. a modification of methods. a hospital. the political and the ethical environment.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. the external environment is classified into five classes as the economic.Sarras . whether they are managing a business. For the purpose of discussion. a reallocation of resources. he resorts to the scientific approach to the management. price changes. These aspects are external to the organization and a manager has no control on them. There are a number of forces which are generated in the environment. While to some extent the internal environment is controllable. is planning and control of the business functions and operations. These forces may be from within or from outside the organization. the social. Hence management of the capital is an important aspect of the business. the availability of labor.4 MANAGERS AND THE ENVIRONMENT All managers. procedures and even the organization structure. therefore. it is necessary to know and understand the environment. etc. 2. The organization is forced to borrow for various reasons and the interest charged by the lending financial institutions forms the cost of the capital. Capital It is required to run the organization. The manager’s main function. which have an impact on the managerial performance. When a capital is borrowed. The cost of labor is determined every two three years by a union agreement. the technological. a school. it is borrowed at an interest. pdfMachine .
It requires changes in the product design and promotes new concepts. consumer goods industry. The price changes affect the cost of raw material and labor and on these changes a manager has no control. optics. Any change in technology changes the work culture. the desires. Technological Environment The technology has a major impact on the business. The manager has to respond quickly to the technological changes to save the business. The changes occur because of decrease in the demand and supply. and so on. the expectations. The change in the business orientation to suit the changes in the consumer demand is a difficult task for the manager. labor and technology.Price Changes Price changes occur in the economy for various reasons. Fiscal and Monetary Policy The Government announces fiscal policies and controls them. the changes in the consumer behavior.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. energy. Productivity Productivity is a result of the capital.Sarras . It affects the business prospects. A manager has a very little leverage to deal with these policy changes. Many a time’s an organization’s business are taken over by better technology. in the consumption pattern and the money supply. The customer does not show consistent preference to the product. Social Environment The social environment is built around the attitudes. the degree of intelligence and education. The costs are affected by the technology changes affecting the productivity. especially when the business operates in a buyer’s market. In a competitive world. It is not always possible to predict these changes well in advance in order to take any managerial action to meet the changed situation. the caste pdfMachine . the methods and the systems. The organization’s profit position is affected by these policies.USA . the religion. Examples of technological changes are seen in aviation. Customers The customers rule the business. These policies affect the credit terms. It generates new business opportunities. it is very difficult to predict the customer behavior. communication. electronics. medicines and manufacturing. The changes in the demands occur with growth and technology. the beliefs and customs. cuts down the profits and forces the management to change the course of the business operations. the price of the inputs and the money supply affecting the cash position of the organization. It affects the speed of the operations and gives a boost to the productivity of the production systems.
Business ethics is a set of norms which are universally accepted as a business behavior. the adherence to generally accepted standards of accounting and auditing. It is recognized that rural marketing is different from the urban marketing. the goals will not be achieved. organizing. some aspects of the business operations are left as ethics. such as an agricultural versus an industrial. They postulate the hypothesis that unless a control is exercised on the process.and creed of the people. They advocate a system of effective control to ensure the achievement of the business objectives. an investment in the service sector versus a core sector come about with change in the ruling political party and its policies. The changes in ruling party bring economic policy changes. pdfMachine .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.USA . 2. called the business ethics. All the steps prior to a control are necessary but are not necessarily self-assuring the results unless it is followed by a strong control mechanism. The social environments are built in centuries and hence it is deeply rooted in the society. The unstable political environment brings stagnancy in the business development. coordinating. and manipulate the consumer behavior. However. Introduction of computers in the service industry is still a difficult proposition. the business norms and codes on confidentiality. A number of such examples can be cited to prove that the social environment affects business and makes the manager’s task very difficult and challenging. Social factors create an attitude towards the work. affecting the business. are beyond the control of the manager. Political Environment The political factor is the most important factor which affects the business in Indian environment. an educational versus a basic research. It is well known that it took a lot of time to convince the farmers in India about the use of fertilizers. frozen foods are not finding consumer preferences. assess. The social environment has an important impact on the business and the organizational productivity. All these factors discussed so far. The management experts have viewed these steps as Management Control System. The government has enacted many laws and regulations to bring about harmonious operations in business. At best he can predict. The sect oral preferences.5 MANAGEMENT AS A CONTROL SYSTEM Planning. directing and controlling are the various Steps in a management process. generate the product choices.Sarras . Such changes have a long-term impact on business performance. The business ethics emerge from the professional conduct. Ethical Environment (Systems of a Moral Behavior) Some business problems arise due to failing on the ethical grounds. staffing. the payment and documentation. evaluate and take such actions which will help him to control the situation. The manager has to deal with such changes effectively. In spite of the technological advances.
down time. The control process measures a progress towards those goals. etc.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. to identify the deviations from the standards.USA . This systematic effort is undertaken through the management control system. This is a mechanism of predicting the possibility of achieving the goals and the standards before it is too late and allowing the manager to take corrective actions. The system should have meaningful standards relating to the work areas. inventory. Performance Standard The performance standard must be measurable and acceptable to all the organization. to design the information feedback systems. leading to the achievement of the stated common goals. quality.K. sale in a typical market segment and so. and managerial functions and so on. The management is a systematic effort to set the performance standards in line with the performance objectives. when achieved.Sarras . to correct the mistakes made by the people. rejections. A reliable and effective control system has the following features. Strategic Controls pdfMachine . The chain of standards. Corrective Action The control system is essential to meet the environmental changes discussed earlier. On.A definition of control is the process through which managers assure that actual activities conform to the planned activities. responsibility. to compare the actual performance with these predetermined standards. utilization of resources. Robert J Mockler defines and points out the essential elements of the control process.1. STD. Estabilsh Standards of Performance Measure Performance Actual vs. 2. will ensure an achievement of the goals of the organization. to measure its significance and to take corrective actions in case of significant deviations. to meet the complexity of today’s business. Not O. The basic steps of the control process are given in Fig. The operational management would have standards relating to the shift production. such as production. the management would have standards relating to the business performance. Early Warning Mechanism. and to effectively monitor the delegation process. and enables the manager to detect the deviations from the original plan in time to take corrective actions before it is too late. sales. Fro example.
pdfMachine . management methodology is the management by exception. a decision or a wait – and. standards to measure. Exception Principle The system should selectively approve some significant deviations from the performance standards on the principle of management by exception. Realistic The system should be realistic so that the cost of control is far less than the benefits.Sarras . a feedback mechanism and an action centre as elements of the system.USA . it continuously monitors the performance and sends the information to the control centre for action. Such attention would lead to an action. Several terms have been coined on this principle such as management by objectives. Feedback The control system would be effective. Sufficient incentive and rewards are to be provided to motivate the people. When the management operates under time constraint.In every business there are strategic areas of control knows as the critical success factors. It should not only highlight the progress but also the deviations.6 MANAGEMENT BY EXCEPTION Pareto’s principle of 80:20 applications to the management of enterprise. The standers are realistic and are believed as achievable. The system should recognize them and have controls instituted on them. 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.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. 2. each manager has to him to attend to the situation where his attention is necessary. They need to be properly evolved and instituted in the organization with due recognition to the internal and the external environment. Accurate and Timely The feedback should be accurate in terms of results and should be communicated on time for corrective action.see approach. A standard is control system has a set of objectives. The system as a whole should be flexible to be change with ease so that the impact of changed environment is handled effectively.
An efficient manager tries for selective attention to manage within the available time resource. The management by exception commands grip on the management process. or the process and the standard. the use of manpower by way of staffing and the manner in which the efforts are coordinated in the organization. methods. it is. The significant deviation can occur on account of wrong performance standards and wrong management process. necessary to assess whether the deviation is sporadic or consistently coming in. staffing. the application of the tools and the techniques. The deviation could be abnormal on a positive or on a negative side of the standard. The exception is decided the impact a situation would make on the performance. the MIS aids decision making. organization. The managerial effort gets directed towards the goal with the purpose of achievement. necessary to report the significant deviations to the right person in the organization. Table 2. directing. therefore. etc.If all the situations are considered in a routine manner. resources. the process and the standards set in the management control system. In this regard a manager himself has to provide the conditions of exceptions in the control system so that they are highlighted and informed. It is possible to trace the reasons of deviation. then the people fail to achieve them on account of de motivating factor of the high standards. calling for managerial attention. A manager is further interested in knowing the reasons behind the exceptional nature of the situation. therefore. IT is. and it is possible to take a corrective action. A wrong management process refers to a variety of decisions a manager has taken in the planning. The exception is defined as a significant deviation from the performance. without loss of time.7 MIS: A SUPPORT TO THE MANAGEMENT The management process is executed through a variety of decisions taken at each step of planning organizing. The deviation could be predictive or could be arising out of random causes in the business operations. it consumes time and tends to be neglected over a period of time.Sarras . For an efficient and an effective management.2 Decisions in Management Steps in management Planning Decision A selection from various alternatives. the methods of using resources. staffing.USA . The principle evolved. The significant deviations are exceptional in nature and require to be attended to immediately. therefore. is of the management by exception. 2. These decisions relate to the choice and the allocation of resources.strategies.2. As discussed in Chapter 1. The manager is interested in knowing the significant deviation by the yardsticks of consistency and not out of random causes. If the management is able to spell out the decisions required to taken in these steps are tabulated in Table 2.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. directing and controlling a given management task. coordinating and control. pdfMachine . Many times standards are set very low and they need to be looked in to avoid the misuse of resources. If the standards are set too high.
Unless the MIS becomes a management aid. the MIS is expected to support all the levels of the management in conducting the business operations. method.Organization Staffing Directing Coordinating Controlling A selection of a combination out of several combinations of the goals. Choice of the tools and the techniques for coordinating the efforts for optimum results. Since the decision making is not restricted to a particular level.USA . MANAGEMENT AND MANAGEMENT INFORMATION SYSTEMS Environment Management Goal Setting . people. resources.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Choosing a method from the various methods of directing the efforts in the organization. pdfMachine . It should help in such a way that the business goals are achieved in the most efficient manner.Sarras . Providing a proper manpower complement. it is not useful to the organization. Figure 2. A selection of the exceptional conditions and the decision guidelines. The objective of the MIS is to provide information for a decision support in the process of management.2 illustrates the process discussed here. and authority.
7. Management of capacity. starting from Frederick W Taylor to peter Drucker. Explain. Trace the shift in management focus. Etc. How many of tem have a direct impact on the management process and hence should be considered in the MIS design? 5. List the decision involved in each phase of management process. and map the processes in the task against the processes involved in management process cycle. 4.REVIEW QUESTIONS 1. Explain with example three applications in Resource Materials and capacity management. Take a task which you often do. 2. Can it be the only approach in managing the business? 6. 8. Are you following all the steps in management process cycle? 3. starting from planning to control. pdfMachine .USA .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. List the external environment in which a manager operates. The word management is often used with other words is such as Management of resource. Explain the role of performance standard and “feedback” in effective management of business. MIS supports a manager in his functional responsibilities.Sarras . Explain the importance of management by exception.
how to look at the employees? If the attitude is to treat them as business partners. Goals. objectives and targets are so set pdfMachine . The model puts a lot of emphasis on the management philosophy and the environment factors on which the effectiveness is dependent.1) for the analysis of management effectiveness which generates enterprise effectiveness in achieving the goals and objectives.1 MANAGEMENT EFFECTIVESS ‘ Negandhi Estafen’ provides a good model ( Fig. The MIS design would therefore.USA . objectives and targets The goals are long. the consumers the suppliers. The environment factors provide the opportunities to survive and grow with certain constraints.Sarras . The goals. where the employee will play a decisive critical role. The product life cycle will then be short. in which it operates. The management practices therefore emerge out of the management’s philosophy and the environment. the community and the shareholders. 3. If the attitude towards the consumer is changed to fulfill the expectations giving rise to a higher satisfaction. while the management philosophy sets the guidelines for deciding the management practices to run the enterprise. Objectives and Targets The process of management begins with setting of goals. then the management practices in the product design. be different depending upon the management practices followed by several organization in the same industry. it is left for the management to change its philosophy towards the various players in the business. While the environment factors are difficult to control. Such an attitude will have impact on the management practices. manufacturing and marketing will undergo a significant change. Such design improves the management effectiveness leading to an improvement in the enterprise effectiveness. 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. you will empower them and create a sense of belonging to the organization. the employees. For example. the government.CHAPTER-3 Process of Management 3. viz. It will affect the organization structure by reducing its size and the reporting levels. Basically. It is a change in attitude towards these players.term aims to be achieved by the organization objective are relatively short – term milestones to be accomplished. while the targets generally refer to physical achievements in the organization’s business.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The management effectiveness would largely depend on both these factors.
functional goals and personal goals emerge. efficient planning involves selecting a plan among several alternative plans. frame the polices and set the rules of conducting the business. The efficiency of a plan is measured by the amount it contributes towards achievement of goals. Planning creates a frame of activity and events which are to happen or a runway for achieving corporate goals. when to do. The goals objectives and targets become reference points for strategic planning and operations planning. In an organization as time progresses. Achievement of targets helps in accomplishing objective and accomplishment of objectives leads to the attainment of goals.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. objective and targets from a network. If further helps the management to identify key areas of business and key areas of management attention.USA . objective and targets.2 PLANNING Planning is basic to all managerial functions. objective and targets. It is a decision making process determining in advance what to do. objectives and targets is a top management function. It help to build the strategies. objective and targets. The difference between these entities can be best understood by examples in the three types of organizations given in Table The setting of goals. The are to be achieved within a stipulated time and failing to achieve the same. These are set considering the environment and changes expected to occur in about five to six years. which create conflicting environment in the organization.they are consistent with each other and help to achieve each other and help to achieve each other. The people in the organization can have common understanding of the purpose of the business operations. 3. means loss of business profit and image. The setting of goals objective and targets helps to pull the resources of the organization in one direction and solve. It provides an efficient measure to monitor the managerial process. business goals. An efficient plan enables the management to handle uncertainty and risk in the business. The goals. McGreor saw appraisal against the goals and objective are necessary in every area where performance and results directly and vitally affect the survival growth and prosperity of business”. Careful determination of these entities is therefore essential for a successful management process. It helps appropriates and consistent business review. The plan is efficient the goals with less investment or with less resources Therefore. departmental goals. The organization is expected to consider and cater for these changes and translate them into business operations. for achieving the stated goals. pdfMachine . The organization may have a plan. how to do what is to do. but question is how effective the plan is. The performance appraisal of the manager becomes impersonal and unbiased as it is done with reference to achievement of goals.Sarras . It is a process of selecting one course of action from different alternatives. It has its implications on the business operations and profits. Planning process demands resource allocation through decision making.
An appropriate strategy helps to cut down the use of resources and accelerates the process of achieving the goals. Are known as system models. growth price trends. procedures. maximization of profit. The analysis and evaluation is done with reference to the objectives such as. emphasis and development of resources. changes in technology the plan will be developed and implemented. Since the plan has a commitment to time. pdfMachine . Planning is a process and hence it has a methodology. the necessity is to analyze the feasibility of each. The effective way of creating a number of alternatives is to build models of the situation and use it as a tool for the generation of alternatives. a modek can give infinite alternatives. Forecasting provides information on population. should be built in. A rational plan or a decision can be rejected on the premise of policy .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.The policies are evolved in the wider frame of strategies and are generally not questionable.USA . Planning helps to make operations economical as it continuously evaluates the costs and outputs and forces optimum use resources. The right choice of an objective is a crucial factor in the selection process. The first step in planning forecasting the environment. The strategy shows the direction. and advertising plans. The policy is a statement of management which stands on the top of all plans or courses of action. operational research model and mathematical models. The purpose of the strategy is not to outline a precise method of implementation. rules. Evaluating the feasibility of each alternative brings the infinite number of alternatives to a limited number. policies. market changes. only some of them can be feasible in the given conditions and constraints. The second step in planning is determining alternative courses of action. minimization of cost. The flexibility. The constraints may be man-made or environmental. investment plans. Consequent o the development of alternative courses of actions. etc. Many a time’s good plans fail because of strategic failure. The planning begins with the setting of goals and objectives and ends up in selecting the most rational course of action. The third step in the planning process is to evaluate the best among all the feasible alternatives. It further helps to control business operations at all levels with Common reference to goals. The implementation of plans is made through developing the strategies. the organization has a network of goals. objectives and targets. The management’s ability lies in creating a number of alternatives. focus. but to provide a boost or thrust to the plans of implementation. so that the cost of changes is not very high and the implementation is still possible without loss of time. programmers and the budgets. yield. and new opportunities. Normally. as possible.It helps to handle the change occurring in the environment and affecting the plan itself. These models. but they affect the feasibility of the action. As mentioned earlier. in which the plan is to be made and operated. As. It is necessary to develop the network of plans corresponding to this network. and productivity. it is necessary to build a flexible plan capable of undergoing a suitable change to alter the goals and objectives within the same time. marketing plans. objectives and targets. The process leads to the development of corporate plans. systems. the corporate plans are for a longer period and the derived plans are for shorter periods.Sarras .
is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. therefore. The process planning. the roles they and the relations amongst them.USA . giving directions. Lack of knowledge creates the problems of going away in a totally different direction. it is left to the people to understand and evolve suitable roles and relationships to achieve the objectives. The system provides pathways. the adherence to rules procedures and systems brings a higher degree of formalization in the process of implementation. They provide a common basis and an understanding of conducting business operations. and executing controls to achieve the goals and objectives.but these can be changed. objectives and the targets of the organization. The strategies and policies are important for successful implementation of the plans. The effectiveness is brought in by taking a series of decisions. In essence. It the situation is that of uncertainty. gates and structures for communication and control. the organization can have a policy of recruiting personnel only with the qualification of MBA or it may have a policy of changing the prices once a year and not too frequently. The rules. procedures and programmers to be observed properly. The organization could be formal or informal. participation should be encouraged. The organization is formal when the roles. It deals with a quantitative and a qualitative aspect of manpower in terms of placement. The system is a vehicle for the implementation of a plan. A smooth implementation of the plan calls for the rules. The effectiveness of the plan depends on how it is implemented. A strict adherence to the rules and the procedures builds discipline in the organization. committing resources. When the organization becomes bigger. procedures and programmers help to implement the operational plans. Their participation brings their involvement and commitment to the plan. is to develop the alternatives based on some choice about goals. A successful implementation requires appropriate timing of launching the basic plan and its derivatives.Sarras . the relations of the people and the objectives they should achieve well defined. The plan must be evolved by people who are going to implement it. Depending upon the plans. For example.3 ORGANISING Organizing is an important step in the managerial process and relates to the people in an enterprise. it deals with organizing the manpower resources for a given plan of execution. An effective planning should begin at the top and flow down the line. systems will be built as closed or open systems. with the aim that they work together effectively towards accomplishing the goals. pdfMachine . then the evaluation is done through risk analysis ad preference theory using utility as criteria. 3. The policy. In an informal organization. therefore. For effective planning. is a general guideline and is to be followed by all.
A widely accepted is by functions of the enterprise. and provides control and decision pdfMachine . There are certain important factors to which attention should be paid and which are discussed as follows. The people should and the members of the structure of roles and relationships that it is designed to work effectively and the members of the structure are able to contribute substantially towards the achievement of goals. and should exercise a discretion in using the authority. Marking . and ! Relations analysis Organizing is a process by which the manager can bring a smoothness of operations. i. The span of control can be increased and the number the levels can be brought down by training the subordinates. The structure would be productive. determining the levels in the organization. Production. if it is manned properly. branches and territories through which the business operations are conducted.e. facilitates a formal and an informal communication. Organisation Levels and the Span of Control This factor deals with grouping the people in hierarchical form. use of objective standards. Finance. by way of conflict resolution. creates appropriate responsibility centers. and grouping them in such a way that they form a division.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The people heading these entities should have enough authority to decide. Personnel. There is a number of ways t break the enterprise. precise planning.Sarras . ! Decision analysis. Materials. a department. assigning work responsibility.USA . Many organizations have divisions. Peter Drucker recommends three ways to determine the structure: ! Activity analysis. etc. a section or a formal group. programmers and policies. viz.While creating the organization is given to an appropriate splitting of the enterprise activities. This method is resorted to when the distances are long.. Departmentation Departmentaton is a process of breaking an enterprise into smaller groups and levels.. The third method to department is by way of the product or the services the organization is providing. The levels get determined by the spa of control. The process of manning involves selecting people in right number and placing them at appropriate levels. by way of function. The second method is based on geographic area distribution. This number can vary anywhere between four to eight in higher levels of management and eight to fifteen in lower levels of management to be taken. effective communications and formalizing the administration by way of rules. The department of the organization brings operational convenience. and the strengths and weaknesses of the people and the degree of the delegation of the responsibilities that a superior is willing to attain. and creating appropriate work environment of teamwork while deciding on the process of organizing. in the organization how many subordinates a superior can mange. permits an evaluation of activities by a smaller group. the activities are many and the decision making is decentralized.
but because of the inability to implement it into practice. therefore. Handing over limited authority of decision making to the subordinated is called delegation. Hence. The distinction is more clear and precise at higher levels.Sarras . The failures in delegation occur not because of the lack of understanding of the principle of delegation. The staff function is advisory but owns the responsibility for the results and is accountable for nonperformance. The manager is not able to delegate. Deficient planning leads to an initialization of line capacity and non attainment of targets. Purchasing. execute and control all the tasks in the functions. it is necessary that the decision making is not centralized at one point. conditions and the method of decision making. and is motivated enough to perform. The functions which have a direct responsibility of achieving the targets for production or sales are line functions. A lot depends upon the ability of the manager to delegate and upon the capabilities of the subordinates to use the authority. if he does not have a positive attitude towards delegation. Delegation of Authority The function either is a line function a staff function. Each method of a departmentalizing has advantages and disadvantages and.USA . The relationship between the line and the staff functions is always strained. but still it requires decision making. knowledge and guidance. A failure to use the delegated authority emanates from a lack communication. Marketing. As one person cannot plan. owing to the limitations of time and capacity. The staff functions are those which do not participate directly in the activity but aid line functions to achieve the targets. training and motivation. guidance. Production Planning. if e is not receptive to the subordinates’ ideas and is not welling to accept the risk of failure or mistake of his subordinates. pdfMachine . The performance of the line function depends upon how the staff function has planned the activities. etc.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.points for the top management. leverages and powers to overcome the problems arising out of the staff functions. most routine types of decisions are delegated with the support of rules. The concept of delegation is based on the premise that an individual can take decision if supported by information. are staff functions. The concept of delegation accepts the responsibility of non-performance of the delegated person or the mistakes made by him. Relations of Line and Staff Functions The function of a department can be as a line or a staff. it is to be chosen based on the needs of the management. A line function does not have resources.
Towards Effective Organisation Organisation is an activity of building a structure of roles and relations of the people to secure coordination of individual efforts to achieve common stated goals. In short. qualification and potential becomes an important task in human resource development. the chances of selecting a wrong person are very less if a proper method is used. delegation and parity of authority and responsibility. 3. The selection of a person is a difficult task. locating the problem areas and generating a number of alternate courses of action. The requirement of the future is difficult to predict in precise and this requirement needs to be forecasted for more than five to six years. He must have the necessary drive and self. The manager is a multifaceted personality. if he has the following qualities apart from the function knowledge. pdfMachine . in terms of quality and. if it is designed for the unity of goals and objectives with precise planning and optimum span of control. to delegate the authority and due to the confusion of relation and authority. their selection. It becomes productive if it flexible enough to change and is headed by a manager with leadership qualities. Since people cannot be easily replaced because of socio-political and legal reasons.USA . The person must have the capability of applying knowledge to real life situations in the right perspective. So the purpose of staffing is not manning for the current plan of business but to create a manpower potential capable of undergoing development. is of paramount importance. However.Sarras .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The failure in organization occurs due to the failure to plan properly.motivation to manage. A person is said to have good managerial potential. Hence the selection of a person in terms of age. It becomes further effective. Organisation becomes effective. ! ! ! ! The person must have the desire to manage.4 STAFFING The function of staffing deals with manning the enterprise as per the organization structure so that they together implement the process of the management. he must be a person with analytical ability. Staffing of enterprise should be for todays as well as that of the future. The selection of individuals for line functions is not that difficult because the role and the asks are well defined and do not undergo any significant change over a period of time. The difficult lies in the selection of management positions. objectives and targets. The failure also occurs on account of imbalance in the line and staff function and their relation. Staffing involves not only selection of a person but also appraisal and development so that they perform their designated roles. if it works on the principle of command. so that the same manpower is able to perform the changed roles in the future. He must be able t identify himself with the corporate goals and be committed to them.
the business plan is launched. 3. his ideas and management plans cannot take off.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. bottlenecks removed and a clear path is created to progress on plan achievement. The manager is required to create an environment in which everybody can perform their best. the person must have a good command but due to the psychological barriers he cannot communicate.Sarras . The work environment becomes conducive to good performance if work becomes satisfying and provides an opportunity to expand the scope of work and his influence.USA . The manager must be a person of integrity. whereby the subordinates are lead to understand the purpose of the activity. and by way of guidance. is to coordinate all the activities and provide leadership to the group to keep the plan moving. If not properly communicated. The process meets with a number of difficulties and the manager is supposed to resolve them. The coordinating and directing effect is more effective if the manger is able to motivate the subordinates and provide leadership by way of an affective communication. He should be honest. Their difficult and conflicts are resolved. The process of coordinating and directing takes place through communication. The manager is a leader if he possesses the art of influencing the subordinates in such a way that they willingly perform towards the achievement of the goals. objectives and targets. The staffing. It calls upon the manager to perform a number of things in a coordinated manner so that the plan remains valid and the development takes place as per the plan. There could be shortfalls and overruns. This is possible only if he has the ability to communicate effectively. The task of directing and leading becomes more effective if the human side of the enterprise is taken care of by motivating the people. power game and dissatisfaction on rewards and promotion. Good communication has been defined by the American Society of Training Directives as an interchange of thought or information to bring about mutual understanding and confidence or good human relations. in this situation. This can be judged by the track record of the person and his work experience and the extra curricular activities he may be performing. trustworthy and high achiever. For good communication skills. The manager’s role. Directing and leading are the methods. a direction is given to them to march towards the goals. These barriers come on account of personality conflicts. The process of implementing the plan is dynamic. therefore.5 COORDINATING AND DIRECTING After organizing the resources and staffing the planned activities. deals with creation of human resource in the enterprise to achieve goals. There could be sudden developments which may disturb the plans and the process of implementation. objectives and targets set by the top management.! ! ! The person must be able to perform effectively. pdfMachine . There will be a lag and lead in many activities.
Without control. procedures and rules. The control is exercised through a system. If the corrective action is taken late on account of delayed feedback. The techniques used in the feed forward control are forecasting.USA . where one can desire real time control mechanism.Sarras . Managerial audit deals with how effectively the plans are made and implemented. It identifies whether the operations of the organization are being carried out as per the managerial directives. pdfMachine . a system which provides an instant negative feedback from the standard and an instantaneous corrective action without any time delay. Most of the managers look for real time control system. objectives and targets. Auditing is also a tool of control. rules and policies. reallocation of resources. trend analysis and judging the performance from the standpoint of input versus output. There are several types of audits possible in a business organization. It also examines whether all the transactions are covered completely and for the year. The financial audit addresses the business and financial transactions to find out whether they are carried out with due regard to the accounting principle and statutes. identifies the deviations from the standard. The purpose of control is to regulate the process in such a way that the management process continuously strives for the achievement of the goals. The feedback on the performance should be quick without any loss of time. the managers look for feed forward control. Time is the essence of control. objectives and targets. the successful execution of management plan.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. and corrects the management process to ensure that the plan continues to be effective in terms of achieving goals. application of new system. and whether there are any lapses. an indication that the deviations are likely to occur in near future calling for a corrective action. Since the management control systems are not physical system. the process becomes unproductive. that corrective action can be taken immediately. The system measures the performance of the management in terms of some predefined measures of output.3. It compares the output with the standard. The control system must get into action automatically to correct the midstream adverse development. it is ineffective and may result in heavy losses. The control system work on the principle of feedback. The operational audit deals with an adherence to the rules and the policies of the management. The feed forward control gives an advance warning. The process of correction involves change in the plan. It is addressed to the managerial performance to judge whether it was up to the mark. The best control is the one which brings the process back into operation on the main track without outside intervention. failures or weaknesses.6 CONTROLLING The last but the most important step in the process of management is controlling.
Sarras . It should highlight on the critical success factors and support key areas of management. profit and return on investment throws light on the direction the organization is moving to. experience and analytical skills and is able to face the uncertainties and the risk of business. The summary showing sales. The management performance improves if the business risk and uncertainties are handled effectively. PERT/ CPM. The decisions or actions are prompted due to the feedback given by the control system incorporated in the management system. MIS should have. This is possible only if he is supported by MIS in his specific task of management of business. A good MIS must furnish information to the managers to expand their knowledge base. The information support improves the lack of knowledge.to. The complexity of business operations with skill and foresight to avert the crisis.USA . The emerging new technologies are posing threats to current business and are opening new opportunities for new business ventures. a variety of planning and control tools have been developed.oriented wherein the manager is required to be up. a variety of decisions are taken to correct the course of development. He must know the adverse trends in business. If effective management system is to be assured. made richer in knowledge.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Modern management systems rely on MIS. So. costs. risk analysis models. This requirement arises on account of that in each step of management. Planning and budget models. The MIS should provide the support to act and decisively. wherever possible.7 MIS: A TOOL FOR MANAGEMENT PROCESS The process of management requires a lot of data and information for execution of the plan. 3. operations research models are some of the examples of the control tools. financial models. one can deal with these factors squarely. Modern business has business has become more technology. Modern business management requires shift from the traditional controls to managerial control. the shortfalls and failures in the management process. The manager has to keep himself abreast on the information of how these pdfMachine . if efficient information support is to be provided. The shift requires the manager to become more efficient in handling the he is entrusted with. The manager becomes more efficient if he is well informed. The exception reports identify the weaknesses in the system of management.date on technological advancement not only in his field of operations but also in the other technologies . it has to rest on business information. It should support management in terms of basic business information at the corporate level and meet the specific needs of the managers.With the advancement of information technology and computers. it calls for a system with the goals of generating management information. If the information provided is adequate. support systems to help the manager in decision making. The control of overall performance is made possible by way of budget summaries and reports. enriches experience and improves analytical abilities leading to better business judgment.
technologies affect his business prospects. Can management afford to be one and not both? pdfMachine . A plan without a strong control feature is destined to fail. or both. 9.Sarras . Explain how practices change with the change in the environment. 2. __________ REVIEW QUESTIONS 1. Can attitudes be changed? What role can MIS play in this endeavor? 6. The manager has a leadership role to play. 3. Where should be the control system strong – in feedback loop or in measurement of standards? 8. Can you state goal. is a tool for effective execution of the management process. Explain how management practices are influenced are influenced by the Management philosophy.USA . Why? 7. middle management plan and operations management plan in terms of goal scope and content. Is it necessary that management should be efficient or effective. MIS therefore.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Distinguish between top management plan. 4. objective and targets which you have set for career management? What is the qualitative difference between them? 5. Show the relationship of organization effectiveness to management effectiveness. A good MIS designed for such a support is absolutely essential. How can MIS support this role? 10.
is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Hierarchy of Authority The authority rests with the individual in the organization. The organization structure is built by arrangement of organizational subsystems. . The degree and strength of authority depends on the level at which a person is holding position. When the authority.USA . The structure is built to achieve goals and objectives fitting into the environment. the number of persons being managed and controlled by a person. The organization structure is built on four basic principles. The first meaning of the word organization is an institution or a functional group.CHAPTER-4 Organisation Structure and Theory 4. and the decision making power to manage the risk and reward. the risk of business. a school a university is some such institution keeping in view the concept of division of labor. managerial and non. works coherently towards the achievement of goals.e. A business organization a hospital. Depending on the organization. hierarchy of authority. The structure built on any principle shows division of work. the number of person being managed and controlled by a person. standardization or formalization and. the organization is built on the principle of hierarchy of authority. the risk of business.the level at which a person is holding position. i. specialization. The span outside this range has proved to be unproductive and inefficient.managerial manpower allocation as well as flows of decision responsibility and exchange of information. When the authority is distributed in a vertical order in terms of levels. centralization. i. The span outside this range has proved to be unproductive and inefficient.e.. Depending on the organization. and the decision making power to manage the risk and rewards. and business. The effectiveness of the authority is based on the span of control. responsibility and decision making so that the institution as a stable system. The authority is measured on the basis of command on control of resources. the organization is built on the principle of hierarchy of authority. Speciallsation pdfMachine . and business. The authority is measured on the basis of command on control of resources.1 BASIC MODEL OF ORGANISATION STRUCTURE The word organization means two things. The effectiveness of the authority is based on the span of control. the span may differ from four to seven.. authority. the span may differ from four to seven.Sarras . Is distributed in a vertical order in terms of levels. viz.
The second principal of building organization structure is specialization. and decline.Sarras . A hospital can be structured on the basis of specialization such as General Medicine. if the organization is property structured to the business needs and towards fulfilling the objectives. The organization is under a continuous process of change to meet the changing needs of business. The blending of these principles would undergo a charge as the business grows. Accounting and Personal. aids in functional planning and control of the activities of the organization. risk 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. Surgery. Specialization can be decided in a number of ways. helps to select right people and group them properly. it affects the of control. Where standardization is not possible owing to the nature of business. When business risks are high and difficult to manage. maturity. Favorably. the decision making is at the top and in a decentralized organization. growth of human resource. The people work on the basis of rules. In other words. Standardisation (Formalization) The purpose of standardization or formalization is to make a person in an organization independent. Marketing. the organization will have a different structure in its various business stages namely. Requirement of manpower then increases making the organization top heavy. The organization is structured on the basis of the above four principles. the organization emerges as centralized. With specialization. For example. systems. management style and the environment of business. function. individual performance. arranging all similar and associated tasks under one head. A considerable amount of saving in manpower and overhead expenses is possible. a business organization can be structured on the specialization such as Manufacturing. pdfMachine . In a highly centralized organization. and the manpower itself. inception. Centralization Centralization refers to the location or position where the decision-making centre is localized. guidelines and policies.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The blend of these principal is decided on the nature of business. whereby the interaction between the individuals in the organization is minimum. it is delegated down the lien in the organization hierarchy. growth. If the degree of such specialization is very high a person can supervise more number of people.USA . the delegation of work and its control has become easier. The structure of organization affects organizational productivity. Procedures. size of business.
2) is most suitable where the organization business can be split into clear divisions of activity and all of them are equally important. The number of levels will be determined on the basis of the span of control and the nature of work.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. 4. economy in conducting the business. The functional organization is most suited where each function is a specialty and calls for an expertise in the field.Sarras .Independent of the blend of these principles. Project. the ability to achieve the goals and objectives. The basic model will have more levels if the size of the organization is very large. 4. The appropriateness of the structure can be decided based on the factors like responsibility and authority. Accumulation of information is at the chief executives level and is shared by the others. The organization works efficiently when the business is stable and is expected to grow in a steady manner.USA . 4.2 MODIFICATIONS TO THE BASIC MODEL OF ORGANISATION STRUCTURE. Matrix. Functional. 1. Decision making in any functional organization is at the level of the functional head with accountability to the chief of the organization. 3. and materials. There are four variations of the basic model which are widely used in real life. The in formation flow is from the top to the bottom and in the reverse order. For example. personnel. Functional Organisation The functional organization (Fig. Fig. is referred to the top management. the functional structure undergoes a change. skills. a smooth flow of information exchange and communication. the effectiveness of the structure largely depends on the quality of people – ability. The development of people is on the specialized functions and hence pdfMachine . 2. knowledge attitude and motivation. The basic model of the organization structure is shown in Fig. the business organization can be functionally organized into four or five functions such as marketing manufacturing. There are four modifications to the basic model of organization as under. When the business becomes competitive and develops threats to its growth. A decision affecting other functions of the business. and where coordination is of a very low order and can be handled easily through the management process. finance. 4. however.Product / Market / Service. The implications of the decisions are largely on the functions themselves. The information flow across the functions is not expected.1 it shows the arrangement of the people in a reverse tree structure.2 Functional organization (Emphasis on functional Management) 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. and 4.
purchase etc. In this structure. Since the business resources. But project resources are allocated to the project manager. selling organisanisations in their initial period are structured on the functional lines. 4. the manpower requirement is higher and the people develop specializations in the specific technology and management. The people in a functional organization develop a narrow outlook restricted to their own functions and responsibilities. etc. The contribution to profit by product can be easily measured as profit is earned by product business unit. The corporate culture is difficult to imbibe in a functional set.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Most of the manufacturing. A project organization (Fig. In this structure. Product / Market / service Organisation When the organization grows large in turnover and strength.3). people work more for product goals then the corporate goals.USA . 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 (Fig. 4. MANAGING pdfMachine . The people in the organization report to the product head. the total responsibility rests with the product / market / service head. The government departments and agencies are organized on the functional principle. MANAGING DIRECTOR PRODUCT A PRODUCT B PRODUCT C MANUFACTURING PURCHASE SALES FINANCE Flg.Sarras . In a project organization some of the functions are of corporate responsibility and some of them are the project manager’s responsibility. The inter functional conflicts are avoided resulting in speedy business progress.4. This type of organization structure helps in making quick decisions for project control in terms of cost resource and time.up.they are not equipped to handle other functions if required. He is expected to take all the decisions regarding finance material.4) is a special case of product organization where the common service like finance.3 Product Organisation (Emphasis on Product Management) The decision making in this structure is faster and to some extent centralized. are organized at the functional level.
The matrix organization structure is used in big companies having diverse business activities. 4. The moment the business conditions pdfMachine . The matrix organization integrates functional responsibility with product responsibility.B FACTURING MANU PURCHASE DESIGN COMMIS DESIGN ERECTION COMMISSIONING PERSONNEL ERECTION Fig.USA . the accounts manager as his counterparts in the manufacturing.5) a vertical as well as a lateral communication and information flow is allowed. The business units. known as strategic business units. any problem or conflict relating to the activity needs to be resolved immediately. the activity is one at a time and has implications on the subsequent activities in the project. Of the functional and the product organization structure. It should be noted be noted that the organization structure is a dynamic model. marketing and accounting functions respectively.A PROJECT DIVISION. In a matrix organization ( (Fig. This is possible by organizing all the functional resources under one command of the project manager. the marketing manager. It is effective for the purpose it is set to fulfill under certain conditions.Sarras . These functional managers report to the functional head vertically and the product manager laterally. It is a combination.4 Project Organisation (Emphasis on Project Management).is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. the communication protocol is vertical in the hierarchy. In a project business. The lateral communication between the functions is not permitted. are organized with a unit head at the top. A product manager is responsible for the total performance of the product and he will have the production manager.4. The structure enjoys the advantages of a functional as well as of a product organization. Therefore. The information flow is within the hierarchy. This calls for quick decisions. Matrix Organisation In all the three organization structures discussed so far.DIRECTOR PROJECT FINANCE DIVISION.
beyond the control of the management which affect the performance of the organization.A MGR. A functional head in the functional organization may not be suitable to shoulder the responsibility of the Product Manager in a product organization structure.B FINANCE PERSONAL MATERIALS MGR.B MGR. the span of control can be enlarged than before. 3. Organizational Learning.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The structural change does not limit them from one type to the other but many other qualitative changes are also desirable.change.) There has to be a change in the people in terms of strengths. skills and abilities. Organizational Culture. Organizational Change.Sarras . Organizational Power. There are some factors. With the standardization and formalization drive in the organization. Organizational Motivation. because of inherent limitations of narrow specialized experience as a functional head. the structure should undergo a suitable change. With the delegation of authority. MANAGING DIRECTOR MANUFACTURING FINANCE PERSONAL MATERIL FINANCE PERSONAL MATERIALS MGR. 2. However there are some factors which relate to the organization (independent of the type of structure).A MGR. 4.5 Matrix Organisation (Emphasis on Product / Functional Management. 4. 4.B Fig. ORGANISATIONAL CULTURE pdfMachine .A PRODUCT PRODUCTION MANAGER-A MGR.B MGR. and 5. experienced and capable of shouldering higher responsibility. This would affect the levels in hierarchy. backed by the rules and policies the junior level personnel become more knowledgeable.USA . The behavior of the organization is a result of the following factors: 1.A PRODUCT MANAGAR-B PRODUCTION MGR.3 ORGANISATIONAL BEHAVIOUR Though an organization is structured according to the goals and objective to be achieved the actual performance is at variance for various reasons.
Above all. over the period of time it starts failing slowly due to the change in the environment. goals and managerial style of the organization. It might be localized with the individuals.The cultural is a set of attitudes. values. norms and understandings. Long-term performance and managerial actions depend on the managerial culture and the achievement of the targets depends on the work culture. we say that the organization has a quality culture. The power of the organization is distributed uniformly all over the organization but it may be concentrated in small groups representing a function. a department or a section. policy. and responsibility. Like a pdfMachine . encouraging young recruitments and talent in the organization. When the organization has these factors set at a high level. it can be changed by management actions such as training. creating awareness. and what actually emerges organization structure due to the power play. transferring people. whether he is a manager. If what is meant to be the organization structure in terms of authority. ORGANISATIONAL CHANGE Even though the organization is structured properly. Unless the attitude is positive. Some individuals by virtue of their nearness to the management and a strong personality derive power in the organization structure. They commitment towards the achievement of quality will come only if a high value tag is reserved for quality by the employees. etc.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The attitude of the employees towards quality must be positive and it must be seen in the organization in all the activities. it is better to make suitable changes in terms of positions and their placement in the organization. is at variance. Some individuals by virtue of their position. ORGANISATIONAL POWER The organizational power is the ability of the organization structure to use human and material resources to achieve the stated goals and objectives of the organization.USA . The employees must believe and show a concern towards quality. then it will reflect in the organizational behavior affecting the performance of the organization. the organization must have norms of quality set in all its activities and they must be understood by all the employees. Such a culture will be reflected in the behavior of the organization. the people have in the organization. responsibility and seniority. information flow. it cannot be seen in the product as desired. If the organization culture is generating a behavior which affects the performance adversely. Depending upon the person. beliefs. enjoy more power than others. strategy. The culture may be reflected in the philosophy. Let us take an example of quality of product which a particular organization manufactures and markets. the cultural pattern emerges and it is known as a managerial culture and a work culture. an officer or a worker.Sarras . education. The culture is a collective behavioral result of the people who man the organization. the people and the business. If the effect is adverse.
In an autocratic style. deciding designing and implementing the change. autocratic and supportive. growth. The individuals in the organization are able to assess the strength and weaknesses within them and are able to take steps to improve. The enterprising ones are frustrated under such a leadership style. Organizational Motivation Organizational behavior can be monitored and directed if proper motivation is provided to the people. watching and institutionalizing the change. Another method of motivation is though job environment. the organization’s behavior shows maturity. With experience. As organizational learning increase. the leader determines everything and dictates decisions. It should be a complete task identifiable with the person and with a potential to create an impact on other people or on the business. The decisions are enforced by the power of authority.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The process of organization outlives the purpose for which it is established moves much faster. some changes in the organization structure are inevitable and they should be carried out. There are two leadership styles. starting from the introduction. The behavioral change through the organizational change is achieved by creating a climate for change. The organizational learning is faster if people and the management are dynamic and progressive. The leadership is an interpersonal influence on the subordinates which persuades or motivates them to perform to perform to achieve the goal. if proper corrective action is not taken. pdfMachine . Under such a leadership style people are not trained to shoulder higher responsibilities. The rules. The person should feel autonomy in its operation and should get the direct feedback of the result. The supportive leadership style calls for participation consultation and respects the opinion of the subordinates. With increased learning the organization moves towards high degree of formalization affecting itself. If a proper leadership is provided it is observed that the people perform beyond expectations. presentations are the known methods of motivation.Sarras .living organization. The organization structure in its life cycle. systems and procedures are streamlined over a period of time.USA . ORGANISATIONAL LEARNING The organizational behavior improves with the experience it gathers from all business fronts. With this learning experience. an organization undergoes a process of birth and death. maturity and decline should change suitably in the respective phases. people are in a position to identify the cause and effect relationship. A job is to be designed in such a way that it provides challenge to the skills of an employee. Monetary rewards. It is possible to predict the errors and probable mistakes in the business operations. The process evokes initiative amongst the subordinates and gives them a feeling of importance and satisfaction. Motivation inspires the people to perform.
The choice of technology and structure as additional three elements of the organization system. TASKS PEOPLE GOALS TECHNOLOGY CULTURE Fig. STRUCTURE In view of the nature of the task the organization is supposed to carry out it has to be designed as an open system capable of adjusting itself to the changing environment. The organization continuously exchanges the information with the environment and is influenced by the changes in it. They have identified more elements in the systems in the system besides the people.4 ORGANISATIONS AS A SYSTEM A system is an assembly of elements arranged in a logical order to achieve correctives Objectives the organization is also a system of people.Sarras . Over and above these are to be arranged in proper structure. You may choose the best technology and well designed task. The individuals in the organization Are selected in terms of number quality and ability and are placed in hierarchical order to Plan and execute the business activities to achieve certain goals and objectives. 4.6 Modified Model of the Organisation System. pdfMachine . The management theorists however have seen organization in different views and perspectives.The organizational behavior is an independent phenomenon in relation to the organization Structure. 4. but they have to be suited for the people. According to Leavitt an organization should be viewed as a socio.technical system consisting of people task technology culture and structure. Having selected a proper type of structure the management of the organization Should take the requisite steps to regulate the behavior of the group towards the achieve Mint of goals and objectives of the organization. He says that the task technology and people structure are dependent on each other and their signification cannot be ignored as elements of the system.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The choice of technology of handling the task is dependent on the people. 4.USA . Further a fourth Element has been added as culture. This is the Simplest justification for calling the organization a system.6. The origination therefore has to be built in such a fashion that it adjusts with the changes in the environment and that the goals and objectives are achieved. The modified Leavitt’s model is shown in Fig. The arrangement of task in terms of process and work design is dependent on the people.
attainment of corporate goals will be the consequences.Sarras . The systems and their goals are not stable.technical system whose sub. This phenomenon is best described by a sigmoid or S curve (Fig. 4. viewing the organization as discussed earlier. The goals change in response to the changes in the business focus the environment and in the people in the organization. The task and technology are the physical aspects of the pdfMachine . 4. MIS design should give due weight age to the human side of the organization and its culture.7 Hence the organization is a socio.systems are task people technology culture and structure each having its own input and output satisfying at first its own objective and eventually the corporate organization goals and objectives If the sub-system’s goals and objectives are not congruent with the goals and objectives of the corporate organization poor performance resistance to change and non. A significant change calls for change in the organization structure A goals displacement is said to have occurred when the system goals significantly.USA .5 MIS : ORGANISATION Management information systems (MIS) should be designed.7). All organizations and their business go through the different phases of growth cycle in stages as Introduction Growth Maturity and Decline. 4.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Another reason for goals change is due to the Natural process of growth and decline.MATURITY GROWTH PROCESS PHASE DECLINE INTRODUCTION TIME Fig. Each phase generates new goals to be served if the changed or displaced goals are not reflected in the organization as a system the organization is bound to suffer from decay.
In the organization culture provides sufficient incentive for efficiency and results. This is safe as it has already been approved by the management of the organization. If the culture encourages delegation of power and authority. so that the action can be taken to correct the situation. technological and environmental changes to the concerned level in the organization.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. then the MIS can produce information reports by processing the data and summarizing the results in line with the decision maker’s position in the structure. if the decision making responsibilities are also clearly defied and allocated. It must summaries all information relating to the span of control of product or project manger. If the system is structured on the functional basis where the functional head is a key decision maker and all the functions have equally important role to play. The processing routines in the MIS incorporate these features as an integral part. operational. When an organization is moving through the business phases of introduction. MIS should provide an information support. But culture and people are very difficult to assess from the design point of view. The organization system is an open system and MIS should be so designed that it highlights the critical business. he has to know the trouble spots and shows the interconnection with the other functions. in such a set-up. Besides these functions. The MIS should be able to cater to the view of the product or the project manager and also of the top management. Further. the MIS should support this culture by providing such information which will aid the promotion of efficiency. then the MIS will have a functional design with the information support to the functional head. an integrated MIS would be necessary. Since the organization system has a dynamic role to play to meet the changing needs of a business.organization which can be ascertained very easily. If the basic model of the organization is modified as a product or a project organization system. maturity and decline. then these become part of the MIS. reporting the corporate status of the business to the top management.Sarras . the MIS should give control information to the higher management where decision making in concentrated. Along with the information. If the organization works on a standardized system where rules. The structure of the five sub-systems should be considered while designing the MIS.USA . In a tall hierarchy with a high degree of centralization. This means that the main decision makers and the power centers must be recognized in the MIS. then the MIS should incorporate the decision making rules in the system. then the MIS should focus on the management of planning and control of the multiple functions. the MIS becomes a common support system for playing the dynamic role. The principle of the feed forward control should be extensively used as a design feature to provide a prior warning to the decision maker. growth. Let us discuss these aspects of the organization structure and their implications. relevant to that phase pdfMachine . systems and procedures have been laid down. MIS design should give reports in line with the organization structure. policies.
in isolation from organizational factors. This means the designer of MIS should foresee such requirements and make the design flexible enough to support such requirements. pdfMachine . Figure 4.of the business cycle. How would you describe it product. project Functional. Which all factors will you take up for change if the organization behavior is to change for the better? Which factor is easy to handle and which is most difficult? Why does an organization need periodical review? Which factors would suggest that the organization needs a change? 7. 4. MIS plays a very important role in creating organization behavior which in turn sets the goals for achievement. The information support should be such that the group of enterprising manager should be able to improve their capabilities to perform batter. Technology and people decide the organization structure and style of the management. The organizational learning helps to tone up the behavior of the organization. It should keep the records of action and provide help to analyze the best action in a given situation. What is the meaning of formal organization and informal communication? Can any business be organized only in one or the other organization model? Justify your answer.USA .Sarras .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. 6. The design of the MIS.8 explains the impact and relationship of MIS on the organization behavior. it is difficult to evolve a standard model of the MIS for a business and/or an industry. 1. the management style. Since organization systems in the same business differ for various reasons such as the leadership style. It should be help to build various decision models for use by the managers. REVIEW QUESTIONS. or Matrix? What are the parameters on which an organization is structured? Explain the term: Span of control and Line of authority. culture and group of people as a body and so on. 2. is destined to fall as it just does not fit into the structure. Draw an organization chart of a company known to you. The MIS should support the learning mechanism by identifying the cause and effect in a given situation. 5. 3.
10.Sarras .8.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. 9.USA . Explain how is organization a system where inputs are processed to gat a desired output? What is a goal displacement? Why does it occur? How does the organization handle goal displacement? Why does the organization structure differ from company to company even though they are in same business and industry? pdfMachine .
The essence of planning is to see the opportunities and the threats in the future and predetermine the course of action to convert the opportunity into a business gain. establishing some position in the business world by way of a corporate image. Planning is a dynamic process. A successful implementation of a plan means the execution of these decisions in a right manner one after another. The plans.CHAPTER-5 Strategic Management of Business 5. The goals and the objective that a plan is supposed to achieve are the prerequisites of a plan.1 THE CONCEPT OF CORPORATE PLANNING A plan is a predetermined course of action to be taken in the future. the course of action decided earlier may require a change.USA . such as lunching of a new product. in terms of future. The long-range planning is more concerned about the business as a whole. completing the project. The goals relate to long-term planning and the objective relate to the short-term planning. and to meet the threat to avoid any business loss. Planning means taking a deep look into the future and assessing the likely events in the total business environment and taking a suitable action to meet any eventuality. As the future becomes the present reality. achieving intermediate milestones on the way to the attainment of goals. Planning. relate to the objectives when they are short-range and to goals when they are the long-range. It further means generating the courses of action to meet the most likely eventuality. starting a manufacturing facility. It could also be in terms of action by certain business tasks. therefore. since it deals with along term period. On the other hand. Planning. one dependent on the other. The setting of the goals and the objective is the primary task of the Management without which planning cannot begin. Long-range planning is for a period of five years or more. There is a hierarchy of objectives which together take the company to the attainment of goals.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Planning involves a chain of decisions. pdfMachine .Sarras . the direction of business. short-range planning is more concerned with the attainment of the business results of the year. It is a document containing the details of how the action will be executed and it is made agaist a time scale. and deals with subject like the growth and the rate of growth. a business share and so on. calls for a continuous assessment of the predetermined course of action versus the current requirements of the environment. therefore. can be long-range or short-range. while short-range planning is for one year at the most.
but the execution of the plan is. entity. Time The plan may either be long-range or short-range. the inhibitions and the uncertainties towards the attainment of goals and objective. elements and characteristics. the national priorities. the competitors. Corporate business planning is a necessity in all cases. such as the functional groups.Sarras . The goals and the objectives would be stated in terms of these entities. Organisation The corporate plan would deal with the company as a whole. The corporate plan. It deals with the technology and not with the methods or the procedures. pdfMachine . The breaking of the corporate business plan into smaller organizational units helps to fix the responsibility for execution.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. may operate in a public or a private sector. year after year. therefore. the product groups and the projects.USA . These are time. The business may be a manufacturing or a service. the technology. is a complex exercise of steering the company through the complexities. the business plans. a wrong strategy means a failure in achieving the goals. It could be about the finance. The corporate business plan has five dimensions. the capacity. The rolling plan provides an opportunity to correct or revise the plan in the light of any new information the planner may receive. A corporate plan may have several entities. The entity could be the production in terms of quantity or it could be a new product. Entity The plan entity is the thing on which the plan is focused. it may deal with the industry or trade. Dimensions of Planning. At the same time. but it has to be broken down for its subsidiaries. the marketing. the divisions. the difficulties.Long-range planning deals with resource selection. Corporate business planning deals with the corporate business goals and objectives. keeping the plan period as the next five years. Though the corporate business planning deals with a company. organization. if any. the manpower or the research and development. The right strategy improves the chance of success tremendously. Planning therefore. The corporate business plan considers the world trends in the business. It talks about the strategy of achieving the goals. the corporate strengths and the weaknesses for preparing a corporate plan. may be a national or an international business. its universe is beyond the company. its acquisition and allocation. The plan is made on a rolling basis where every year it is extended by one year. the international markets. would be a master plan and it would comprise several subsidiary plans. the industry.
Elements The plan is made out of several elements. The features of a plan could be several and could have several parts. It would spell out a program of execution of plan and achievements. focus. the trend of the market growth. One important element of the plan is a budget stipulated for achieving certain goals and business targets. and Opportunities) MARKET FORCES It is very difficult to predict the market forces such as the demand and supply. culture and style of functioning followed by policy statements. The plan is a confidential written document subject to charge. Technological change 3. The budgets and performance provide meaningful measure about success and failure of the plan designed to achieve certain goals. Next it would declare the strategies in various business functions. which would enable the organization to achieve the business objectives and targets.USA . It provides support on rules. Complex diversity of business 4. and known to a limited few in the organization. procedures and methods of plan implementation. the consumer behavior and the choices. Characteristics There are no definite characteristics of a corporate plan. There are some compelling reasons which force all the organizations to resort to strategic business planning. The following reasons make planning an essential management process to keep the business in a good shape and condition: 1. It would at the outset. Market forces 2. production.2 ESSENTIALITY OF STRATEGIC PLANNING. the resources. Environment (Threats. wherever necessary. the investment details and a variety of schedules. stocks. place certain policy statements emerging out of management’s business philosophy. the important milestones. The budgets are provided for sales. The plan begins with the mission and goal which the organization would like to achieve. The plan is based on the rational assumptions about the future and gives weight age to the past achievements and corporate strength and weal messes. The choice of characteristics is a matter of convenience helping to communicate to everybody concerned in the organization and for an easy understanding in execution. resources. Challenges. and direction the organization would like to move towards. It may provide a vision statement for all to understand as also the purpose. 5.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. It is described in the quantitative and qualitative terms. Competition 5. The typical characteristics of a corporate plan are the goals.Sarras . expenses which are monitored against the time in execution period. The long-term plan is normally flexible while the short-term one is generally not. the emergence of new pdfMachine .
it is difficult to reorient the organization quickly to meet the eventualities adversely affecting the business unless the business is managed through a proper business plan. fiber optics technology. turbo engines. With the problems arising out of market forces. when there is hardly any product distinction or it may come from certain sectors which are being promoted by the government. etc. the various methods of manufacturing the multiple locations. The technological changes have affected not only the business prospects but the managerial and operational styles of the organizations. prepared with due consideration to the diverse and complex nature of business. the dependence on the external factors. In the absence to any corporate plan. audio-visual transmission.USA . Competition could be direct or indirect. direction and profitability. unclear energy. The emergence of the microchip. The market forces affect the sales. are the issues which the management is required to handle. are the examples which have made some products obsolete. integration-forward or backward. This might lead to the loss of business opportunity. in some cases. after sales service. Technological Change There are a number of illustrative cases throughout the world on the technological breakthroughs and changes which have threatened the current business creating new business opportunities. such a technological change can bring the organization into some difficult problems and. such as the transport. prompt delivery. Competition Facing competition in the business means fighting on a number of fronts. It may share the marker or create a new product which will shift the market affecting your business.product and the new product concepts. plastic. The companies compete on the merits such as the know how. wireless communication. Competitions could be solely in the management of business. diversification-in the same line or in the diverse line of business. have created new business opportunities. Many factors are uncontrollable and unless there is a plan. thermal conductivity and many more. laser technology. the different market segments.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. the growth and the profitability. The variety of products. The scope of business is wide. it reaches a stage where the strategies such as the expansion vertical or horizontal. handling these factors is not possible. The ability of the organization to predict these forces and plan the strategies is limited for the various reasons. The corporate plan is expected to ensure the recovery of the business investment before such a technological change takes over. Complex Diversity of Business. but at the same time. quality. These issues are investment-oriented and have a far-reaching effect on the business growth. pdfMachine . As the business grows. can pose a threat to its survival. the communications and the manufacturing resources brings complexity in the management of business. threatening the current business. touching many fronts.Sarras .
The international laws and agreement create new opportunities and threats to the business. technological environments affecting the business. Competition forces the management to look for new products.Sarras . Depending upon the organizations business and its purpose. The competition should never be underestimated and has to be met squarely through corporate planning. This means that the management has to continuously evolve new strategies to deal with the competition. It could be one of the social.USA . Widespread education programmers have created new opportunities for knowledge processing and communication. and new technologies to keep the market share intact. some examples of recent origin are mentioned as follows. To illustrate the environment’s impact on business. economic. Values and attitudes make the penetration in the market difficult. calls for forward thinking and planning. The policies of the Government also affect the business and the industry. new markets. The attitude of the consumer towards fast food or frozen food decides its spread and popularity. Similarly continuous increase in the cost of transport affects the tourism and hotel industry but promotes the home entertainment industry. Therefore. Forecasting the probable environment changes like the change in population population mix consumer preferences and their behavior government policies new opportunities and so on and forth is a major task. the process controlled and the quality improved.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Many a times. without which it is not possible to handle competition. The environmental changes are difficult to predict and are generally slow. The difference in the values and attitudes of the rural and urban consumers calls for separate products with different advertising strategies for them. businesses. it could be a mix of different environments. Business planning therefore is absolutely essential for the survival of the business Peter Drucker defines long-range planning as the process of making the present managerial (risk taking) decisions systematically and with the best possible knowledge of their pdfMachine . and it has to be dealt with in a proper manner to protect business interests. The introduction of television has adversely affected the film industry and its immense popularity has considerably retracted other amusement activities like going for a picnic or to a circus. many times the managements are caught unaware by the environmental changes. industrial. different environments have bearing on the fortunes of business. Evolving strategies and their implementation. testing and implementation of the strategies. Personal computers are fast replacing the typewriters on account of changing office environment. Environment The environment is beyond the control of the management. Strategies also have to be implemented in a proper sequence as business competition demands an intricate planning.Competition is a natural phenomenon in business.
It begins with deciding the social responsibility and proceeds to spell out the business mission and goals and the strategies to achieve them. The goals become a reference for the top management in planning the business activities.range Strategic planning Like any other business activity planning also has a process and methodology.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. pdfMachine . Planning is neither forecasting nor making future decisions today it is making current decisions in the light of future.3 DEVELOPMENT OF THE BUSINESS STRATEGIES Long. In the very beginning of the planning process it is necessary to establish and communicate to all concerned the social and economic responsibilities of the organization In order to discharge these responsibilities it is necessary to decide the purpose of the organization for which it works. Many organizations call it a mission.futurity organizing systematically the efforts needed to carry out these decisions and measuring the results of these decisions against the expectations through organized through systematic feedback. When achieved the objectives will contribute to the accomplishment of the goals and subsequently the mission. The task after deciding the mission or the aim is to set the goal (s) for the organization. After determining the mission and the goals the next task is to set various objectives for the organization The objectives are described in terms of business results to be achieved in a short duration of a year or two The objectives are measurable and can be monitored with the help of business tools and technologies Objective may be the profitability the sales the quality standard the capacity utilization etc. The goal is more specific and has a time scale of three to five years. It goes without any extra emphasis that the corporate planning is a top management responsibility. It is described in the quantitative terms in the form of a ratio a norm or a level of certain business aspect such as the largest share leader in the industry dominant in certain product quality reach and distribution etc.Sarras . Comprehensive corporate planning is not an aggregate of the functional plans but it is a systematic approach aiming to maneuver the enterprise direction over a period of time through an uncertain environment to achieve the stated goals and the objective of the organization. The mission or the aim of an organization is a broad statement of the organization’s existence which sets the direction of the organization and decides the scope and the boundaries of the business.USA . 5. Planning does not eliminate the risk but provides an effective tool to face it.
such a situation is described as a strategic failure. ENVIRONMENT SOCIO. and the attitudes.Sarras . the money and the knowhow will be put to use over a period to achieve the goals.USA . The development of the strategy also considers the environmental factors such as the tech nology. the life style. The development of the strategy considers the strength of the organization in deploying the resources and unstructured exercise of a complex nature riddled with the uncertainties (see Fig. 5.1 COMPETITION 5. the markets. pdfMachine . the material.ECONIMIC PURPOSE MISSION. such as the men. The resources of an organization being faced by it the game is of evolving strategies and counter strategies to win. GOALS FACTORS FOR STRATEGY FORMULATION STRENGT AND WEAKNESS OF The ORGANISATION BUSINESS FIG. The policies of the Government and so on a strategy helps to meet the external forces affecting the business development effectively and further ensures that the goals and the objectives are achieved.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. 5.The next step in the planning process is to set targets for more detailed working and reference The objective of the business is to be translated in terms of functional and operational units for easy communication and decision making The targets may be monthly for the sales production inventory and on The targets will be the direct descendants of the objective(s) The success in achieving the goals and objective is directly dependent on the managements business strategies business is like a war where two or more business competitors are set against each other to win and are constantly in search of a strategy manner in which the resources.1) it sets the guidelines for use of the resources in kind and manner during the planning period.4 TYPES OF STRATEGIES A strategy means a specific decision (S) usually but not always regarding the deployment of the resources to achieve the mission or goals of the organization The right strategy beats competition and ensures the attainment of goals while a wrong strategy fails to achieve the goals Correction and improvement in case of a wrong strategy is possible at a very high cost . the work culture.
THE overall company strategy is broad. 2. A computer manufacturer will have a strategy of adding new products every two or three years.it is a mixed strategy. Godrej . 4.based having a far reaching effect on the different facets of business and forming the basis for generating strategies in the other areas of business. If a strategy acts on many fronts by different means then it is a mixed strategy the business strategy could be series of pure strategies handling several external forces simultaneously. Another company can have a strategy of expanding very fast to capture the market. Escorts . A company can have a strategy of remaining in the low price range and catering to the masses.g. Marketing Strategy. These strategies are applicable to all the types of businesses and industries. Bajaj. A consumer goods manufacturer will have a strategy of maximum reach to the consumer and exposure by way of a wide distribution network. Overall Company Strategy 2. Hence the strategy may fall in any area of the business and may deal with any aspects of the business It could be aspects like price market product technology process quality service finance management strength and so on when the management decides to fight the external forces of a single area by choice it becomes a pure strategy if it uses or operates in more then one area then it becomes a mixed strategy. 6. The strategy may be pure or mixed It can be classified into four broad classes 1.term business perspective deals with the overall strength of the entire company and evolves those policies of the business which will dominate the course of the business movement it is the most productive strategy if chosen correctly and fatal if chosen wrongfully the other strategies act under the overall company strategy. Growth Strategy 3. 3. MTNL. Overall Company Strategy This strategy a very long.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.USA . To illustrate the overall company strategy following examples is given: 1. BHEL . A two wheeler manufacturing company will have a strategy of mass production and an aggressive marketing. pdfMachine . A third company can have a strategy of creating a corporate brand image to build a brand loyalty e.Tata . The success of an organization in spite of its strength depends on the strategic moves or planning the management pursues. 5.Product Strategy and 4.Sarras .If a strategy considers a single point of attack by a specific method . kirloskar .
The ability to change quickly from one frame of reference to another.USA . with conceptual fluency. a judgment. involves decision-making with the help of tools. therefore. If an organization has a number of people. we are talking about the tools of decision-making with reference to planning. at least at key positions. So when we talk about the tools of planning. There are number of alternatives.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The plans are made on the strength of experience and conceptual fluency. Further. These tools are based on one or more factors. Originality in interpreting an event and generating different views on the situation. The ability to generate a number of ideas rapidly. an intuition of an individual or a group of individuals.Sarras . Then there is selection of method whereby the efforts at all the levels are coordinated towards a common goal and direction. then it becomes a creative organization. These factors are: Creativity: Systems approach: Sensitivity analysis: and Modeling. The concept ional skills comprise the following skills. When decision making is called for a situation which has no precedent then creativity is the only tool to resolve the problem of decision making. involves a series of decisions to be taken by the managers in the organization. The planning. The ability to handle with clarity and ease a complex relationship of various factors in a given situation. 1. 3. 4. 2. pdfMachine . choices and options available while planning the business. Decisions relate to several aspects of corporate business planning.6 TOOLS OF PLANNING Planning. there is selection of resources and their allocation in an optimum manner to maximize the gains.5. Such an organization creates new ideas and new strategies for development of business. long-range or short-range. Creativity Creativity comes out of an experience. strategic or tactical. A person who possesses these skills in said to have a conceptual fluency. Creativity is the result of the conceptual skills of an individual.
The systems approach is a way of looking at a problem in a systematic manner using the scientific methods and applying the principles of a rational decision making to solve the problem. PERT/CPM. It uses all the areas and the branches of knowledge.Sarras . I help to find solutions to problems. It uses tools such a Gantt chart. waiting time cost versus idle time cost. It follows a scientific analysis to identify the problem. It helps to assess the impact of change on the solution in economic terms. costs. If various factors are involved. generates alternative courses of action and helps to select the best in the given circumstances. Sensitivity analysis requires to know whether the solution will still remain valid if the assumptions changed. the sensitivity analysis helps to assess the criticality of the factor against the impact it makes on the solution.Systems Approach Systems approach to planning considers all the factors and their inter-relationship relevant to the subject. It uses a model of a complex situation to handle the problem. The systems approach helps to understand the situation with clarity. 3. pdfMachine . the systems approach has the following characteristic: 1. a rational solution is found.USA . It takes a course to an analytical study of the total system. It considers the environment and its impact on the problem situation. significant and insignificant. 5. relevant and irrelevant. Broadly. It further studies the problems of implementation of the solution. and finally controllable and uncontrollable. It is uses in situation of risk or uncertainty. It deals with the problems where time context is futuristic. Based on these considerations. and examines the various alternative courses of action. Alternately. verses benefits. opportunity loss versus investment cost and so on. operational and economic. 2. It weighs cost against benefit for assessment of the alternatives. 7. Every solution is tested on the grounds of rationality and feasibility. It tests the solutions for feasibility-technical. It uses operations research models if the problem is well defined. it uses a simulation approach to solve the problem. where you are trying to balance the two aspects of the problems. 4. and accepts a given criterion for selection of the most preferred alternative. The sensitivity analysis helps to test the validity of the optimal solution under changed conditions. constraints were relaxed and new condones emerged.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Network analysis for scheduling and coordinating the activities. 8. Sensitivity Analysis The sensitivity analysis helps to test the validity of the solution in variable conditions. inventory carrying cost versus ordering cost. Most of the decision making problems are resolved on the principle of optimality. Some factors will be highly sensitive and some will not be so. The problem situation is handled with certain assumptions and conditions. such as. 6. It helps to sort out the factors on the principles of critical and non-critical.
and the modeling. The model. time is a dimension of the variables.USA .Sarras . A model could be static or dynamic. In the queuing model a solution is selected. In a linear programming model. It uses techniques such as the decision tree analysis. tries to simplify the complexity by ignoring minor factors and emphasizing only minor important factors. Some business models like the break even analysis model. The model only considers the relation of high significance.R. A model. payoff matrix. queuing model. alternately known as a preference curve. the statistical regression models and some of the O. needs to be tested for its utility or effectiveness. depends on the objective chosen. etc. The model could be a physical model. etc. when the cost of the waiting time of a customer is less than the cost of the idle time of facility. The selection of a solution. physical or mathematical. from many alternative solutions. The purpose of a model is to understand the complex situation based on only the significant factors. The model can be tested by using the control results already obtained.Sensitivity analysis helps to test the solutions on the principle of utility. constants and parameters which play a significant role in that situation. A complex situation is represented using variables. The utility profile. The utility profiles of all the people in the organization are not the same. The relation among the variables may be linear or non-linear. linear programming model. In a dynamic model.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. This would show the difference between the result given by the model and the actual result in a real life situation. The model could be a scale model reducing a large body to a small one. There are several types of models. Once the model is proved useful. Modeling A model is a meaningful representation of a real situation on a mini scale. The static model does not change over a time period. network model. The profile shows indirectly the risk-taking ability of the decision maker. when a situation is complex. a park. simulation. a sports complex. then one can say that the model represents the real situation. The model is based on the relations the variables have. matrices graphs and polynomials. Such variables are called the stochastic variables. The model could be mathematical model like break even analysis model. shows the attitude and preference of the decision maker towards the gains and the losses against a time scale. All the planning models and all the forecasting models are dynamic models. The values of these variables change with the change in time. a solution is selected on the principle of maximization of the profit or minimization of the cost. If the difference is not significant. like a model of a house. Here a situation is represented in a mathematical form such as equations.programming models are static models. where only the significant factors of the situation are highlighted. The physical models are static models. A solution which is economically rational and is based on sound business principles may be rejected on the principle of utility. static or dynamic. methods of discounting. in addition to the variables considered. it is used for testing the various solution alternatives. The selection of a solution is based on the pdfMachine .
product and market strategies. when a business is on the growth path. There are various business strategies such as overall company growth. MIS is supposed to give a status with regard to whether the business is on a growth path or is stagnant or is likely to decline. The planning model considers those business variables which affect the business prospects and which show a significant impact on the business results. The MIS is supposed to provide a strategy-pay off matrix for such an evaluation. Since these factors are a part of the environment. market. financing and so on. MIS is designed to assess and monitor these factors.7 MIS: BUSINESS PLANNING Business environment is prone to changes and this factor makes business planning very complex. MIS design is required to keep a watch on environment factors and provide information to the management for a strategy formulation. such as the turnover. The MIS design is supposed to provide some insight into these factors enabling the management to evolve some strategy to deal with them.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. If a business is showing a decline. Strategy formulation is the responsibility of the top management and the top management relies on the MIS for information. The MIS is supposed to provide current information on the status of the business vis-à-vis the goals. market. product. For example. The long-range strategic models are. dynamic models and the short-range management and operations models are mostly static models. If business is losing in a particular market segment. the focus shifts from pdfMachine . Every business may not require all the strategies all the time. The type of strategy is directly related to the current status of business and the goals it wishes to achieve. sales promotion and advertising strategies. Strategy formulation is a complex task based on the strength and the weakness of the organization and the mission and goals it wishes to achieve. the strategy should be of growth. The continuous assessment of business progress in terms of sales. it would need a mix of price-discount. the cost and the profit and so on. MIS should provide the relevant information that would help the management in deciding the type of strategies the business needs. The business does not survive on a single strategy but it requires a mix of strategy operating at different levels of the management. complex diversity of business and competition have a significant impact on any business prospects. Some factors such as the market forces. it would require a mix of price. 5. It should further aid the top management in strategy formulation at each stage of business.attainment of certain value of some aspect of the business. profit and its direction becomes the major role of MIS. then the strategy should be a market or a product strategy.USA . The MIS is supposed to evaluate the strategies in terms of the impact they have on business and provide an optimum mix. In business planning.Sarras . generally. quality. technological changes. MIS should provide support to top management for focusing its attention on decision making and action. In business management. and the reasons thereof. If the status of the business shows a declining trend.
Generate the standards. Success of a business depends on the quality of support the MIS gives to the management.one aspect to another. The assessment of resource need. 7. It contains functional models such as the model for a new product launching. costs. the mobilization of resources. Figure 5. determine the correct status of the future business and projects. MIS is supposed to give a critical feedback on the strategy performance. 5. MIS has certain other characteristics for the top management.Sarras . They are also used for designing strategies and their mix. Evolving the strategies is not the only task the top management has to perform. According to the nature of the feedback. 3. the focus would be on the post sales services and support. In the introductory phase. It also has to provide the necessary resources to implement the strategies. the norms. evolve.3 explains the role of the MIS in strategic planning and its support in the execution and control of the management processes. Management uses the standards. 6. The quality is assured only through an appropriate design of the MIS integrating the business plan with the MIS plan. the focus would be on a product design and manufacturing.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. for deciding the cost effective resource mix. and the mix of resources. evaluate the performance and give a critical feedback on the strategic failures. to 1. the focus and the resource allocation. The MIS should provide early warning to change the focus of the management from one aspect to the other. When the strategies are being implemented. Provide cost-benefit evaluation to decide on the choice of resources. pdfMachine . the ratios and the yardsticks for measurement and control. MIS supports by way of information. the management may or may not make a change in the strategy mix. The MIS should provide information on resources. When the business matures and requires and requires to sustain or to consolidate. the rations and the yardsticks while planning and controlling the business activities. It contains forecasting models to probe into the future-the business model for evaluation of the strategy performance by simulation business conditions. 4. The management also relies heavily on the internal data which is evolved out of transaction processing. quality and availability. decide and determine the mix of the strategies. 2. MIS for the top management relies heavily on databases which are external to the organization. We can summaries the role of the MIS in the top management function as follows.USA . the norms. and its selection becomes a major decision for the top management. precise and unbiased standards to the top management for planning. decide the goals and objectives. The MIS is supposed to provide correct. provide the correct focus for the attention and action of the management. it is necessary that the management gets a continuous feedback on its effectiveness in relation to the objective which they are supposed to achieve. scheduling and the models using PERT / CPM technique for planning. budgeting.
REVIEW QUESTIONS 1. ! Cost analysis. ! Business Model for profitability analysis. What are the different types of strategy? Can a business have more than one strategy? How are different strategies related to each other? Explain with reference to a business of your choice. What benefits does planning either long-range or short-range offers to the management? 9. Also explain how the concept of negative and position feedback is used effectively in this approach? 10. Construct models for the following : ! Break-even analysis. a growth strategy. 7. marketing strategy. ! Cash flow. What is corporate planning? Why is it necessary? It is long-range or short-range? 2. E essentially. 8. Explain the systems approach to management planning. are translated into financial budgets. product strategy. materials. and a business plan is made.Sarras . 5. ! Production Model for capacity forecasting. etc. ! Sales analysis. What is strategic planning? When does it assume importance in the business? 3. i. What is sensitivity analysis? Why is it done on the solution or alternative strategies? What benefits do you get after analysis? 6. sales. Why should companies resort to long-range strategic planning? How is it linked to mission and goals of the company? 4.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.USA .. Does this mean that the organization is doing planning for its business or does it mean through budget it is executing the plan? How are budgets used in planning? pdfMachine . production. all budgets.e. Why is a business model necessary? How would you construct a model for following subject : ! Sales Model for forecasting.
USA .Basics of Management Information Systems CHAPTER-6 pdfMachine .Sarras .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.
The decision may appear as a “snap” decision but it is made only after a long chain of developments and a series of related earlier decision. is settlement. There is a definite method of arriving at a decision: and it can be put in the form of decision process model. Influenced by personal vales Made in institutional settings and business environment. a job responsibility. which are defeated if such a decision is implemented. such as the inter-relationship among the experts or decision makers. if one analyses the factors underlying the decision making process. meaning to cut off.Decision Making g 6. Whatever may be the situation. with due regard to the rationality in decision making. therefore. Each of them has a relation to some other decision or situation.Sarras . and a probable impact on business. the discipline and the individual’s commitment to the goals will decide the process and success of the decision.USA . A decision otherwise being very sound on the business principle and economic rationality may be rejected on the basis of the personal values. a fixed intention bringing to a conclusive result. The culture. The business decision making is sequential in nature. In concept. whether we are talking about business decisions or any other decision. Exceedingly complex due to risks and trade offs. In business. The personal values of the decision maker play a major role in decision making. which are made in the process of conducting business to achieve its objectives in a given environment. we assume that the decision maker is a rational person who would decide. the codes of morals and ethics. The complexity is the result of many factors. a judgment. A decision is the choice out of several options made by the decision maker to achieve some objective in a given situation.1 DECISION MAKING CONCEPTS The word decision is derived from the Latin root decido. a question of feasibility. The concept of decision. The major characteristics of the business decision making are: (a) (b) (c) (d) Sequential in nature. pdfMachine . it would be observed that there are common characteristics in each of them. Business decisions are those. The decision making process is a complex process in the higher hierarchy of management. the decisions are not isolated events. and a resolution.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.
Subjectively rational if it maximizes the attainment of value in relation to the knowledge and awareness of the subject. First. ensures the achievement of the goal for which the decision is made. an employee. will result in a different criticism with reference to their individual rationality. the degree of feasibility in achieving the objectives. the situation and the individual’s view of the business situation.Sarras . The question which further arises: Is a decision “rationales”? If it turns out to be wrong in terms of the results it produces. If you are in business and want to make profit. The rationality of the decision made is not the same in every situation. a supplier and a social scientist.The decision making process requires creativity. * Herbert Simon A. there is no right or wrong decision but a rational or an irrational decision. ! Personally rational to the extent it achiever’s an individual’s personal goals. Third. then you must produce goods and sell them at a price higher than the cost of production. The rationality. If it is raining. In reality. the degree of satisfaction of human interest. It also requires a foresight to predict the post-decision implications and a willingness to face those implications. In other words. ! Organizationally rational to the degree of the orientation towards the organization. A decision. whether a decision is right or wrong depends on a specific rational view. a consistency in decision making. ! Consciously rational to the extent the process of the decision making is a conscious one. can we cast doubts on the rationality? Simon Herbert A* differentiates among the types of rationality. Top Management Planning. All decisions solve a problem but over a period of time they give rise to a number of other problems. a consumer. The Macmillan Company by George A Steiner. so long as the decision maker can explain with logic and reason. The process covers a number of tangible and intangible factors affecting the decision process. therefore. This is because each one of them will view the situation in different contexts and the motive with the different objectives. Second. For example. the business decisions in a private organization and a Public Sector Undertaking differ under the head of rationality. it is rational to look for a cover so that you do not get wet. effectively and efficiently.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Whether the rationality applied is appropriate or not could be a point for debate. Any business decision if asked to be reviewed by a share-holder. the objectivity and the circumstances in which the decision is made. pdfMachine .USA . is a multi-dimensional concept. Hence. in a given situation is: ! ! Objectively rational if it maximizes the value of the objective. It will vary with the organization. Gross Bertram M* suggests three dimensions of rationality. If a decision maker shows a consistent behavior in the process of decision making. The quality of decision making is to be judged on the rationality and not necessarily on the result it produces. The reason for this difference in rationality is the different objectives of the decision makers. it can be termed as a rational decision. Rational Decision Making A rational decision is the one which. imagination and a deep understanding of human behavior. then one can say that he meets the test of the rationality.
the factor of oil and petroleum product price is considered as stable. the timing of the decision is such that one is forced to make a decision but the environment is not conducive for it.USA CHOICE . If time is limited. This process is followed consciously or without knowing it. TOOLS AND PROCEDURES Decision making is a process which the decision maker uses to arrive at a decision. “the most common source of mistakes in the management decisions is the emphasis on finding the right answers rather than the right questions”. total information leading to complete knowledge is necessary. How do we then ensure rationality? It is ensured. misappraisal of uncertainties and risks. the real problem may be somewhere else. an inability of a human mind to handle the available knowledge and human behavior. The management may define the problem as the “Sales are declining”. in a product pricing.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. An important function of a manager is to determine whether the dividing line is reached between insufficient knowledge and the enough information to make a decision. But the postdecision environment proves the consideration to be wrong. We can put this process in the Decision Making Model. Actually.2 DECISION METHODS. For example the problem may be the poor quality of the product and you may be thanking of improving the quality of advertising. misjudging the motives and values of people. if the process of decision making is carried out systematically. (d) The environment may not cooperate Sometimes. He describes the model in three phases as INTELLIGENCE DESIGN pdfMachine . (b) Insufficient knowledge For perfect rationality. (e) Other limitations Other limitations are the need for a compromise among the different positions. The decision may fail the test of rationality as the environmental factors considered in the decision-making turn out to be untrue. The main task is to define the right problem in clear terms. The core of this process is described by Herbert Simon in a model. 6. For example. poor communications. (c) Not enough time to be rational The decision maker is under pressure to make decisions. Herbert Simon said that a decision maker follows the process of decision making disregarding the decision or the type of decision and the motive behind the decision. whereby all the aspects of the decision making discussed above are taken care of.Sarras . he may make a hasty decision which may not satisfy the test of rationality of the decision.The Problems in Making Rational Decisions (a) Ascertaining the problem As Peter Drucker points out. the decline of sales is symptomatic.
a manager finds on collection and through the analysis of the data that the manufacturing plant is under-utilized and the products which are being sold are not contributing to the profits as desired. Choice Select one alternative as a decision. 6.shown in Fig. summarized and presented. developing and analyzing the different decision alternatives and testing the feasibility of implementation. Assess the value of the decision outcome.: (a) Intelligence. the decision making model is refined. minimum waste. Design Inventing. selection is made first on the basis of feasibility. therefore. the manager develops a model of the problem situation on which he can generate and test the different decisions to facilitate its implementation. 6. The problem identified. MIS follows this model in its development state. For example. and the profit is maximized. The manager having identified this as the problem of optimization. In the design phase. processed and examined. the budgeted or the targeted. However. In these three phases. An example of the Simon Model would illustrate further its use in the MIS. the MIS collects the data.1 viz.1 Intelligence Herbert Simon Model Raw data collected. The model used to evolves various decision alternatives. Fig. In the intelligence phase. and the present plant capacity can be pdfMachine . if the manager fails to reach a decision.USA . The product mix so given is examined by the management committee. (b) Design. now examines the use of Linear Programming (LP) Model. is to find a product mix for the plant. least time taken. the attention of the manager is drawn to all the problem situations by highlighting the significant differences between the actual and the expected. the manager evolves a selection criterion such as maximum profit. An ideal MIS is supposed to make a decision for the manager. and highest utility. In this process. and then on the basis of maximum profit. examined.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The MIS achieves this in an efficient manner without repeated use of the Simon Model again and again. The criterion is applied to the various decision alternatives and the one which satisfies the most is selected. whereby the plant is fully utilized within the raw material and the market constraints. checked and edited. he starts the process all over again from the intelligence phase where additional data and information is collected. The data is scanned. and (c) Choice. It is observed that the market constraints were not realistic in some cases. Identifies a problem calling for a decision. In the phase of choose. the data is sorted and merged with other data and computations are made. based on the selection criteria. Further. If the model developed is useful in generating the decision alternatives. least cost.Sarras . the selection criteria is changed and a decision is arrived at. he then further moves into phase of selection called as choice.
is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. pdfMachine . (d) It is difficult to decide an objective or a goal and. Therefore. (b) The outcome of the decision is also not known fully. if implemented. therefore. then it is a situation of certainty. the pricing of a new product. or an acceptance of the fixed deposits. rule or model is available to study and finalize one decision among the set of decision alternatives. Deciding on the possible product diversification lines. then the decision making system is termed as an open decision making system. based on some goal or objective. where his aspirations or desires are met best. If the manager does not have any knowledge whatsoever. and the optimum solution obtained. then his problem of the decision making is not a problem. A market research for some products is made and it is found that some constraints need to be removed and some reduced. If the manager operates in a known environment then it is a closed decision making system.Sarras . additional data is collected and an analysis is made to find out whether the average 20 per cent utilization of the capacity can be increased. There are two types of systems based on the manager’s knowledge about the environment. The MIS tries to convert every open system to a closed decision making system by providing information support for the best decision. If he has partial knowledge or a probabilistic knowledge. tested. (c) The manager can choose one of them. A few examples are a product mix problem. The conditions of this system are: (a) The manager does not know all the decision alternatives. The conditions of the closed decision making system are: (a) The manager has a known set of decision alternatives and knows their outcomes fully in terms of value. and ranked. If the manager has full and precise knowledge of the event or outcome which is to occur. are some decision making situations which fall in the category of the open decision making systems. The MIS gives the information support.USA . LP Model is used.enhanced to improve the profit. If the manager has full knowledge. If the manager operates in an environment not known to him. (b) The manager has a model. A good MIS achieves this. The knowledge of the outcome may be a probabilistic one. then it is decision making under uncertainty. Based on the revised data. he is able to generate the decision alternatives. the manager resorts to that decision. test them and select one of them. Types of Decisions The types of decisions are based on the degree of knowledge about the outcomes or the events yet to take place. Decision Making Systems The decision making systems can be classified in a number of ways. a method or a rule whereby the decision alternatives can be generated. (c) No method. The same model is used again to test the revised position. and the plant location. an examination system to declare pass or fail. whereby the manager knows more and more about the environment and the outcomes. then it is decision making under risk.
The MIS. they cannot be delegated to the lower level. This is mainly because the manager in this field has fairly good knowledge about the events which are to take place. to enumerate all the stages of the decision making situation. Decision making in the operations management. pdfMachine .Sarras . At the top management level.USA . it is called the programmed decision. If a decision can be based on a rule. If the stock level of an item is 200 numbers. then the MIS itself can be designed to make a decision and even execute. Such decisions are infrequent but the stakes are usually larger. A decision which cannot be made by using a rule or a model is the non-programmed decision. Nature of Decision Decision making is a complex situation. If such rules can be developed wherever possible. the decisions are classified as programmed and non-programmed decisions. it is a situation of total uncertainty of account of insufficient knowledge of the external environment and the difficulty in forecasting business growth on a long-term basis. The programmed decision making can be delegated to a lower level in the management cadre. Therefore. the effectiveness of the rule can be analyzed and the rule can be revived and modified from time to time for an improvement. therefore. has full knowledge of environment. giving the relevant information to handle the specific decision making situation. in each of them. It is. The system in such cases plays the role of a decision maker based on a given rule or a method.A good MIS tries to convert a decision making situation under uncertainty to the situation under risk and further to certainty. Since the programmed decision is made through MIS. can develop decision support systems in the nonprogrammed-decision-making situations.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. This is because of the difficulty in forecasting an event with hundred per cent accuracy and the limited scope of generating the decision alternatives. Decision making at the middle management level is of the risk type. and provide the necessary support through rules and a formula for each one of them. necessary to cover a requisite variety of situations with the necessary decision response. The failure to provide the decision making rule. in other words. A good MIS design gives adequate support to all the three levees of management. it is necessary for the manager. and has predetermined decision alternatives for choice or for selection. will lead to a situation where the system will not be able to make a decision. in identifying the problem. The decision maker here is told to make a decision based on the instructions or on the rule of ordering a quantity of 400 items when its stock level reaches 200. then the decision to raise a purchase requisition for 400 numbers is a programmed-decision-making situation. is a situation of certainty. The MIS in the non-programmed-decision situation can help to some extent. method or even guidelines. The Law of Requisite Variety In programmed decision making. To resolve the complexity.
With the advent of expert systems and the knowledge-based artificial intelligence systems. Dynamic Programming. the maximum profit and the minimum loss or the minimum regrets. In the Queuing Model. it is not efficient.Sarras . and (c) Decision Tree Analysis. These methods are termed operational research (OR) methods. while in the open-decision-making situation. Optimization techniques Linear Programming. The method of decision tree can be adopted. The MIS is expected to provide the necessary information and knowledge support to the computer based system. The methods basically are search processes to select the best alternative upon satisfying certain goals. then it is possible to construct a matrix of the decision versus the events described by a value for each combination. in terms of decision versus the probable event.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. the cost of waiting time of the customer versus the cost of an pdfMachine . (b) Payoff Analysis. it is now possible for a computer to develop the alternatives. and (c) The system or the method to generate a decision choice. In many situations this knowledge is not available and the MIS has to provide the information support in this endeavor. the programmed decision making system works efficiently.The requisite variety of situations means that for efficient programmed decision making.USA . When a decision making situation can be expressed. In the Inventory Model. and its pay-off value. Queuing Models. To handle these situations. All the OR methods attempt to balance the two aspects of business under conditions of constraint. the use of resources versus demand is balanced to maximize the profit. deterministic and requires optimizing the use of resources under conditions of constraints. Integer Programming. The process of the decision making is sequential and a chain of decisions achieves the end regrets. if the decision making situation can be described as a chain of decisions. These methods are used in cases where decision making situation is closed. Methods for Deciding Decision Alternatives There are several methods to help the manager decide among the alternatives. (a) All the decision alternatives and the choices in each state’ (b) The decision rules to handle the situation. it is necessary for the manager to provide. test them and handle them on the criteria of selection leading to a decision. to decide on the decision alternatives. Capital Budgeting Models and so on are the examples of optimization methods. software packages are available. All the operational research models use optimization techniques. It has been found that in a closed-decision-making situation. the cost of holding inventory versus the cost of procuring the inventory is balanced under the constraint of capital and meeting the demand requirement. The use of both pay-off matrix and the decision tree requires a probabilistic knowledge of the occurrence of events. Three methods for selection of decision alternatives with the goals in view are: (a) Optimization Techniques. Inventory Models. In the linear programming models. The manager can then apply the criteria such as the maximum expected value.
In our example of pricing.2. and then using it for the decision making. if we replace the values by utiles. The decision is taken by choosing that decision alternative which has the maximum expected value of outcome. if the decision chosen is no change in the price and the competition also does not change the price. then your gain is ‘4’. the decision would be to decrease the price. the decision is made with the help of payoff analysis. Utility is measured in terms of utile. A well placed manager with a sound business will tend to gamble or take more risk. In the capital budgeting model.1 Payoff Matrix I Competitor’s probability No change 0.1.50 4 6 10 Increase 0. The concept of utility relates to the money value considered by the decision maker. suitable to the decision maker’s utility function.30 8 3 4 Expected gain 5. The payoff matrix is constructed where the rows show the alternatives and the columns show the conditions or the states of nature with the probability of occurrence. The intersection of column and row shows the value of an outcome resulting out of the alternative and the state of the nature.70 8. Since. and also the manner in which it is received. The utile value will be different if the money is received in one lot as against in parts in several years. In such decision making situations. The utile value of utility has an influence on the risk taking ability of the decision maker.40 4. Money has a value of a different degree to different decision makers depending upon the amount. The payoff analysis When all the alternatives and their outcomes are not known with certainty. the return on investment is maximized under the capital constraint versus the utility of the investment. than a manager not so well placed in the business.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.60 Your decision No change in the price Increase the price Decrease the price For example.Sarras .2 Decision Payoff Matrix II Competitor’s choice No change Increase Decrease Expected utility pdfMachine . then Rs 100 million is not 100 million utile but could be much more. If rupee one is equal to one utile. Table 6. the matrix would be as given below in Table 6.idle time of the facility is balanced under the constraint of investment in the facility and the permissible waiting time for the customer. the expected value in case of the third alternative is the highest. The MIS supports the formulation of a model. Table 6. A typical payoff matrix in pricing decision is as given in Table 6.USA .20 5 4 12 Decrease 0. The utility function is different for different decision makers. the monetary values of the outcomes are replaced by the utile values.
00 220. The method of analysis can be explained by an example.12 Since the highest value of utility is 220.2 E 8.30 200 400 4 72. the decision tree analysis is useful in selecting the set of the sequence decisions. 6. Collaboration High Demand (HD) Low Demand (LD) 7.2 A Small Capacity Ist Phase 9.50 4 200 100 0.probability No change in the price Increase the price Decrease the price 0. The decision tree is drawn in Fig. the decision would be to increase the price.2 C No collaboration F Fig.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.80 54.Sarras . 6. Decision tree analysis When a decision maker must make a sequence of decisions.9 B Large Capacity No collaboration Collaboration 9.2 Decision Tree pdfMachine .80 utiles.20 50 4 20 0.2 with the help of symbols.USA . DECISION POINT CHANCE EVENT ( ) PROBABILITY Let us take an example of investment in production capacity for a planning period of five years.
He would weigh all the pros and then conclude.Collaboration Ist Phase. therefore. i. pdfMachine .5 9.4 The problem is whether to expand now with a large capacity or to invest now in small capacity and make a decision of expansion after one year with the help of collaboration or without collaboration under certain demand conditions. will be enterprising in every aspect of the decision making. Path ABC -. the decision is many a times influenced by personal factors such as behavior. they can be classified into two categories. He will endeavor to develop all the possible alternatives.No Collaboration Ist Phase.Collaboration ABD -. Since. looking for the completion of the task some-how.2 7. being a human being. The path which given maximum cash flow is the right decision path..Collaboration Ist Phase.In this decision situation there are two decision points and six paths as given below. the achievement-oriented. He would be scientific. No Collaboration IInd Phase ACFJ -.No Collaboration Ist Phase. more rational. Collaboration IInd Phase ACFK -. The response of one manager may not be the same as that of the two other managers. the decision is to invest in a small capacity in the Ist phase and invest in the remaining capacity in the second phase with the assistance of the collaboration.Sarras .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. the highest expected cash flow path is ACEH. The achievement-oriented manager will always opt for the best and.9 7.0 8. Collaboration IInd Phase ACEI -.e.5 8. as they differ on the behavioral platform. methods and procedures are evolved. Even thought tools. 6. therefore. No Collaboration IInd Phase Exp.USA . The decision tree approach is useful when you visualize a series of decisions having alternative paths with the associated probabilities and the cash flows for each path for more than one year.No Collaboration ACEH -. behaves in a peculiar way in a given situation. The cash flow values are the under. looking for excellence and the task-oriented. and. viz. and. therefore..3 BEHAVIOURAL CONCEPTS IN DECISION MAKING A manager. i. The manager differ in their approach towards decision making in the organization. Cash flow 7..e.
Sarras . what emerges is a hierarchy of goals which may be conflicting. Their behavior shows a distinct pattern indicating a conservative approach to decision making a path of low risk or no risk. is a complex mix of the personal values. the corporate goals are not achieved. disregarding rationality required in a business decision to meet their personal goals and to satisfy their personal values. are difficult to understand. the managers will arrive at a decision objectively. Each individual enjoys different powers and rights because of his position. he will make objectively rational decisions. their positions in the organization and their interrelationship with other managers. even thought decision making tools are available. Ultimately. The corporate goals and the goals of the departments/divisions or the functional goals. The rationale of the business decision will largely depend upon the individuals. he will make a decision which will be subjectively rational as he would act with limited knowledge and also be influenced by the risk averseness. If the manager is enterprising.The manager’s personal values will definitely influence ultimately. and hence. self defeating and inconsistent. Such a behavior sometimes overrides normal rational decisions based on business and economic principles. the different individuals cannot equally influence the organizational behavior. therefore. 6. If the organization is a system. the choice of the tools may differ depending on the motives of the manager. the management process and the setting of business goals. the decision making process slows down in the organization.4 ORGANISATION DECISION MAKING An organization is an arrangement of individuals having different goals. are in conflict. The behaviors of the manager are also influenced by the position he holds in the organization. The interplay of different decision making of all the managers in the organization shapes up the organizational decision making. function and importance in the organization. satisfying individual goals. But if the manager is averse to taking risk. they may make a conscious decision. may a time.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Many a times. Since there is an imbalance in the power structure. and if their objectives are in conflict. The managerial behavior. If two managers are placed in two decision making situations. the atmosphere in the organization. pdfMachine . Thus.USA . the motives and the motivation. The motives are not apparent. The behaviors are influenced by a fear and an anxiety that the personal image may be tarnished and the career prospects in the organization may be spoiled due to defeat or a failure. it is clear that if the attitudes and the motives are not consistent across the organization. and its departments / divisions or functions are its subsystems. Further. A rational decision in the normal course may turn out to be different on account of the motives of the manager. and the resistance to change. Some of the managers show a nature of risk avoidance. then unless the system’s objective and the subsystem’s objectives are aligned and consistent to each other.
4 Methods of Dealing with Uncertainty Explanation If the environment is reviewed at Method Decide for a limited short Example Purchasing of smaller quantity more pdfMachine . affecting the organization’s overall performance.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Dealing with Uncertainty The organizations perform in an environment of uncertainty. Legal. If the goals are conflicting. the technology changes are some of the factors which make the business environment uncertain. The methods for dealing with uncertainty are given in Table 6. Maximization of profit. be towards minimizing the risk in decision making. Permission to set goals which can be achieved with an acceptable decision making rule and systems.4. or the corporate goals. Method Allowing local rationality in the setting of goals. therefore.3 Methods of Conflict Resolution Explanation Where the functional interdependence is minimum and the goals /objectives / targets do not significantly influence the corporate goals Where there is functional dependence.Sarras . Otherwise. quality. Commercial. Organizational behavior will. the changers in the Government policy. Administrative functions. not knowing the moves of the competitors. Time office functions. the price fluctuations. The market uncertainty. the conflict in the organization increases. customer satisfaction. The organizational decision making should help in the resolution of such conflicts. etc. they are resolved in a sequential manner one at a time. Production versus Sales versus Materials functions can evolve decision rules to meet the local goals and affect the goals of the dependent functions. The organizational behavior theory provides different methods for resolution of avoiding such conflicting goals as explained in Table 6. Permission to achieve the goals in a sequential manner.3 Table 6. the organization suffers from indecision. The organization will vote for a decision which has 90 per cent chance of earning Rs 1 million as against a decision which has 10 per cent chance of earning Rs 10 million.In case of inconsistent goals. The trend will be for risk avoidance with the available information support. The organizational behavior in decision making tends to avoid risk and minimize cost. Table 6. It is a deliberate decision to ignore the conflicting goals within a bounded rationality. leadership image. Example Security. level.USA . to set local goals which will not adversely affect the goals of dependent functions.
the training and development. It creates the infrastructure to make all the decisions rational. These models should provide for the generation of decision alternatives. the uncertainty can be reduced providing a chance to correct the previous decision. the organization builds skills and capabilities in the management. Adopting such methods. the uncertainty is converted to certainty by making decisions binding.period. it revamps the decision rules and also provides a systems approach to decision making.5 MIS AND DECISION MAKING CONCEPTS It is necessary to understand the concepts of decision making as they are relevant to the design of the MIS. the designer must help to select the criteria to select one alternative amongst the many. In the design phase of the model. short intervals. Further. The process begins with small changes in the existing policy and guidelines.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. implementation. In pdfMachine .Sarras . procedures and systems. rationalization and the application of the management science. The Simon Model provides a conceptual design of the MIS and decision making. wherein the designer has to design the system in such a way that the problem is identified in precise terms. frequently. As the time progresses. test them and pave way for the selection of one of them. To reduce the impact of the risk. and allows setting them more correctly. to achieve the objectives. The organization may take a fresh look at the alternatives. Then it slowly comes to the changes in the strategic decision and planning.. the experience of implementation and so on. Adopting the policy of enhancement in place replacement by new plants and equipment. methods. and make a provision to correct the decision. 6. which can be implemented effectively and efficiently. Organisational Learning The organizational decision making improves with learning by acquiring an additional knowledge and experience. Learning provides strength to review the goals and the objectives. That means the data gathered for data analysis should be such that it provides diagnostics and also provides a path to bring the problem to surface. outcomes. supply assurances and sharing the risks. It also helps to revise and improve the decision rules. the organization may have a new set of goals and objectives. The improvements are carried out by adopting the policy of modernization. through the negotiated contracts. In a choice phase.USA . the designer is to ensure that the system provides models for decision making. It may go through a process of rationalization of goals and objectives across the company. International price agreements. Negotiated decision making with limited liability. whereby he can transfer decision making from a decision maker to the MIS and still retain the responsibility and accountability with the decision maker or the manager. The concept of programmed decision making is the finest tool available to the MIS designer.
case of non-programmed decisions. and the uncertain environments. The concepts of the rationality of a business decision. The significance arises out of the complexity of decision making. and OR models are available which can be made a part of the system. and prompts him to provide a support in the MIS to handle these limitations. the regrets and the utility. the design needs to have limited flexibility. The optimization models are static and dynamic. therefore. A number of decision making problems call for optimization. the MIS should provide the decision support systems to handle the variability in the decision making conditions.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The closed systems are deterministic and rule based. The methods of decision making can be used directly in the MIS provided the method to be applied has been decided. The MIS design addressing these significant factors turns out to be the best design. the MIS can provide the analysis based on the gains.USA . The decision support systems provide a generalized model of decision making. The relevance of the decision making concepts is significant in the MIS design. the design should be flexible to cope up with the changes required from time to time. the organizational and behavior aspects.Sarras . The concept of decision making systems. The reliance on organizational learning makes the designer aware of the strength of the MIS and makes him provide the channels in the MIS to make the learning process more efficient. In these problems. such as a payoff analysis. while in an open system. makes the designer conscious about the human limitations. such as the closed and the open systems helps the designer in providing design flexibility. the human factors in the decision making. The concepts of the organizational and behavioral aspects of decision making provide an insight to the designer to handle the organizational culture and the constraints in the MIS. the risk averseness of the managers and the tendency to avoid an uncertainty. Some of the problems call for a competitive analysis. pdfMachine . and both can be used in the MIS.
Explain. Why does the decision maker resort to bounded rationality in a decision making situation? Can a decision be called as right or wrong? What is the measure of correct decision? 7. Can the quality of decision making be improved? Explain how it can be improved.USA . pdfMachine . Why do two people disagree on the choice of a decision? Is it then better to resort to? Programmable decision making? 4.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Why do decision making situations arise? Identify few decisions in your life. is it due to lack of information support or some human factors Or both? 6. Why is more time spent in problem analysis and problem definition as compared to the Time spent on decision analysis? 5. 9. where the outcomes were known with certainty. Can you automate the process of decision making? The answer is ‘Yes’ and ‘No’. risk And uncertainty. 2. What best must be aimed at? 8. 3. Explain the role of a model in problem solving. Explain the process of abstraction used In constructing the model. 10.Sarras .__________ REVIEW QUESTIONS 1. List the different criteria which can be used in decision making. If a person is indecisive.
Reduces uncertainty. Has a surprise value.1 will highlight this point. The quality of information could be called good or bad depending on the mix of these characteristics. providing information of an exceptional nature that is the sale of new product in the total sales. In MIS. Ratio of sales performance To the budget. actions and objects.CHAPTER-7 Information 7. Devis and Olson defines information as a data that has been processed into a form that is meaningful to the recipient and is of real or perceived value in the current or the prospective actions or decisions of the recipient. In MIS a clear distinction is made between data and information. information has a precise meaning and it is different from data.1 INFORMATION CONCEPTS The word ‘information’ is used commonly in our day to day working. The information has a value in decision making while data does not have. Data is like raw materials while the information is equivalent to the finished goods produced after processing the raw material. Sales of new products 85 % 80 / 60 days pdfMachine . Reduces the uncertainty of sales of new product as expected sales were only Rs 70 lakhs. Table 7.Sarras . Data is defined as groups of non-random symbols in the form of text. Budget.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. It can be noted in the above example that sales data is processed with the budget data and further some results are computed. Lakhs) 10 / day 15 / day 510 / 60 days 600 / 60 days Particulars of sales data Characteristics Represents sales / day Represents budget / day Updates the knowledge about sales as on date. images or voice representing quantities. Makes the information meaningful by a comparison with budgets and has a surprise value as it is significantly below the budget. 15 per cent less than budget.USA . The sales data progressively becomes information when processed with other data such as the budget and the new product sales. Aids in decision making. A sales report shows in Table 7. These are: Information ! ! ! ! ! Improves representation of an entity Updates the level of knowledge.1 Sales Budgeted sales Cumulative sales Cumulative budget Sales information (Rs. Information has certain characteristics. Information brings clarity and creates an intelligent human response in the mind. Represents Performance of Sales vs.
The concept of summarization is used to provide information which is needed in the form and content. Production Top. The MIS is equivalent to the transmitter which provides information and sends through reports (channel) to the various receivers.USA . Management functions Levels Performance. 7. A good MIS communicates the information without a noise and a distortion to the user.2. The methods used for improving communication are summarization and message routing. which is equivalent to a ‘Noise’ and a ‘Destortion’ in the communication model. Table 7. The data may be collected in the best possible manner and processed analytically.. the manner of information handling and the limitations and constraints of a receiver as the information processor and the organization as the information user. Goals. which is decoded or interpreted by the receiver at the destination.1 Conceptual Model of Communication The above model of communication is used in the MIS. Divisional Head Marketing.Sarras . 7. it may fail to communicate anything of value to the receiver.2 Information Summarization Focus of information Responsibility Key for summarization Management position Example General Manager. it must be transferred through communication from the ‘Source’ to the ‘Destination’ without loss of content.1.Whether an entity is a data or information. The degree of communication is affected by the methods of transmission.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. if it is not presented properly. however. The poor quality of information due to various factors would create confusion and misunderstanding.. Materials. SOURCE TRANSMITTER CHANNEL RECEIVER DECODER ENCODER DESTINATION NOISE AND DISTORTION Fig. The information can be summarized in a number of ways as shown in Table 7. Targets pdfMachine . Information Presentation Presentation of the information is an art. bringing lot of value in the information. The general model for such communication is given in Fig.
confusion. That is. then such information may have secondary purposes to some other users in the organization. Many a times the data and the information are suppressed but the inferences are informed. The summarization suppresses the noise and the distortions.in the organization Selective on condition.USA . while using the techniques of classification or filtering the information.. he should readily have it. Apart from the misuse of information. Where sale is below the budget. it should not happen that certain information gets eliminated or does not get classified. Only those products. The principle of the message routing achieves the spread of information to the appropriate quarters. That is if the information is generated with a certain purpose for a primary user. Another method of improving the degree of communication is through message routing. This is achieved by sending the copies of the reports or documents to all the concerned people or users.3 are available for use with discretion. but in this case processor’s bias is forced on the pdfMachine . Bias in information While choosing the appropriate method of communicating information a care has to be taken to see that is not biased. Though the deliberate enforcement of the inference on the receiver avoids a possibility of the multiple inferences. The principle here is to distribute information to all those who are accountable for the subsequent actions or decisions in any manner. just in case required. with no or little possibility of verification or rethinking. a deliberate bias in covering certain information is to be avoided. i.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.e. In this case one who draws inferences may have a bias in the process of collection. Knowledge is a power and an intelligent person in the organization can misuse this power to achieve personal goals undermining the functional and organizational goals. This bias enters because people try to block sensitive information which affects them. Further. In order to curb the misuse of information. misunderstanding and missing the purpose. a control is exercised on the content of information and its distribution. The principle behind summarization is that too much information causes noises and distortions. Relevance to the level Exceptions Middle Operations. processing and presentation of data and information. it has an impact on the cost of information processing. This tendency should be curbed.Sarras . the decision maker may call for the information on the grounds that. To overcome this problem. For example. a formal structure of organization should be adopted and the type of information and its receiver should be decided by the top management. The methods shown in Table 7..
Change in the format and content of the report Suppression and filtering of the information of confidential and sensitive nature Suppress the details and references of data and information To avoid the risk of exposure and the misuse of information for achieving the undesirable goals. It will have only a knowledge value Provide only that information which may be needed.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. For example. the information is presented in a graphical form.4 Attributes of the information pdfMachine .Sarras . Sales information to operations managements.4 Table 7. and its benefits to the managers. the cost information. However. the graphic size and the colour introduced a bias in the reader’s mind. which may creep in inadvertently because of the information system design.receiver. the choice of exception and deviation from the exception creates a bias by design itself. The base. Method Delayed delivery of information Example Sales report to the sales representative or a copy of invoice to the sales representative. In all these cases personal bias. Make it difficult to read through the information and avoid its probable misuse. Table 7. sales versus target for the middle management sales with a trend analysis to the top management. For a quick grasp. organizational bias and management bias may be reflected in the entire process of collection processing. Market Research. hence the misuse is averted. The presentation of the information will generate a bias and may influence the user. and communication inference. the first few information entities will get more attention. Truncated or lopsided presentation A focus on high value sales and production and suppress the details. the scope of information. The price. R and D. can be tackled by making the design flexible. organizations have departments like Corporate Planning. it must have certain attributes to increase its utility as shown in Table 7.USA . Allow the manager or the decision maker to choose his classification or filtering criteria. the method of analysis and the presentation of inference. The choice of scale. which collect the data and analyze it for the company and communicate the inferences. somewhere balance needs to be maintained between the flexibility of the design and the cost. so far as reporting is concerned. Disregarding the bias in information. Make it difficult to collect. If the information is presented with a criteria of exception. Statistical reports with no references. and process the data at the user end to meet the personal needs of information. For example. if the information is presented in an alphabetical order and if it is lengthy. Drawing and design information. HRD and so on.3 Methods to Avoid Misuse of information Reason A possibility of immediate action or decision is reduced.
numeric or graphic..2 INFORMATION: A QUALITY PRODUCT Information is a product of data processing. satisfaction.Attribute The accuracy in representation Explanation The test of accuracy is how closely it represents a situation or event.Sarras . if it creates managerial impact leading to attention. error and bias. The information arriving late loses its utility as it is outdated. area and range.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The degree of precision will decide the accuracy in representation. Its use is to be made carefully so that the reports are not crowded with information. the manager will determine the quality of the information based on the degree of motivation it provided for action. Internal form organization or external to organization. and the contribution it provided for effective decision making. therefore. The information which covers all the aspects of the decision situation by way of the scope. printed or displayed. utility. It may relate to the past. summarized or detailed. decision and action. viz. and the interest shown by the recipient or the decision maker. How often the information is needed? How often it needs to be updated. The quality of information is high. The coverage of information in terms entities. is inevitable on a limited scale. The receipt of information on time or when needed is highly useful. The form of presentation The frequency of reporting The scope of reporting The scope of collection The time scale The relevance to decision making Complete for the decision considerations The timeliness of reporting Redundancy is the repetition of the parts or messages in order to circumvent the distortions or the transmission errors.USA . therefore. Forms are qualitative or quantitative. The quality of information can be measured on the four dimensions. transactions and period is a complete. sometimes is considered as an essential feature to ensure that the information is received and digested. 7. the current and the future and can cover the entire time span. In MIS the redundancy of data and information. The irrelevant information is a data. pdfMachine . The redundancy. The information has relevance to a situation and also to a decision making. Even if we take care of the aspects discussed in the above section.
pdfMachine .The utility dimension has four facets. and the transactions in the period. The procedure of communicating the information should be such that the system is able to detect the degree and the nature of the bias and correct the information accordingly. 3. the one common key for measuring the quality could be the satisfaction of the decision maker. The errors creep in on account of various reasons. and if not.USA . then its utility increases. Lastly. as a whole.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. the subjective ness would vary. the access and the possession. The approach should be that the error should be prevented. 4. Care should be taken that the information is processed after ensuring the correctness of the data in terms of the time and the number of document. then its utility is the highest. they should be controlled. which will ascertain the correctness of the contents. If the organization has a high degree of satisfaction. Therefore. Since in the organization there are many users of the same information.the form. The concept of the utility of the information is subjective to the individual manager. the utility is optimized. Many of the organizations suffer from the possessive nature of the managers an access difficult for the other users of the information. 6. To control errors. An error is the third dimension of the information. failing that they should be detected. formulae. namely: 1. at least in terms of the form. time and access. An incorrect data measurement An incorrect collection method Failure to follow the prescribed data processing procedure Loss of data or incomplete data Poor application of data validation and control systems A deliberate falsification An erroneous information is a serious problem because the decision maker cannot make the adjustments as he is not aware of it in terms of the location and quantum of error. If the information is easily and quickly accessible through the Online Access System.Sarras . If it is available when needed. If the information is processed out of a biased data it will have a bias. 5.. on a logical plane. therefore. etc. If the information is presented in the form the manager requires. is to be maintained between the cost and the utility. then one can be safe in saying that information systems are designed properly to meet the information needs of the managers at all the levels. The degree of satisfaction would determine the quality of the information. The processing of data for the information processing should be allowed only after a thorough validation of the transactions and the contents. it is necessary to follow the methods of systems analysis and design. its utility gets an added boost. 2. Improving the quality through increasing a utility means an increase in the cost. the principles. The data should be checked against the master data wherever possible and balance should be controlled through logical processing by using rules. if the information is possessed by the manager who needs it. the time. The balance.
the use of test data and conducting a physical audit of the record versus the reality would help considerably to control the errors arising out of wrong processing.Sarras . However. Since the information and the purpose need not have one to one correspondence. however. Validity The validity of the information relates to the purpose of the information. A systematic effort should be made to keep the computer system document up-to-date. if the information collected talks only about raw materials and the process of manufacture. if one can develop information with due regards to these parameters. For example. These errors lead to wrong processing. The measures of auditing.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Therefore.USA . consistency and age. Parameters of Quality The parameters of a good quality are difficult to determine. this is difficult to control. then this information is not sufficient and hence it is not valid for all the decisions which are required to control the quality. The users being many. Quality is a function of the raw material. and a pre-determined objective or a certain motive. In other words. then one must collect all the possible causes which may affect the quality. a prejudice. validity. modifications and changes required by the decision makers.The computer system and programmers are prone to errors because of the corrections. the tendency to use it in a particular situation may make the information invalid. reliability. The partiality creeps in. the tools applied. the measures of the quality assessment. for guidance to the user of the system. if the data is collected with a preconceived view. Impartiality Impartial information contains no bias and has been collected without any distorted view of the situation. one can easily control the outgoing quality of the information with the probable exception of the satisfaction at the user’s end. if the quality of the manufactured product is deteriorating and it is decided to select the causes of poor quality. the information can be termed as of a good quality if it meets the norms of impartiality. Reliability pdfMachine . it is the answer to the question-dose the information meet the purpose of decision making for which it is being collected? The validity also depends on how the information is used. The quality of information has another dimension of utility from the user’s point of view. the process of manufacture. the attitude of the people towards the control of quality.
If the information is old then it does not meet any characteristics of the information viz. Consistency The information is termed as inconsistent if it is derived form a data which dose not have a consistent pattern of period. you have collected the information on the quantity of production for the last twelve months to fix the production norms. `No Stock’ report calling a purchase action is an action information but the stock ledger showing the store transactions and the stock balances is a No-action information. the data processing and the systems in the organization. If in this twelve months period. The consistency can be brought in by rationalizing the data to per shift production per month. and the representation. Somewhere.USA . The regularity in providing the information also helps in assessing the consistency in the information. A failure to maintain the parameters to a high degree affects the value of the information to the decision maker. These problems are in the management of the operations. For example. For example.. John Dearden of Harvard University classified information in the following manner: Action versus no-action information The information which induces action is called action information. it is not useful today.It is connected to the representation and the accuracy of what is being described. if the organization collects the information on the product acceptance in the selected market segment. the update of knowledge.3 CLASSIFICATION OF THE INFORMATION The information can be classified in a number of ways provide to a better understanding. the element of surprise and the reduction of uncertainty.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Maintaining these parameters at a high degree always poses a number of problems.Sarras . Age If the information is old. 7. The information which communicates only the status of a situation is no-action information. the information must relate to a consistent base or a pattern. If the sample is small. The currency of the information makes all the difference to the users. Recurring versus non-recurring information pdfMachine . the production statistics of the twelve months for comparison is inconsistent due to per shift production. the information may not give the correct and a complete picture and hence it is not reliable. the sources. the factory has worked with variable shift production. The reliability is also affected from the right source. the size of the sample and the method of selection of the sample will decide the reliability.
the stock statements. etc. The monthly sales reports. are recurring information. the design standards are the examples of the planning Information. the stress is more on the information. The mix of the internal and the external information changes. The timing information. the stress is more on the external information and at the operational and the middle management level. The time standards. norms and specifications are used in the planning of any activity.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. as the sources of the data are outside the organization. the trial balance. it will induce a decision or an action leading to control.USA .The information generated at regular intervals is recurring information. the recurring information and the internal information are the prime areas for computerization and they contribute qualitatively to the MIS. External TOP MGT Low Source of Information MIDDLE MGT Structured Information Internal OPERATIONAL MGT High ORGANISATION STRUCTURE Fig. such information is called the planning information. while the information generated through the Government reports.Sarras . When such information shows a deviation from the goal or the objective. depending on the level of the management decision. is termed as external information. the industry surveys. in terms of its application. Figure 7. The timing and accuracy of the action information is usually important.2 shows the source and kind of information required vis-à-vis of management in the organization. etc. Hence. At the top management level. Knowledge information A collection of information through the library reports and the research studies to build up a knowledge base as an information source for decision making is known as Knowledge pdfMachine .2 Organisation and Information The information can also be under. the operational standards. The financial analysis or the report on the market research study is non-recurring information. Control information Reporting the status of an activity through a feedback mechanism is called the control information. 7. Internal versus external information The information generated through the internal sources of the organization is termed as internal information. Planning information Certain standards.
The choice of method will have an impact on the quality of information.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The material specifications or the supplier information is database stored for multiple users. The information can also be classified based on its usage. The observation. Therefore. 7. perfect information is a myth. The various methods of data collection are explained in Table 7. A decision making situation is of certainty when the decision maker has full knowledge about the alternatives and its outcomes. This is possible when perfect information is available. Information like sales or production statistics is functional. 7. while the remaining methods are chosen to collect data on a routine basis without any particular problem whatsoever. less the cost of obtaining the information. currency. The decision theory stipulates that the value of the additional information is the value of the change in the decision behavior. If the additional information does not cause any change in the pdfMachine . the experiment.5. When the information has a multiple use and application. The methods of data collection and processing become a part of the MIS. resulted by the information. Such information may need security or an access control. meeting the operational needs of these functions. risk and uncertainty.4 METHODS OF DATA AND INFORMATION COLLECTION Several methods are available for the collection of data. When the information is used in the operations of a business it is called the functional or the operational information. and the fact versus the opinion in the various types of methods. An awareness of these methods is essential to the manager.5 VALUE OF THE INFORMATION The decision theory suggests the methods of solving the problems of decision making under certainty. Such a collection is not directly connected to decision making. he should also understand the potential problems of bias.USA .information. The decision maker feels more secured when additional information is received in case of decision making under an uncertainty or a risk. if it wipes out uncertainty or risk completely. but the need of knowledge is perceived as a power or strength of the organization. it is called the organization information. Further. the information has a perceived value in terms of decision making. When the information is used by everybody in the organization. it is called the database information. However. the survey and the subjective estimation are the methods chosen for data collection and information about a specific problem. Employee and pay-roll information is organization information used by a number of people in a number of ways. Similarly the design of data collection method also decides the quality of data and information.Sarras . The information is called perfect information.
If the VIP is very high. C2 relate to the new set. stock statements. the industry publications. The information on a specific parameter can be obtained through a control over variables. less the cost of obtaining the new information. V1 And C1 relate to one set of information and V2. payroll. Experiment Assessing the yield of a new fertilizer by a design of the control experiment. Easily available at a price. Further his ability to generate decision alternatives owing to the imperfect information of the situation and also the expected events in the future is limited.. a decision maker will select one on the basis of the available information. Market and technology studies. Enables to cover the interested population on specific aspects. In the absence of all the three above. It is dependent on the observer and is influenced by the bias. The quality of information depends on the design of the experiment.USA .5 The Methods of Data and information Collection Method Example Observation The first hand knowledge avoids a response bias. Survey Subjective estimation Data pertaining to future like the alternate source of energy. A manager is faced with the problem of decision making under uncertainty or risk conditions. pdfMachine . opinion polls. An accuracy of observation will decide the response. if he does not know the perfect information about the decision situation. UNO.Sarras . The value of the additional information making the existing information perfect (VPI) is: VPI = (V2 – V1) – (C2 – C1) Where V is the value of the information and C is the cost of obtaining the information. then it is beneficial to serve the additional information need. sales reports. Market survey. the institutional publications such as NCL. The Tax publications. the reports and findings. One time. May be expensive and may have a bias depending on the source. Databases on the specific subject. and cencus. The data exists but needs a processing and integration for reporting. BANKS. NCACER. Transaction Processing Purchased from outside Publications Government agencies Available but may not be directly useful not knowing the details of collection analysis and is usually not the latest.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Assessing the market response to a new packaging through test marketing. the life style in the 21st century. then the value of the new information is the difference in the value between the outcome of the old decision and that of new decision. the various public forums The Reserve Bank of India publications. given a set of possible decisions.. Ledgers. Low cost but may project or emphasis one view or the other. Table 7. The quality of questionnaire will decide the quality of information. Comment Visit to the customer for assessing the customer complaints. the expert opinions may be called to collect the information. If the new information causes a change in the decision.decision behavior then the value of the additional information is zero. A visit to assess the accidental damage. In other words. The government publications. research studies. Information may be lopsided.
Filtering is a process whereby a manager selectively accepts that much input. The result of this processing will be a response which may be a decision. Hence. In MIS. while at the higher levels of the management.6 GENERAL MODEL OF A HUMAN AS AN INFORMATION PROCESSOR A manager or a decision maker uses his sensory receptors. The decisions at the operational and the middle management level are such that the value of the additional or new information is low. 7. This is a case of too much information or extra information creating a problem for the user of the information to sort out the relevant from the irrelevant or the appropriate from the inappropriate. it has a value which is to be measured as strength in promoting the functions of the management.It may be noted that the information has a value only to those who have the background knowledge to use it in a decision. which the information processor adopts. That is why it is observed that all the managers of the same level do not accept or absorb all the inputs which the information may provide. Some information has the strength of motivating the manager to think in futuristic terms. the concept of the value of information is used to find out the benefit of perfect information and if the value is significantly high. the manager also uses accumulated knowledge from memory.USA . a manager can be said to be an information processor. to pick up information and transmit them to brain for processing and storage. The manager in such a situation adopts the method of filtering the information. The experienced manager generally uses the information most effectively but he may need less information as experience has already reduced uncertainty for him.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.6 Methods of Filtering Method Example Comment pdfMachine . While processing the information for a managerial response. the value of additional information is very high. when compared to a less experienced manager. Apart from the monetary value of information. The capacity of a manager to accept and process inputs to produce output is variable and limited. an action or at least recognition of the event for future use. the system should prove it. normally eyes and ears. The methods of filtering.6 Table 7. It also reinforces the right and wrong of a decision making process that the manager is following. it would not be worth collecting the additional information.Sarras . which his mental ability can manage to process. The limitation arises sometimes on account of the information overload which is external to the manager. the decision being mainly strategic and tactical in nature. are mentioned in the Table 7. Some information has the strength of confirming the beliefs or understanding the business process. If the value is insignificant.
EARS OUTPUTS FILTERING AND BLOCKING MENTAL PROCESSING APPLICATION SELECTION. Many a times a processor is required to perceive process and evaluate probabilistic information. Select that data whereby a specific decision rule can be applied. selection of technology. ACTION. introduction of a new product. An experienced manager is a skillful information processor where he is able to change the frame of reference or select the decision making tool for the available information. REGISTRATION Fig. He is also in a position to add more knowledge base information to the current information to increase the value of the information.Sarras . therefore.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. market segments. consider only some products. The filtering process blocks the unwanted or the inconsistent data or the data which does not match the frame of reference. knowledge and know-how. Break even analysis. 7. Ignore the past data. The processor may be deficient in the intuitive understanding of the information.3 Generalized Model of Information Processor.The frame of reference by using knowledge and experience. Period. Ignore the demand variation based on experience. in the ability to identify the correlation and the causality. methods of fixing inventory levels. Critical decisions. Managers’ individual Differences pdfMachine . decision rules or procedures. Pricing. 7. may draw incorrect inferences. products. urgency of decision making and the confidence in a particular method of decision making. MANIPULATION DECISION.USA . An inexperienced manager or a less knowledgeable manager through filtering may omit data. Consider only the important factors affecting the decision. The choice of filters may be changed due to stress. Select only the relevant market segments. The information processor establishes the filters based on experience.3 BRAIN USE OF STORED KNOEDGE AND EXPERIENCE INPUTS FROM EYES. and in the capability for integrating the information. Ignore the intangible factors. Select data babes on proven methods. Use the known decision models. A generalized model of information processor is shown in Fig. Universally acclaimed normal decision procedure. distort data responses and.
are highlighted. The managerial ability. A filtering process is used to select and suppress the information. so that they become easily noticeable by the user without search. Each manager has his own style. An excellent review of a research on the individual differences and the MIS can be found in Zmud. Secondly.USA . The design of the system should be such that an appropriate mix of these two sources should yield a decision. organize and process the same as per his frame of reference. The information should provide the additional results such as variance. 1979. skills and tools play a considerable role in the cognitive style of the manager. the designer should report the data in such a manner that the user can grasp it quickly.The managers’ may come to some decision in a given situation but they may not follow the same decision process. confidence in the decision procedures and the time available for the decision making. pdfMachine . the standards and the performance.7. leading to a solution of the problem. October 25. Management Science. Codes and representation The system designer should evolve such coding system that is easy for the users of the code to interpret. correlation. Statistical analysis The designer should provide the information in such a way that the information not only represents something meaningfully but also aids in the statistical analysis by the user.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. This is because of the cognitive style of each manager. a method to perceive the data. 7. Simon model and its application The designer should attempt to provide such information that it clearly defines the problem space and also takes cognizance of the user’s knowledge. the budgets and the actual. Filtering The system designer should provide an appropriate filtering mechanism so that the information is not suppressed and relates to the frame of reference of the user.Sarras . “Individual differences and the MIS success” . The concepts are summarized as follows. Care should be taken in the process that certain valid information does not get blocked or over emphasized. These styles affect the information system design and the satisfaction of the manager. The reasons of individual differences are given in Table 7. Highlighting The designer should the information in such a way that the significant differences between the targets and the achievements.7 SUMMARY OF INFORMATION CONCEPTS AND THEIR IMPLICATIONS Understanding of information concepts is very important and relevant to the system designer and the information user.
Low dogmatism. methods used for decision making. The degree of faith in beliefs. Risk propensity. Higher. The ability to read through the information. The managers with a wide experience in the different fields of management call for precise and less but pertinent information. Experienced and skill full managers rely on the manipulative intelligence. Level of clarity required in the information. The ability to take the risk. pdfMachine .coefficients. The top management decisions regarding expansion. then more information collection and processing. The top management decision making in a strategic planning. The pricing. Manager constantly asking for more information.Sarras .7 Reasons of Individual Differences Explanation Effect on information processing More information gathering and analysis. models. opinions and past experience. selection of tools and materials etc. The production decisions. The nature of management decisions differ from lower to higher level Higher. Manipulative intelligence. in decision High. then correct filtering of data and appropriate choice of decision making process. The degree of perception in assessing the control which is internal to the organization. The extent of knowledge in the application of the tools and technology. then more information gathering and analysis. Factual information at lower level. Examples Individual Differences Locus of control internal or external to the situation. Experience making. Tolerance for ambiguity. Tight tolerance then more information collection and analysis. Higher. The management level from lower to higher. The ability to manipulate the data and information vis-à-vis the stored information and knowledge. advertising in a competitive environment. Extent of experience at particular level of decision making.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. if internal. then the unstructured information different analysis. Table 7. then less information and more self analysis. High ability.USA . The Technocrats scientists and managers of technology have definite information needs based on tools. and futuristic estimates and give a measure of statistical significance for the user to consider while decision making. tools and technology. Knowledge of the task. Personal dogmatism. and diversification and the strategic business decisions. then less information relevant to and tools correct analysis. and the use of the new decision models.
Olson by McGraw-Hill duly modified) Format The designer should present the information in the form or format which is complete in all respects and in which all data is processed as per the frame of reference of the user. the standard. Learning theory The designer should appreciate that the user inadvertently is learning through the information and is building his knowledge set. giving a facility to make an adjustment to results or status which the information provides.(Source: MIS by Gordon B Davis and Margrethe H. Feedback loop The designer should provide the information feedback loop. Referencing and adjustment The design should evolve a system in such a way that it covers the valid system boundaries and providers a reference to an acceptable point (the year. The designer would keep this data out of the current processing and reporting.USA . amend or act. so that user understands that the process of decision implementation is smooth and the result is evaluated with reference to the norms or the expectations. he also evolves a process of the decision making which is personal to him. the norm.Sarras . In line with his individual style. the designer should provide a system whereby the user can have access to this unused data. Hence the information should be such that the user is nit overloaded with the supply of information which is already known to him. Perceived value of data Some data or information may not have a value or an importance in the current operations of the business but some time in the future or in a different context some value is perceived for the information. The designer of the system should provide the information in such a manner that these individual styles are accommodated fully. Cognitive style Each user has his own style of resolving or reconciling his internal view and an understanding of the problems or environment versus the actually perceived or seen or as it exists. giving the user a sufficient motivation to change. the product. The user should not be required to do additional processing with other data set through the computer systems or mentally by using the data set from the memory.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. However. if required. Information absorption pdfMachine . the knowledge).
the media and the structure of reporting with reference to the type and the level in the organization. The necessary checks and controls should be introduced to control the quality of the input data.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Since information has a role to play in all the organizations. Central Government bodies and so on. the value of the information. the concepts are applicable to all of them.Sarras . job and responsibility to achieve the goals. The system designer’s managerial ability of the MIS development and a higher relationship with the users of the information will help him steer though the system development task. The people organization model may be designed on the basis of the functions. Since the MIS is a blueprint for the information supply. 7. will be ignored or go unnoticed without any response.The designer should provide only that amount of information which the user is able to grasp and use. Depending upon the levels in the organization. the designer will succeed in developing a near perfect MIS for an organization. The designer should support all such needs effectively by making the separate information reports. if he can work on a plan with a vision and a foresight and provide continuous training to the users. Each of these methods has a bearing on the quality of the input data which will be processed by the MIS. performing at one or multi locations and the information need is typical to all of them. beyond the ability of the user’s absorption. the products. It is. The organization may be large or small.USA . education. the projects and the communication matrix and the information needs that are typical to each of them. therefore. The management consists of a group of people who are organization at various levels with an assigned task. pdfMachine . banks.8 ORGANISANISATION AND INFORMATION Management through decision making is a common feature to all the organizations. the strengths and weakness of the organization structure and the individual differences of the managers and their cognitive styles of solving the problem. the nature and the complexity of the job is determined. These features are common to all the organizations whether they are in the field of business. The concept discussed here are very important and the system designer should take care of them while designing the data gathering and processing systems. necessary to understand the use of the information. the management process. Any additional information. the type and the quality of information. the business organization and the infrastructure of the organization has an influence on the nature. The MIS should acknowledge the problems and difficulties in various methods of the data gathering and their sources in the organization. The people organization. The proper incorporation of this concept while designing the MIS would call for a thorough understanding of the business environment. health or social services. Individual differences The information needs of different managers will differ based on individual human processing ability and cognitive style. the nature of the information.
Sarras . A failure to do so would result in a wasteful expenditure in the development of the MIS and poor usage of investment in the hardware and software. A special care should be taken to handle a noise and a distortion on the way to destination. if the value of information is not changing substantially then. due regard should be given to the communication theory of transmitting the information from the source to the destination. it is not possible to determine the exact nature and quantum of perfect information. The designer of the MIS should take care of the data problems knowing that it may contain bias and error by introduction of high level validations. The information has a value if it causes changes in the decisions. The information is a quality product for the organization. Care should be taken in the process that no information is suppressed or overemphasized. While designing the MIS. consistency and age. The MIS should provide specific attention to these quality parameters. the satisfaction. It should simultaneously build the knowledge base in the organization by processing the data obtained from different sources in different ways. The MIS design should find an optimum point where the cost and the benefits are balanced.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. reliability. This can be resolved by applying the concept of a value of the information. The perfect information which helps in converting a situation of uncertainty or risk to certainty is a myth and difficult to achieve.USA . the conflict between the cost and the benefits arises. it may not be worthwhile to spend more money on the additional data and it’s processing. The principles of summarization and classification should be carefully applied giving regard to the levels of management. MIS should use the redundancy as a measure to control the error in communication. With an additional cost of information. checking and controlling the procedures in the manual and computerized systems. The quality can be ensured if the inputs to the MIS are controlled on the factors of impartiality. pdfMachine . The utility of information increases if the MIS ensures that the information possesses the necessary attributes.. Since the information is related to the decision maker. the actions or the behavior of the decision maker. The redundancy of the data and the information is inevitable ob a limited scale. the utility. The presentation of information plays a significant role in controlling the noise and distortion which might interrupt. viz. validity. 7. the error and the bias.9 MIS AND THE INFORMATION CONCEPT The goal of the MIS should be to provide the information which has a surprise value and which reduces the uncertainty. The quality of information as an outgoing product can be measured on four dimensions. while communicating information to the various destinations.Also while attempting to achieve the best design of the MIS.
impartiality. The principles of design and the use of the information concepts in design does not change but when it comes to the applications. the organization is divided into four levels. with reference to the level of management. These human capabilities differ from manager to manager and the designer has to skillfully deal with them. 7. An action. The MIS design should be such that it meets the needs of the total organization. viz. As against this. the use of the MIS.. suppressions and delayed delivery. the supervisory and the operational. Since.USA . the faith and the confidence in the information versus knowledge. the middle.Sarras .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.MIS should make a distinction between the different kinds of information for the purpose of communication. the MIS satisfies the information needs of the people in a particular organization. pdfMachine . the attitudes and the beliefs of the people and the strengths and the weaknesses of the organization. the risk propensity.4. the MIS design should have the features of filtering. The information could be of recurring type or an ad hoc type. the design has to give a regard to the organization structure. reliability. should ensure the input data quality by controlling the data for the factors. The MIS design. it requires recognizing some aspects of human capabilities in the MIS design. the culture. the top. The top management uses the MIS for goal-setting and strategic planning. The MIS also needs to give regard to the information used for planning. the lowest level management and the operational management uses the MIS to know the status by calling information of the current period in detail where the perceived value of information is the lowest and it usually insists on getting the information in a fixed format. therefore. the design of the MIS cannot be common or universal for all the organizations. viz. The information concepts are shown in relation to the organization pyramid in the Fig. and knowledge database. Recognizing that the information may be misused if it falls into wrong hands. the manipulative intelligence. a decision-oriented information should be distinguished from a no-action/knowledge-oriented information. consistency and age. Since the decision maker is a human. the experience in decision making and the management style. blocking. and the analysis thereof is further reported to the various levels and individuals with due regard to the differences in the individual management style and human capabilities. It explains. the tolerance for ambiguity. For design considerations and for the operational convenience. performance control. A distinction between these factors will help make the decisions of communications. deals with key information of a higher degree of accuracy where the perceived value of the information is very high. storage and also the frequency of reporting. the value of information the nature of information and its reporting. The data processing and the decision making routines should be developed in such a manner that the data is processed after thorough validation and checking. The differences in the capabilities arise on account of the perception in assessing the locus of the management control. validity.
! Planning. Since your school days. and ! Control. Can value of information be improved? Can information have a value which is person independent? 4. Explain how quality of information improves the knowledge and decision making capability of the people. 5.__________ REVIEW QUESTIONS 1. Take up a project in a known organization and identify the information in following classes: ! Organizational. 3. Would you call this awareness of your as a data or information? How would you call convert this awareness into information? 2. Is it worth to invest for obtaining perfect information? Is it possible to specify the perfect information? 10. 8. Explain. Why? 7. ! Strategic. you have purchased number of books and your home library has over two hundred books.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Explain the difference between data processing and information processing.USA .Sarras . increase storage and offer distributed access. and leave the processing of data to the user of the information. The trend now is to improve data quality. The character and value of information is linked to the people in the organization and to the management process in the organization. pdfMachine . ! Knowledge. 9. What is information overload? How does it occur? And how would you control it? 6. Explain why information has no specification but it has a character and value.
Hence. and not as information processing for management actions and decisions. It can be used for knowing the current status of any aspect of the business due to its on-line real time processing capability. In MIS the information is recognized as a major resource like capital. information and physical resources of other computers.CHAPTER-8 Development of MIS 8. distance. It can be used for storing large database or knowledge base. Intelligence and Language. It is necessary to link its acquisition. Most of the organization does not recognize ‘Information’ as a resource. time and capacity. Computers can now be used as a tool for information processing and communication.1 DEVELOPMENT OF LONG RANGE PLANS OF THE MIS Introduction Any kind of business activity calls for long range plans for success. use. The computers have become user-friendly. due regard is often not given for its planned development and use.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. in the function of Storage. the same being true for MIS. Many organizations have spent financial resources on computers purely to expedite the activity of data collection and processing. Communications. They have looked at information as one of the many necessities for conducting the business activity. With the advancement of computer technology. The computer technology is so advanced that the barriers of storage.USA . The plan for development and its implementation is a basic necessity for MIS. this function is misinterpreted as data processing for expeditious generation of reports and returns. storage. Such a broad-based activity can be executed only when it is conceived as a pdfMachine . The organizations have invested in computers and expanded its use by adding more or bigger computers to take care of the numerous transactions in the business. Computers are used mainly for computing and accounting the business transactions and have not been considered as a tool for information processing. In fact. understanding of language and speed are broken. In this approach. the information processing function of the computers in the organization never got its due regard as an important asset to the organization.Sarras . Many organizations have purchased computers data processing and for meeting the statutory requirement of filing the return and reports to the Government. it is now possible to recognize information as a valuable resource like money and capacity. However. And if this resource is to be managed well. They can communicate to any distance and share data. it calls upon the management to plan for it and control it for the appropriate use in the organization. the scene has been changing since late eighties when the computers became more versatile. and disposal as per the business needs for meeting the business objectives.
Once the management needs are translated into information needs.USA . It can be achieved only if the MIS is planned. internal and external environment of the organization and the business. if necessary. The plan of development of the MIS is linked with the steps of the implementation in a business development plan. it is necessary that the business planstrategic or otherwise. policy constraints. decision making and action. states the information needs. we need a Management Information System flexible enough to deal with the changing information needs of the organization. The goals and the objectives of the MIS would be so stated the they can be measured. Table 10. keeping in view. control information is provided for a short term planning and execution. The details of information are provided to the operations management to assess the status of an activity and to find ways to make up. It should provide support to the changing needs of business management.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Contents of the MIS Plan A long range MIS plan provides direction for the development of the systems. The information needs for the implementation of the business plan should find place in the MIS. It should provide support for management planning. The typical statements of the goals are as under. pdfMachine . This system should deal with management information and not with data processing alone.1 shows equivalence of Business Plan and MIS plan. It should support the needs of the lower management as well as that of the top management. The designing of such an open system is a complex task.system. The information needs are then traced to the source data and the systems in the organization which generate such a data. it is left for the designer to evolve a plan of development and implementation. The system of information generation is so planned that strategic information is provided for the strategic planning. It should satisfy the needs of different people in the organization at different levels having varying managerial capabilities. The plan of MIS is concurrent to the business plan of the organization.Sarras . The MIS goals and objectives will consider management philosophy. business risks. MIS Plan is linked to the Business Plan MIS goals and objectives It is necessary to develop the goals and objectives for the MIS which will support the business goals. and provides a basis for achieving the specific targets or tasks against a time frame. To ensure such an alignment possibility. the plan of the business management of the organization. In short. The plan would have the following contents which will be dealt by the designer under a support from the top management. It should be conceived as an open system continuously interacting with the business environment with a built-in mechanism to provide the desired information as per the new requirements of the management.
The architecture of the MIS The architecture of the MIS plan provides a system structure and their input. output and linkages. Information support will be the first in the strategic areas of management such as marketing or service or technology. (c) Resource for system development: In-house versus external. They are: (a) Development strategy: An online. Strategy planning and decisions. The designer has to take a number of strategic decisions for the achievement of the MIS goals and objectives. The query processing should not exceed more than three seconds. a real time.1 Business goals and objectives. Strategy for the plan achievement. System development schedule. Operation plan for the execution. analysis to modeling.Sarras . a batch.! ! ! ! Provide online information on the stocks. coupling and decoupling of subsystems by way of simplification. matching the plan execution. (d) Manpower composition: Analyst. Database versus Conventional approach. Table 8. Architecture of the Management Information System to support decisions. Accounting versus Analysis. The focus of the system will be on the end user computing and access facilities. Business plan and strategy. It also provides a way to handle the systems or subsystems by way of simplification. Such statements of the goals and objectives enable the designer to set the direction and design implementation strategies for the MIS plan. and storage to printing. Hardware and software plan for the procurement and the implementation. objectives.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Information strategy for the business plan implementation playing a supportive role. Management plan for execution and control. customized Development versus the use of packages. one Database versus Multiple databases SSAD vs OOT. markets and the accounts balances. consistent to the business goals and objectives. pdfMachine . Business Plan Versus MIS Plan Business plan MIS plan Management information system. It spells out in detail the subsystems from the data entry to processing.USA . Distributed versus Decentralized processing. coupling and decoupling of subsystems. programmer skills and know-how. (b) System development strategy: Any approach to the system development – Operational versus Functional.
unless the systems are fully developed their integration is not possible. Further. The process is to match the technical decision with the financial decision. Policy. culture. it is necessary to develop the accounting system first and then the analysis. This development schedule is to be weighed against the time scale for achieving a certain information requirement linked to a business plan. the economics of investment is worked out. it is necessary to revise the time schedule and also the development schedule. If these are not fully met. The selection of the architecture.Sarras . Then the plan of procurement is made after selecting the hardware and software. 3. The choice of information technology is a strategic business decision and not a financial decision. under-utilization and are not able to meet the critical information requirement. One can take the phased approach of investment starting from the lower configuration of hardware going over to higher as development takes place.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The system development schedule is linked with the information requirement which in turn. whenever necessary.2 A Model of the MIS Plan Contents Particulars Corporate information Corporate philosophy Corporate mission/goals/objectives Business risk and rewards Business environment and current operation. the approach to the information system development and the choice of hardware and software are the strategic decision in the design and development of the MIS in the organization. guidelines. A model of MIS plan is giving in table 10. Focus Where are we ? What is the foundation of business ? Where do we want to reach ? What is the risk ? is it worth the risk ? pdfMachine .2 Table 8. While preparing the schedule due consideration is given to the importance of the system in the overall information requirement. Due regard is also given to logical system development. The organizations which do not care to take proper decisions in these areas suffer from over-investment. Clear quantitative statements on these factors showing a trade off between the risk and rewards. The organization’s strategic plan should be the basis for the MIS strategic plan 2. For example.USA . Hardware and software plan Giving due regard to the technical and operational feasibility. The information system development schedule should match with the implementation schedule of the business plan. Current and new mission/goals/objectives. It is important to note the following points: 1. is linked with the goals and objectives of the business.The system development schedule A schedule is made for the development of the system.
2 ASCERTAINING THE CLASS OF INFORMATION Ascertaining the information needs of the management for the business execution is a complex task. The design of the MIS should consider the class of information as a whole and provide suitable information system architecture to generate the information for various users in the organization. Information Technology details.Sarras . Details of the systems and subsystems and their linkages charted against the time scales. Such information can be determined by constructing a matrix of information versus as shown in Table 10.3. sales.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The trends in sales. production technology. norms etc. Details on the investment schedule and benefits. but its usages are different. services. production. Manpower and delegation details. which becomes the basis for the ascertainment. operational.Business policy and strategy Information needs Architecture of the plan Schedule of development Details of the strategic and policy decisions affecting the business. How do we achieve the goals and objectives ? What is the key in formation ? What are the achievement ? tools for When and how will it be achieved ? Who will achieve it ? How much will it cost ? Organisation of the plan Budge 8.3 Classes of information Information Class Example of information Organizational The number of employees. Strategic/planning. industry and target. targets. competitors’ information.4 It can be observed from the table that the information entity is one. budgets. such as utilization. Let us now proceed to ascertain to the information needs of each class. Organizational Information One can define the organizational information as a whole and provide suitable information system architecture to generate the information for various users in the organization. products. Information for problem solving and modeling. outstanding. Status information on a particular aspect. Non-moving inventory. For example. overdue payments and User Many users at all the levels. statutory information. the employee attendance information would be used by the personnel Table 8. The classification could be as shown in Table 10. The complexity can be handled if the information is classified on the basis of its application and the user. and its analysis. The deviations from the budgets. requirement versus availability. profitability standard. stocks receivables. Functional Functional heads. Purchases.USA . and pdfMachine . Quantitative information on the business status. the type of business. Middle and Management. Locations. Internal and external resources. the Top Knowledge Decision support Middle management operations management. payables. turnover and variety of the details of each one of these entities.
Production. the locations. the customer. it can be processed in seven ways. does not have a use elsewhere. in the form of planned versus actual. the market segment. Sales. Table 8. etc. it is advisable to store the data in the form of the database which will be used by the users for generating their respective information needs. therefore. The information for monitoring of execution schedules. Since the usage of the organizational information is at different levels for different purposes. Functional information is largely factual. so that the designer can provide a path from the acquisition to the generation and the storage. purchase. Marketing.USA . This information is used by a manager to plan and control his function. It is necessary. the product. and develop the information versus the user matrix.receivables.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. dispatches consumptions. the geographic zones. statistical and detailed in multidimensions of the function. etc. Commercial. viz. The production manager would use it for scheduling. sales. Section Officers. to map the information in terms of the data source. Operational and management Supervisor. The determination of the information can be done by taking each business function. and the sales organization structure. pdfMachine . This information is purely local to that function and by definition. Functional Information The functional information is defined as a set of information required by the functional head in conducting the administration and management of the function. The corporate planning and administration will use it for manpower assessment and control and manpower forecasting. rescheduling and loading of the jobs on the shop floor depending upon the persons present. For example. such as Personnel. if you take the sales information. the product groups. generation and usage. Operational Information on the production.4 Information Entity Employees Attendance Salary wages And overtime Human resources Information Matrix of of information versus User for a Personnel Function Manager Manager Manager Manager (Personnel) (Production) (Administration) (Accounts) X X X X X X X X X X Department for legal compliance of maintaining the muster recommended by the Factory Inspector.Sarras . The organizational information requirement needs to be studied thoroughly and critically as it is used across the organization.
quarterly. the marketing manager has a monthly targets of Rs 1 million order booking. say monthly. It is. Responsibility The managers in the functional areas of management are responsible for achieving the targets and accomplishing the goals and objectives. budgeting and controlling the operations of the function. the stocks of finished goods. for the customer order scrutiny the available stock. it would be necessary to inform him on these aspects at regular intervals.USA .Sarras . the responsibility and functional objectives. necessary to inform and update the information on targets at regular intervals to enable him to make or change decisions in his domain of operations. The manager would be assessed on the basis of responsibility he discharges in conducting the business. The raw material stocks.The functional information is normally generated at equal time intervals. Some of the business plan objectives are given below based on which each function in the organization derives its objectives. Since. half a million invoicing. he is responsible for achieving the targets. the terms of payment and the probable delivery is an information set evolved out of the work design of customer order processing. stocks and so on.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. the overall business plan objectives give rise to the objectives for each business function. etc. These information sets have a functional utility and required in detail revolving around several dimensions. the price. WIP. utilization. Such information is used for planning. " The total sales per month is Rs 10 million. production. The procedure of the order processing requires this information. Functional information is also used for assessing particular aspects of the business. For example. Work design For example. The functional information can be assessed on the following three parameters-the work design. For example. This information is used for the responsibility accounting and decision making for achieving the targets. Most of these targets are business targets such as the turnover. and not more than two months receivables. For example. for understanding the trend and making comparisons against the time scale. orders pending and payable throw light on the purchase function. receivables. Functional objectives Each function has its own objectives which are derived out of the corporate goals. and orders on hand throw a light on marketing function of the organization. pdfMachine . therefore.
Such information shows the trend of the activity or a result against the time scale. The decision may fall in the domain of top management or the middle management. and with reference to the functional goals and objectives. which measures the business activity and evaluates the performance on the key target areas. and with reference to the functional goals and objectives. The product is failing continuously on one aspect and the reason of failure is the process of manufacturing. Knowledge Information The knowledge information creates an awareness of those aspects of business where the manager is forced to think. decided and act. That information. whether the sales are declining and the trend is likely to continue in the next quarter. It highlights the deviations from the norm or standard and also any abnormal development which are not in congruence with the forecasts or expectations. Hence. The source of such information is the managers and their functional heads who together execute the business activity. The knowledge information may cut across the functional boundaries of the organization. which will affect the process of business significantly. the knowledge information supports the functions of the middle and the top management. necessary to inform the manager on the achievements of these targets on a continuous basis. The outstanding more than six months not to exceed Rs 0. In some situations the strategic decisions may be necessary to solve the problem. for consistency and at fixed intervals for updating the knowledge base. It would be determined by studying the work design and procedures and the responsibility accounting. The nature of this information is analytical and relates to the past. is the functional information.USA . Such information gives rise to business decisions. The capacity utilization should be minimum 85 per cent. pdfMachine . In summary.2 million. Such information pin-points the area or entity and forces the manager to act. For example. The action or decision may fall in other functional areas of business operations.Sarras . planned and implemented the business plan." " " " The finished goods inventory. The employee attendance per month should be 99 per cent. It is. the managerial responsibility accounting. The knowledge information is required by the middle and top management as they are the ones who have conceived. not to exceed Rs 1 million. The functional goals and objectives are necessary to achieve overall corporate achievements. It would be determined by studying the work design and procedures and the responsibility which the manager holds for the business performance. the functional information would emanate from the work design and procedures. Knowledge information is tracked continuously and reported in a fixed format. therefore.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Most of such goals and objectives are potentially achievable within the managerial and physical resources that the manager has at his disposal.
The decision support information can be determined for the company at the entity level leaving its use to the decision makers in a suitable manner. It contains business result and comparative analysis of the performance. The source of this information could be internal or external to the organization. the information on the non-moving inventory justifies the decision of its disposal at throwaway prices.Sarras . one for justifying the need of a decision.3 DETERMNING THE INFORMATION REQUIREMENT The sole purpose of the MIS is to produce such information which will reduce uncertainty in a given situation. The support may act in two ways. The difficulty to determine a correct and complete set of information is on account of the factors given below: 1. The moment what is unknown becomes known. It can be determined by identifying the tools.the current and the future. Methods have been evolved to handle the degree of uncertainty the management is expected to deal with. pdfMachine . These decisions are such that they make the routine administration of the business smooth and efficient. the decision maker’s problem simple.USA . The knowledge information is reported in graphic formats for a quick grasp and managerial response. change the job from one machine to the other. Information is used in a decision support system for model building and problem solving. The main purpose of this information is fact finding and taking such actions or decisions which will affect the operations at a micro level. For example. Decision Support Information Most of the information required by the middle and the top management is for decision making. and send a reminder to the supplier for the supply of material. The decisions may be to stay on overtime. used by the managers in the decision making. draw additional material. a problem solver and a decision maker. and the other as an aid to decision making. These decisions do not fall in the category of the managerial decisions.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Operational Information This information is required by the operational and the lower level of the management. techniques. The sources of operational information are largely internal through transaction processing and the information relates to a small time span and is mostly current. The information does not act as a direct input to the decision making procedure or formula but supports the manager in the efforts of decision marking. The capability constraint of the human being as an information processor. 8. models and procedures. The demand forecasts information aids in the decision on determining the economic order quantity for production or a sale. in two ways.
3. modeling and sensitivity analysis.Sarras .USA . what do you need ? Determine from the existing systems and methods of decision making and problem solving. When the user has to select one answer from finite set of answer a closed question should be asked. when the user has no precise knowledge but has an ability to determine all answer and to select one out of them? For example. pdfMachine . decision parameters and decision methodology. the answers may not be immediate but can be obtained by surveying the domain of knowledge of the user. They are: 1. If the uncertainty is low.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. In spite of these difficulties. Putting the questions is an art and it should be used properly to seek information. 2. starting from the low to the high level of uncertainty. Method Ask Questions such as. The nature and the variety of information. The ability of the decision makers to specify the information. “Which are the raw materials which can be used in a product?” In open questions. have been suggested. Table 8. 4.5. Based on the uncertainty scale the following methods. Determine through the critical success factors. Reluctance of decision makers to spell out the information for the political and the behavioral reasons.2. Determine through experimentation. High (Total uncertainty) Top management. “Which are the raw materials used for making a product?” But an open question is put.5 Methods of Handing Uncertainty Leval of uncertainty Level of management Low (Near certainty) Operations management. seeking information requirement or needs is easy as against a very high level of uncertainty. methods are evolved based on the uncertainty scale. Asking or Interviewing In this method a designer of the MIS puts questions or converses with the user of information and determines the information requirements. shown in Table 10. Precise probabilistic knowledge (A risk situation) Middle management Not able to determine in probabilistic terms precisely (Very risky) Middle and top management. For example. Asking or interviewing Determining from the existing system Analysing the critical success factors Experimentation and modeling. 4. There are four methods of determining the information requirements. 3.
theory and textbooks. This method is adopted when the rules and decision methods are outside the purview of the decision maker. group consensus can be sought to get the most feasible set of answer. manuals. hand books. for example. They are determined or imposed by external sources such as the Government.this approach is called the Delphi method. For example. Or in a service organization. the manager determines the information needs and the designer of the MIS can always fall back on the prescribed law books. and has been designed out of experience given straightaway the requirement of information. ninety per cent of the information requirement is common and the balance ten per cent may be typical to the organization or the business. which has been evolved after a number of years. The managers in the operations and the middle management use the existing system as a reference for determining the information requirement. Irrespective of the type of organization and business. the management of the technology becomes the critical function. handbooks. research studies which can determine the information requirement.. the Authority. Many times a function is singularly critical to the successful functioning of a business organization. In many situations. the management of service pdfMachine . a brain storming session is performed to cover all possible answer to the questions. the accounts payables. The manager of the shares department has very little additional information need. etc. the financial accounting. For example. In all these methods. in a high technology business. The fund of knowledge is available from the textbooks. the systems designer has to test the validity of all the answer independently. etc. etc. which needs to be determined separately.Sarras . the inventory control. the information required to manager shares of the company are determined through the rules and regulations laid down by the Company Law Board.When multiple users or several decision makers in similar functions or positions are involved. system from other companies can give additional information requirements. the pay roll. In all such functions. systems such as the accounts receivables. have well determined information requirements. Determining from the Existing System In a number of cases the existing system. to confirm the informational needs Analyzing the Critical Factors Every business organization performs successfully on the basis of certain critical factors. An experienced designer is able to analyze critically the answers given to the questions and to determine the correct information requirement. When several users are involved. the principles. Other factors are important and play a support role in the functioning of the organization.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.USA . The experts or experienced users are asked to give their best answer.
decision making and the understanding of the overall business activity. the information needs are determined as they have been evolved through the experimentation. enlarging the system scope and meeting the varying information needs.4 DEVELOPMENT AND IMPLEMENTATION OF THE MIS Having made the plan of the MIS.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Experimentation and Modelling When there is total uncertainty. and formalization in the system and procedures which determine the timing and duration of development of the system. The analysis of these functions or factors will determine the information requirements. Test marketing of a product is an approach of the experimentation to decide the correct marketing strategy. the designer and the user of the information resort to this method for determining the information requirement. greater is the stabilization of the rules.becomes a critical factor. the size of the system.USA .Sarras . The development becomes approach with certainty in inputs process and outputs. and each other’s needs are clearly understood and respected mutually. Prototyping is a process of progressively ascertaining the information needs. As discussed earlier the plan consists of various systems and subsystems. The choice of the system or the subsystem depends on its position in the total MIS plan. The experimentation would decide the methodology for handling the complex situation. the user understands of the system and the complexity and its interface with other systems. marketing and service become the critical functions. The real problem is the degree of structure. 8. The development strategy determines where to begin and in what sequence the development can take place with the sole objective of assuring the information support. The information requirements of such organizations largely relate to these critical factors. Determining the position of the system in the MIS is easy. pdfMachine . If the method is finalized. the development of the MIS calls for determining the strategy of development. Prototype Approach When the system is complex. The designer first develops systems independently and starts integrating them with other systems. the procedures. In a consumer industry. The information requirements determined through such methods undergo a qualitative change as the users get the benefit of learning and experience and the needs may undergo a change or get replaced completely. trying it out on a smaller scale with respect to the data and the complexity. Higher the degree of structured ness and formalization. it is observed that the user’s and the designer’s interaction is smooth. developing methodology. the development strategy is Prototyping of the system. Sometimes models are used for deciding the initial information needs and they are modified during the implementation stage. Here.
of all the personnel. the designer’s task becomes difficult. inadequacies in the prototype vis-àvis fulfillment of the information needs. A typical process of the system development through prototyping is given in fig. which is used in accounts and inventory management. pdfMachine .USA . The designer then takes steps to remove the inadequacies. questioning the information needs. The attitudes of the various users and their role as the originators of the data needs to be developed with a high degree of positivism. when there are multiple users of the same system and the inputs they use are used by some other users well. and all have to contribute as per the designated role by the designer to fulfill the corporate information needs. This process. MISSION. For example.ensuring that it satisfies the needs of the users.1 Information System Development Model. to appreciate that the information is a corporate resource. the personal boundaries do not exist. In the prototyping approach.1. therefore. streamlining the operational systems and procedures and more user interaction. and assess the problems of development and implementation. identifies the problem areas.Sarras . the departmental. This may call upon changing the prototype of the system. When it comes to information the functional.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Prototyping Approach. These calls upon each individual to comply with the design needs and provide without fail the necessary data inputs whenever required as per the specification discussed and finalized by the designer. a lot of input data comes from the purchase department. It requires. GOALS IDENTIFY INFORMATION NEEDS REFINE THE NEEDS MODIFY PROTOTYPE SPECIFICATION REVIEW DEFINE SYSTEM BOUNDARIES AND SCOPE DEVELOP AND TEST DEVELOP REVISED PROTOTYPE IMPLEMENT IN PARALLEL DEFINE SYSTEM OBJECTIVE INITIAL RPOTOTYPE IS THE USER SATISFIED ? NO TRAINING YES DEVELOP INITIAL PROTOTYPE SPECIFICATIONS DEVELOP APPLICATION WITH FINAL SPECIFICATIONS EXAMINE FEASIBILITY DOCUMENTATION Fig. 8. 8.
for significant modification. is the managerial task of the system designer. that is. Examples of such systems are pay roll. in overcoming the problem of changing the attitudes of the multiple users and the originators of the data. 10. if any.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. and they are very much structured and rule-based. Such system. requiring judicious application of and information technology.2. The choice of system design in the prototype and Life Cycle approach is decided on the basis of the nature of the system or application. Their emergence may be a sudden or may be a part of the business need. a definite set of outputs in terms of the contents and formats. order processing. The qualification. they have birth and death. and so on. SYSTEM APPLICATION PHYSICAL DESIGN INSTALL THE SYSTEM ASSESS FEASIBILITY SYSTEM SPECIFICATIONS CONDUCT AWARENESS AND TRAINING INFORMATION REQ. therefore. the state of art. helps considerably. as a corporate resource.Sarras . Apart from the core systems. therefore. They have hundred per cent clarity of inputs and their sources. The life cycle approach. you have a choice of the database approach versus the conventional system approach. Life Cycle Approach There are many systems or subsystems in the MIS which have a life cycle. share accounting. knowledge. You may also have choice of hardware and software. experience. and an understanding of the corporate business. finished goods accounting and dispatching.Brining the multiple users on the same platform and changing their attitudes towards information.USA . their role is important and needs to be designed from the view point as an interface to the Corporate MIS. some decision support systems can be developed through the life cycle approach. For example. Minor modifications or changes do occur but they are not significant in terms of handling either by the designer or the users of the system. have a life and they can be developed in a systematic manner. the online real time versus the batch processing approach. All these technical decisions are more situation dependent. These systems have a fairly long duration of survival and they contribute in a big way as sources of data to the Corporate MIS. These details more or less remain static from the day the system emerges and remains in that static mode for a long time. has a method of its own as explained in the fig.ANALYSIS PROGRAM SPECIFICATION OPERATE THE SYSTEM CONCEPTUAL DESIGN DEVELOP THE SYSTEM REVIEW AND AUDIT pdfMachine . Therefore. and can be reviewed after a year or two. basis financial accounting.
Scope of the design and the application is fully determined with clarity and experimentation is not necessary. No need to try out the application of the information as it is already proven. In the process of implementation. For a successful implementation he has to handle the human factors carefully.2 Life Cycle Approach to the Development of MIS Table 8. 8. therefore. The user is confident and confirms the specifications and the information needs. It bring about organizational changes. it affects people and change their work style. The system and application is highly custom oriented. Experimentation is necessary.USA .6 Comparison of Approaches Prototyping approach Open system with a high degree of uncertainty about the information needs. The process evokes a behavior Response which could be either favorable or unfavorable depending upon the strategy of the system implementation. Necessary to control the cost of the design and development before the scope of the system and its application is fully determined. rests with the designer. Life cycle approach Closed systems with little or no uncertainty about the information needs. Necessary to try out the ideas. pdfMachine . and a fear complex may get reinforced that the career prospects may be affected.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. the work design may make the new job impersonal. Table 8. The system remains valid for a long time with no significant change. the system designer acts as a change agent or a catalyst. On many occasions.6 shows the difference between the two approaches helping the designer select an approach. User of the system wants to tryout the system before he commits the specification and the information requirements. The user of the system has a certain fear complex when a certain cultural work change is occurring. Implementation of the management information system The implementation of the system is a management process. application and efficiency of the information as a decision support. Care has to be taken to assure the user that such fears are baseless and the responsibility. The design would remain stable. The first system has foremost fear is about the security to the change-over form the old to new is not a smooth one. The second fear is about the role played by the person in person in the organization and how the change affects him. The system and application is universal and governed by the principles and practices.Fig. the role may reduce his importance in the organization.Sarras .
5. In short. 3. 10. 13. 18. 8. pdfMachine . Not forget that his role is to offer a service and not to demand terms. is not that easy in the computer system as it calls for changes in the programs. Impress upon the user the global nature of the system design which is required to meet the current and prospective information need. Impress upon the user that perfect information is non-existent. The designer should not recommend modifications of the needs.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.There are certain guidelines for the systems designer for successful implementation of the system. Train the user in computer appreciation and systems analysis as his perception of the computerized information system will fall short of the designer’s expectation. 7. Remember that the system design is for the use of the user and it is not the designer’s prerogative to dictate the design features. 14. Realize that through serving the user. 15. 12. Ensure that the problems in the organization are resolved first before the system is taken for development. 11. 1. so that he is emotionally involved in the process of development. his role therefore still has an importance in the organization.USA . He should try to develop suitable design with appropriate technology to meet the information needs. Impress upon the user that he is one of the users in the organization and that the information is a corporate resource and he is expected to contribute to the development of the MIS. 6. 9. the designer should respect the demands of the user. which is easily possible in manual system. The system designer should. Not challenge the application of the information in decision making. Ensure that the overall system effort has the management’s acceptance. Hence. unless technically infeasible. 4. Not question beyond a limit the information need of the user. he is his best guide on the complex path of development. Conduct a periodical user meeting on systems where you get the opportunity to know the ongoing difficulties of the users. Not expect perfect understanding and knowledge from the user as he may the user of a non-computerized system. Enlist the user’s participation from time to time. the designer should be prepared to change the system specifications or even the design during the course of development. 2. Impress upon the user that the change. Impress upon the user that the quality of information depends on the quality of input which he provides.Sarras . Ensure that the user makes commitment to all the requirements of the system design specifications. 16. 17. It is the sole right of the user to use the information the way he thinks proper. Ensure that he appreciates that his commitments contribute largely to the quality of the information and successful implementation of the system. Not mix up technical needs with the information needs.
pdfMachine . system design. the factors internal to the user of information. Only correct transaction types are permitted in the system. unlike any other product. where the change is consolidated and equilibrium is reinforced. etc. assures valid information. this process is implemented through an external change agent. The second step is Choosing a course of action where the process begins and reaches the desired level. This change can occur in a number of ways. and eliminating the organizational problems before implementing the system.5 MANAGEMENT OF QUALITY IN THE MIS Information is a corporate resource. Quality. The first step is unfreezing the organization to make the people more receptive and interested in the change. system and procedures which generate such a data. Correct use of the formula or procedure and relevant data. Comments This achieves integrity of data with respect to the time period. Many a times.Sarras . and is being used for decision making. The significant problem in this task is the resistance to change. Only that data which meet the design specifications can be used. playing the role of a catalyst.7 ters Parameter of Quality Complete data of all the transaction Valid transacation and input data Quality Parame Example All invoices of the month. However. The resistance can occur due to three reasons. is not an absolute concept. Some parameters may have lesser importance in the total value on account of their relevance in the information and its use. processing design. and the management of the data processing function. it is possible to measure the quality of information on certain parameters. Ensures the validity of the data and in turn. persuasion.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. and the third step is Refreezing.Implementation of the MIS in an organization is a process where organizational transformation takes place. The quality of information is the result of the quality of the input data. Perfect quality just as perfect information is non-achievable and has cost-benefit implications. All vouchers of the month. act or law using complete data. and providing incentives to the users.7. viz. Its level is determined with reference to the context and its use. labour. The parameters which are generally considered are as shown in Table 8. know-how. Its quality information would adversely affect the organizational performance as it affects decision making. Accuracy and precision Assures that the results are accurate and precisely correct based on rule. The problem of resistance can be handled through education. and the user.USA . 8. as important as the capital. This itself can be achieved by improving the human factors. and participation.. such as a consultant. Table 8. All these parameter need not have a very high value in terms of the unit of measure. the factors inherent in the design of the system and the factors arising out of the interaction between the system and its users. The Lewin’s model suggests three steps in this process.
The assurance of quality is a continuing function and needs to be evolved over a period and requires to be monitored properly.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. pending position. and also subjecting it to audit checks to ensure the system integrity.Sarras . 2. run to run controls. Systems are developed with a standard specification of design and development. The system modifications are approved by following a set procedure which begins with authorization of a change to its implementation followed by an audit. designing a suitable computer system and ensuring its maintenance from time to time. Incomplete information forces the user to infer or interpret erroneously leading to a wrong decision. and refection and reasons. Due attention is given to the proper file selection in terms of data. The principles of the organization and structuring the organization to the specific needs of the function are a prime necessity. or family. documents. When we talk with reference to the MIS a number of issues come up and they are not the pdfMachine . The same thing is true for the development of the MIS. 8. 7.USA . All the input is processed and controlled. Timely information Meaningful and complete information. The quality of the parameters is assured if following steps are taken. If the relevance is appropriate. quality and groups. It cannot be assessed in physical units of measure. process control and access control. 3.Relevance to the user It should be relevant to the user for a decision making.e. Intermediate processing checks are introduced to ensure that the complete data is processed right through. with references. 5. Information on the sales dispatch. 11. Production information should be reported in terms of quantity. If the information is received late it becomes useless from a point of view of decision making. The user of the information is the best judge of the quality. 8.6 ORGANISATION FOR DEVELOPMENT OF THE MIS Proper people organization is basic to the management of any activity or function. 10. 1. The access to the data files is protected and secured through an authorization scheme. All updating and corrections are completed before the data processing begins. the quality required is high. fields and records) are subjected to validity checks. 6. periods and so on. Inputs (transactions. Utility of information and its relevance are the two other measures of quality. i. Back-up of the data and files are taken to safeguard corruption or loss of data. The quality of this important parameter is ensured by conducting a proper systems analysis. It should be given in a proper format. 9. Computer system processing is controlled through programme control.. 4. The system audit is conducted from time to time to ensure that the computer system specifications are not violated.
Depending upon the situation. Training. The major is sues involved are: 1. is a centralized function.Sarras . The centralized organization is also recommended when the information needs are more or less static. the organization structure of the MIS would differ from one organization to the other. In such cases.3 and Fig. of providing the information to the users. The question of centralization versus decentralization is resolved by assessing the status of information resource in the organization.e. but if it is a case of information resource management. 8.same in all the organizations.4). The type. Hence. Whether the function should be handled as a centralized or decentralized activity. In a centralized set. i. One can develop two models of the MIS organization (as shown in Fig.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. mainly on account of the variety of hardware. Fitting the organization of the MIS in the corporate organization. the reliance on the centralized set-up becomes a difficult workable proposition. however. the management style and philosophy of the management. the user of the information is free from the responsibility of designing the systems and also from deciding the hardware and the software. the information processing is based on the database management system. becomes the centralized function. the management of the database becomes the centralized responsibility and its use becomes the responsibility of users. The MIS functions in any organization would vary on account of the issues mentioned earlier and to that extent the variations of these two models would be the organization of the MIS. 2. and its variations can be further developed suitable to the corporate culture. pdfMachine . When such a situation exists. software solutions. problem solving and system development. the size and the structure of corporate organization becomes the basis for the MIS organization for handling the MIS function and management alternatives. a decentralized organization is more effective. In all such situations. The allocation of the hardware and software resources.USA . Therefore. the responsibility of acquisition of the data. its culture and the management philosophy. it will be decentralized organization. 3. the variations of these two approaches are found. In a decentralized set-up the allocation of hardware is a centralized decision but the collection of data and its processing becomes the user’s responsibility. However. When it is a case of information systems management then the organization of the MIS would be centralized. 8. if the information needs are varying and is more strategic in nature.. whether the status is the information systems management or the information resource management. hardware and software solutions are available. In a real life situation. 4. The maintenance of the service level at an appropriate level.
defined and designed in terms of the user’s requirements and its operational viability is ensured. the design of the MIS has such features which make up a user-friendly design. and highlights the factors and reasons for non-achievement. its use is more for the collection and storage of data and its elementary processing. The MIS recognizes that the different information needs for different objectives must be met with.Sarras .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Also adequate development resources are provided and the human and organizational barriers to progress are removed. Though the hardware and the software is the latest and has appropriate technology. These factors can be summarized as follow. The MIS recognizes that a manager is a human being and therefore. others do not. so that its open system design is modified according to the changing information needs. The MIS is kept under continuous surveillance.7 MIS: THE FACTORS OF SUCCESS AND FAILURE Many organizations use MIS successfully. which make it a failure. Factors Contributing to Success If a MIS is to be a success then it should have all the features listed as follows. The globalization of information in isolation from the different objectives leads to too much information and its non-use. the systems must consider all the human behavioral factors in the process of the management. An appropriate information processing technology required to meet the data processing and analysis needs of the users of the MIS is selected. The MIS is oriented. MIS focuses on the results and goals. The MIS is easy to operate and. MIS is not allowed to end up into an information generation mill avoiding the noise in the information and the communication system. There are some factors which make the MIS a success and some others. ! The MIS is integrated into the managerial functions.USA . ! ! ! ! ! ! ! ! pdfMachine . It sets clear objectives to ensure that the MIS focuses on the major issues of the business. therefore.8.
The function of the head of the MIS is to manage the information centrally as a corporate resource from the data to the Information and its technology requirement. group of individuals or In other words. therefore. OS. CORPORATE DBMS ASSIST USERS IN SYSTEM DEVELOPMENT TRAINING AND SUPPORT TRAINING AND PROBLEM SOLVING Note Fig. MAINTENANCE RUNNING DAY TO DAY OPERATIONS. 8. The major responsibility is the data management and the technology. BACK UP SYSTEM MAINTENANCE.3 Centralized Organizations of MIS. EXPANSION DECISIONS HARDWARE AND SOFTWARE MANAGING DIRECTOR TECHNOLOGY UPGRADE DECISIONS INFORMATION SYSTEM PLANNING HEAD OF M IS CENTRALISED SYSTEM DEVELOPMENT TRAINING MANAGEMENT AND DEVELOPMENT OPERATIONS. The MIS design.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. 8.USA . UPGRADE. Note Information is considered as corporate resource and hence generated centrally by the head of the MIS and made available to all the users on conditions and needs.4 Decentralized Organisation of MIS * Information is considered as a resource for a department. SOFTWARE MAINTENANCE Fig. * * Supplier of hardware. ! pdfMachine . The head of the MIS provides support to the users of the information in their task of Development. it is considered specific to the business function. MIS recognizes that the information needs become obsolete and new needs emerge.SELECTION. has a basic potential capability to quickly meet new needs of information. DISTRIBUTED OR DECENTRALISED DECISION MANAGEMENT OF HARDWARE MANAGING DIRECTOR MAINTENANCE OF HARDWARE AND SOFTWARE SELECTION OF HARDWARE SOLUTION HEAD OF MIS ADVISE ON HARDWARE AND SOFTWARE TECHNOLOGY SELECTION OF LANGUAGE. and solution.Sarras . software and applications.
Sarras . Adequate attention is not given to the quality control aspects of the inputs. The MIS then becomes an impersonal system. A belief that the computerized MIS can solve all the management problems of planning and control of the business. The MIS is developed without streamlining the transaction processing systems in the organization.USA . The MIS does not meet certain critical and key factors of its users such as a response to the query on the database.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. the process and the outputs leading to insufficient checks and controls in the MIS. The MIS does not give perfect information to all the users in the organization. certain assumption not known to the designer. The common factors which are responsible for this are listed as follows. and they have to play an important responsible role in the MIS. wrong codings and deviating from the system specifications result in incomplete and incorrect information. ! The MIS is conceived as a data processing and not as an information processing The MIS does not provide that information which is needed by the managers but it tends to provide the information generally the function calls for.! The MIS concentrates on developing the information support to manager critical success factors. Lack of training and appreciation that the users of the information and the generators of the data are different. lack of user-friendly system and the dependence on the system personnel. Lack of administrative discipline in following the standardized systems and procedures. Any attempt towards such a goal will be unsuccessful because every user has a human ingenuity. Factors Contributing to Failures Many a times MIS is a failure. bias. The MIS cannot up these by providing perfect information. an inability to get the processing done in a particular manner. It concentrates on the mission critical applications serving the needs of top management. ! ! ! ! ! ! ! ! __________ REVIEW QUESTIONS pdfMachine . Underestimating the complexity in the business systems and not recognizing it in the MIS design leads to problems in the successful implementation.
1.USA . it is better to study and improve rules. A good MIS is an integral part of the management system. User acceptance and dependence on MIS is a test of a good MIS. 9. Explain.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. When would you resort to prototype approach and when would you resort to the life cycle approach in the development of the MIS? 7. Why so? What would happen if it is not? 10. What problems does the system analyst face in ascertaining the information requirement at the various levels of management? How are these problems tackled? 5. Why is a long range plan of MIS necessary? How it linked with the business plan of the organization? 2. policies. and explain the nature of use in each case. 4. In the guideline given for implementation identify the guidelines where user is involved. Before a full scale MIS development plan is undertaken. When should the analyst resort to prototype experimentation for judging the requirement? How is modeling used in this approach? 6. 8.Sarras . procedures and practices. Draw a matrix of the class of information versus users. How would you ensure that the user related issues are taken care of while designing the system? pdfMachine . What are the content of the MIS plan? What is the purpose of each of them? 3.
where it is required to decide between the various configuration alternatives made of a variety of hardware and software option. in terms of the cost and also in terms of comfort. Besides a house should have a privacy. The modern information technology offers a number of different system configurations. providing all capabilities of the data and the information handling with flexibility and speed. Through the cost of construction is a major decision parameter. affects the buyer for the lifetime. The information technology decision. each being a candidate. Just as the MIS handles the decision support applications. a wrong choice of the IT would kill a good MIS design as the information technology would not support the user on the aspects and the requirements such as speed. the choice of the Information Technology makes a qualitative difference in the decision making process.Sarras . many other factors such as the living comfort and convenience. and the front end and the Back Office Systems. It is a strategic business decision and not a financial decision to be taken on the least cost approach. Internet/Intranet. The information technology affects the people. accommodation of the family members with their respective living styles. making long-term impact on the effectiveness of the MIS of the enterprise.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. etc. autonomy and integration of the information processing on the different hardware software platforms. OOT. The choice of IT is a strategic decision. as a vehicle. the Mini or the Superman.1 NATURE OF IT DECISION A business enterprise or an organization requires making a decision of choosing appropriate information Technology (IT). response. The decision is usually irreversible and very costly. to handle the management information system. pdfMachine . It could either be distributed or centralized.USA .CHAPTER-9 CHOICE OF INFORMATION TECHNOLOGY 11. Client Server Systems. A wrong choice of house. as a solution to satisfy the needs of the MIS. Hence. The choice of information technology can be compared to a decision of constructing a house. It could be a conventional data processing approach versus the database management approach. access. therefore. A wrong choice of the information technology would also kill the MIS designer’s ability to develop a user-friendly end user computer system. The configurations could be evolved on the basis of the approach to the information processing. etc. should be aesthetic to look at. the processes and the productivity of the organization. and may not satisfy all the needs of the members of the family. security. both. are equally important. local processing or centralized processing. airy and well lit and also the maintenance of facilities and utilities should be easy. The configurations are the LAN or the WAN. is a technical decision. therefore.
pdfMachine . the UNIX. therefore. The information technology decision is also influenced by people-related factors. the HP UNIX. since the personnel are of the higher skills. demand a certain operating system as a critical requirement. the communication requirement becomes a dominating factor in choice of the information technology.USA . a Network or a mini system. Windows NT.e. hardware and software support in also required. has to be weighed on some other criteria for its selection. the MOTIF. Each of these platforms may have different operating systems.Sarras . The third reason is the different operating systems for the different platforms. Another important factor which influences the information technology decision is the organization and its infrastructural arrangement of the offices. then many times the hardware becomes a no option decision. then many times the hardware is critical. the nearby factory may need a mini computer system and the corporate office would need a large Superman computer with special software suitable for its functioning. etc. In such situations. the warehouse may need just a PC or a PCLAN. the MOTOROLA or the PROPRIETARY Chip such as the ‘Alpha’ of the Digital and the POWER PC of the IBM. and.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. and the programmers so that these two platforms become ready to share each others resources effectively. and the ORG UNIX. i. Some software option is efficient on one hardware platform and not on the other. therefore. warehouses. the DOS. The wide cost spectrum results due to the different architecture options in the hardware such as the RISC. For example. etc. the CISC and the different processing chips such as the INTEL.Each configuration has certain technical merits and demerits. PC systems would be an automatic choice or a dumb terminal of the main computer system. the drivers. an important dimension to the choice of the information technology. Much organization would demand hardware typical to that particular location and also be able to communicate with other hardware-software platforms. the VMS and their proprietary versions such as the Ultrix. so if the software is critical. capable of offering different software solutions. In such a place. the OS2.. But at the factory location. Many a times. the operational feasibility problems are solved by writing the system utilities. and the MIS of such an organization requires data and information sharing between all these resources at various locations. factories and the customers. The choice of the information technology is made on the basis of the ability of the people in the organization to run the hardware-software system. would be required. The information technology decision must consider the communication problem and the interface between the two hardware options so that the data sharing is operationally feasible. grade and qualifications. the OSF. The software options. Several probable configuration options are further influenced by the available software running under each of the operating systems. Each one of them covers a wide cost spectrum. at such a location. The place like warehouse may not have highly qualified computer literate personnel and.
disk and communication are decided on the base of processing needs of the mission critical applications. the manner in which it will be conducted and the information needs of the organization to conduct the business. The hardware choice and its configuration in terms of memory. and for presenting on the different output devices such as the laser printers and plotter.1. Such an application would need resource sharing at different locations-of hardware. Finally the information technology choice is governed by the requirement of the mission critical application(s) of the organization. this decision has long-term business and financial implications and affects the entire organization.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The information technology decision. The work culture and the people culture become the critical decision inputs for any information technology decision.Though training the personnel to become computer literates is a solution to such problems it may not be always possible and operationally feasible to solve such problems and give a high-tech information technology solution which is uniform across the organization. therefore. Since.USA . and also on the storage devices available at the different locations. then the mission critical application is the inventory management of a variety of items manufactured and distributed at different locations. If the organization is under a financial pressure as the budget is not adequate to implement the best information technology opted for should be upgradeable. it is a strategic decision. pdfMachine . Such a probing in the futuristic needs helps to size up the various options and to weigh them critically on the various criteria. The other requirement of the organization is to be fitted to this configuration. software and database. It requires some valid assumptions about the growth of the business. For example. The sharing of each other’s resources may be for input acquisition and processing for integrating the data on a higher plane and sending the result to different locations. is a decision to be taken at a particular point of time and implemented over a period of time considering the various soft and hard options experienced from time to time. expandable and scalable. The nature of IT decision is complex and is governed by a number of factors as shown in Fig. Hence.Sarras . 11. if the main business of an organization is service to the customer. the decision is influenced by the technology forecast and the business forecast. Such organizations can start with a smaller configuration and migrate to a bigger one with no risk of technological obsolescence no loss of development effort. It could be a case of sharing between the UNIX DP network and the minis with different DBMS systems. The information technology decision is made for the current needs as well as for the futuristic needs of the organization.
If the decision processes are centralized at a higher level and the delegation of responsibilities and authorities is not proper.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.11.USA .2 STRATEGIC DECISION The information technology choice is a strategic decision and. In such cases the typical nature of the concerned SBU will decide the hardware-software platform for the particular location.Sarras . where the acquisition. These factors are discussed at length in the following sections. organization infrastructure and satisfying its information needs which influence the information technology decision. the information technology choice will weigh in favor of those systems. then the information technology choice will weigh heavily in favor of the distributed data acquisition systems and the centralized high end information processing systems for decision support. The information technology offers a number of alternatives which have varying costs. If the decision processes are decentralized. analysis and decision making will be at distributed nodal points. therefore. processing. such as data management. The costs differ due to the difference in the architecture of the hardware. Apart from the cost factor there are other factors. The organization which operates through a number of locations and on the basis of the Strategic Business Units (SBU) will opt for such an option. pdfMachine . Management Process or Style The information needs of the people in the organization arise from the process or the style by which the management ‘runs’ the business. capability of the software and different configurations but achieving more or less the same results. The quality of management process depends on the people culture and the culture predominantly affects the decision making process. it should be taken after considering a number of factors.
The information technology choice is largely governed by the information needs of that particular location or function. (b) The decisions affecting the execution and control of the business. The entire management process revolves around this application. In such cases the information technology choice will be in favor of the distributed high end data processing systems and the dedicated information processing system at the decision centre using the distributed data bases. the information technology choice would be the Front End Processing System connected to the Bank Office Central System. where the business operations are typical. based on the requirement of these applications serving the critical business functions. The transactions are large in number and need to be processed very fast. manufacturing. The choice of hardware details and the software mix will be decided on these factors. voluminous and their information needs are largely transaction processed. hospitals and large corporate bodies are the examples. Due to the organizations’ infrastructure and also due to the nature of the business it so happens that there are data centers. fall into this category. The information technology choice in such cases would be the one which satisfies this need the best. pdfMachine . while the back office systems take care of the strategic and the operations planning and control of the business. the insurance companies. Hotels. The decision making process is rule based governed by the policy and the guidelines issued by the statutory bodies in the banking industry.Sarras . then the information technology option would differ. etc. therefore. therefore. the decision making style and the mission critical applications as the important dominating factors.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. every business has one or more mission critical applications serving the information needs of the critical strategic decision. The organizations’ information technology choice is. The typical example is that of the banks where the banking operations are uniformly standard at almost all branch locations. etc.If the decisions in the organization are of the following types. In other words. Many service oriented business like the banks.USA . Business Operations There are many organizations. decision making is concentrated at one business location or in one of the business functions such as marketing. research and development. important to note that the information technology choice considers the management process. In such cases. the business organization. There is other business situation where due to sensitive nature of the business. The front end systems take care of the operations management. (c) The strategic business decisions. It is. These types are: (a) The decisions affecting the operations management. where a large umber of transactions take place and these are the decision centers. where such a choice is desirable.
in such case. such as drafting. The hardware details in such case will be decided based on the data volume.USA . 11. the inventory related decisions are taken.In a Hospital. If the information technology choice does not satisfy the critical twenty percent need.3 CONFIGURATION DESIGN The details of the information technology. inventory management is the main business function here. The information technology choice. and operating system are also strategic to the success of the pdfMachine . such as architecture. etc. The information needs here are largely the patient and doctor-oriented.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. where the transaction processing is very low. There are certain business organizations the operations of which are such that if the organization takes care of one or two major functions. will be of the front end processing system supported by the back office mini or main frame system with a strong database system which is very powerful in data management and the query processing. stocks are adjusted and the procurement action is also taken quickly. a lot of engineering and design activities. storage media. then it can be said that the information technology choice is a strategic mistake with concurrent business and financial implications. communication. In all the business twenty per cent information set is critical and eighty per cent is not so critical. Hence. modeling and analysis take place. then the information technology choice will be based on the integration possibility of the different information technology platforms satisfying the organizational information needs. For example. Such a function would need special hardware such as work stations and special CAD/ CAM/ CAE software. in the high-tech engineering organizations. The information technology choice therefore is strategic to the business performance. If the organization requires mix of such special hardware and software. The information technology choice in such cases would be based on the feasibility of sharing the resources and data of the two locations and having special application and information needs. most of the information needs and the MIS needs would be satisfied. the information technology choice may go wrong. RDBMS. The information technology choice in such case will be the one where the sales and the receipts data is processed very fast. Many a times these functions are special and would be demanding special hardware and software. the decision making need is satisfied by query type applications. The business here operates mainly on satisfying the needs of the buyers by providing them what they want. Suppose there is an organization the main business of which is marketing of a variety of product through a nationwide distribution channel system. the speed and the communication systems.Sarras . designing. A number of such possibilities emerge and unless these factors are properly considered. However the data processed by such hardware-software system needs to be integrated in the business and commercial systems of the organizations.
Query processing The decides the SQL or standard SQL and 4GL. memory and the processing architecture. Process speed The speed needed for processing will decide the CPU. All RDBMS are not same and are not equally efficient on all the platforms. I/O operations These would decide the controllers and the speed of I/O processing. Image and Voice.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. and the level of security and the integrity required. then the software such as the TCP/ IP needs to be considered. The details are worked out based on the following features: Data type Words. Communication protocols If different platforms need to be connected. RDBMS and 4GL These will be chosen on the basis of the volume.MIS. Data sharing If the data is to be shared across the databases. These details are carefully worked out for effective implementation of the information technology. then the storage capacity will be decided based on the size of the databases. The hardware and software should be capable of handling these data types.USA . Data volume The online storage capacity would be decided based on the processing needs. It will be further increased due to the disk mirroring. Numeric. pdfMachine . special handling of the data.Sarras .
we can say that the configuration of the computer system is designed. pdfMachine . Technical Evaluation 2.Interface and gateways These will be decided on the basis of data transfer needs between the locations and between the hardware-software platforms. the successful connectivity of the different hardware platforms.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The hardware and operating system will be decided based on this need. The information technology choice is translated into a variety of details based on the above factors.USA . These dimensions are as follows: 1. often. Security and Integrity The level of security and integrity required will decide the hardware. Languages and packages The requirement. Several configurations are possible and they need to be thoroughly evaluated before selection. All the hardware and software do not satisfy these needs fully. the software and the operating system. The selection criteria for evaluation would have different dimensions to be satisfied simultaneously.Sarras . is of a special language and packages besides the main software. such as data transfer needs.4 EVALUTION As we develop different choices of information technology and its configurations. When all these factors and the associated choices of the information technology details are worked out. 11. Operational Feasibility 3. the decision making enters into the evaluation phase for selection. Financial Consideration Technical Evaluation (TE) Technical evolution deals with the testing parameters. and the degree of meeting the overall system performance standards. the response level.
The issues like the centralized versus distributed.Technical evaluation can be carried out first by studying the literature of the product in detail and then by conducting brain storming sessions with the vendors’ specialists. Copying Devices " RDBMS. X Terminals Work Station " Network and Cabling. Processing Architecture and Capabilities " Servers " Terminals-PCs. Utilities and Compilers " Media. The bill of material of hardware and software can be worked out with the help of these norms. " Memory and Cache " Disk Capacity. Interfaces. Following hardware software details are configured and the quality of each item is also decided using the norms developed in a live experiment. the network versus the mini or the superman are also evaluated. The bench marking studies could be at a ‘raw’ level where you test the vendors’ specifications. pdfMachine . E-Mail " Network Hardware " Output Devices " Monitors " Operating System " Standard: ASCII. Internet and Intranet " EDI. In this phase a number of doubts are clarified and the vendors’ claims in the areas of the system performance are confirmed. GUI "Hardware Architecture " System Software: OS. Gateways. the specifications are put to test on a live platform. You may develop a mini representative processing application and run it on a model configuration of the system. i.USA . ANSI.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.Sarras . the online versus the batch versus the real time. FEATURES " Packages Technical evaluation and confirm the information technology approach to the information processing needs of the organization..e. Such experiment would confirm the vendors’ claims and your expectations and needs. Once these are confirmed. The decisions on the following points would facilitate the system configuration for a given requirement. Drivers. Technical evaluation can then be planned by scheduling the activities such as the bench marking for a couple of key parameters. the technical specification are tested by running live data in a particular format. Technical evaluation also helps in narrowing down the hardware choices as all the vendors may not satisfy the requirement of the organization. Such an experiment would be a prototype model of your information processing need related to the mission critical applications. Controllers " CPU Speed. Features. This would develop certain norms which can be used to configure the hardware details and building the architecture.
Having narrowed down the hardware configurations to two or three options, the technical evaluation considers the performance related issues such as reliability, dependability, performance on the volume scale, security, integrity and autonomy, etc. All the option may not equally satisfy the evaluation standards set by the organization on these factors. The performance related issues will help fine tune the configuration details such as the memory, the number of ports, the specific input and output devices and the hardware infrastructure. Technical evaluation also helps to break down the hardware on a time scale, i.e., the minimum required in the initial stage and subsequent add-ons, expansions and upgrades on a time scale. In technical evaluation we are discussing information technology. The information technology is constantly under development and the scale on which such improvement takes place is phenomenal. Hence, it is necessary to select the latest technology in all areas of information processing as it would take you a long way and help you to protect the investment. The investment is protected, if the Information Technology choice is scalable, upgradeable and also expandable with the growth of the business. Operational Feasibility The options approved after the technical evaluation are tested on the operational feasibility. What the technology offers may not be possible to operate at the practical level and scale to obtain full benefits of the various inherent features. The operational feasibility evaluation considers the people-related issues and whether the systems and the procedures of the organization are complementary and conducive. In a number of situations, the choice of technology determines automatically the caliber, the competence, and the knowledge of the people in the organization. It is also observed that the organization does not provide people support to implement technology successfully. The shortcomings on peoples’ side would be the lack of requisite qualification and the subject knowledge, the ability to absorb the technology, and use it effectively. Many a times, the organization would require appointing a new set of personnel to fulfill these needs. Other areas affected would be the systems and the procedures currently operating in the company. The shortcoming is observed right from the absence to the inefficient systems and procedures. The modern information technology needs sophisticated back-up of the data at a requisite point and time. If such a data support is not available then the information technology would be underutilized or may not be worthwhile to implement. For example, the information technology offers a solution of fast data transfer and processing between the two platforms at two locations, i.e., the data source is at one location and its need is at two other locations. Due to the systems and the procedures prevailing at the source location, the arrival of the data at the required location is late and hence not useful. Hence, the information technology solution is operationally infeasible to obtain the best of the solution.
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Most of the issues in the operational feasibility evaluation are related to the people and business processes (system and procedure). The environment must support proper implementation of a new information technology. If the environment does not support the new technology, it will be managerially prudent to choose next best option by obtaining full benefits in its successful implementation and further at a later date to switch over to the original best option. Financial Evaluation All the option can be evaluated in terms of the invested it calls for. It is always possible to rank the option on the basis of the basis of the investment. All business investment is evaluated in terms of return on the investment (ROI) or certain payback period. They are also judged from budget considerations. The information technology investments are difficult to judge on the ROI basis as some aspect of the investment are intangible and are difficult to quantity in monetary terms. The best approach in such cases is to judge the investment in terms of the value of information it gives on an incremental scale. If the value of information in relation to its investment is not significant, then it could be advisable the consider the next best lower investment option. In regard to the budget restrictions, it would be advisable to examine the possibility of scaling the hardware and the software options. It is then possible to have a solution implemented in terms of the budget provisions. The scaling can be done in terms of the quality of hardware required in the option. If may be possible to buy the requisite minimum in the first year and expand them in the subsequent period. It may be possible to configure the hardware in terms of the capabilities which are required now and which can be acquired later on. For example, one can start on 32MB memory and over to 64MB. One need not buy all the software in the first place. It can be phased out in terms of need, i.e., purchased the requisite software as and when required. The budget restrictions can handle by taking the benefit of the scalable and the upgradeable technology. The scaling of the expansion can be done on two scales, viz. horizontal and vertical expansion. The horizontal expansion relates to the quantity while the vertical expansion relates to the quality and coverage. Horizontal expansion The memory, disk, terminals, peripheral equipment, etc. can be configured for the present needs and then expanded as the coverage increased. Vertical expansion
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The system integration, backward or forward, concentrates on the mission critical applications, covering only the main key business functionalities. However, in all these matters the total decision is to be taken first and then broken down into components and in terms of the budget provisions for the next two years or more. In all these matters, a thought should be given to protect the information technology investment. If certain technological advances are round the corner, then it is better to defer the investment. The choice of hardware and software should be such that it should facilitate the integration of new technology into the old one. The new version of upgrades should be independent of the hardware. The application languages should be such that any open system can absorb it without many changes. The software choices should be independent of the hardware configurations such as the LAN, the WAN, the MINI etc. Many a times, the packages cannot run on all the platforms because of the chip and the architecture of the hardware platform. The open system architecture is not always that ‘open’ to accept all the software. These issues should be discussed squarely so that the investment though good at a point of time is not wasted at a later date. 11.5 INFORMATION TECHNOLOGY IMPLEMENTATION PLAN
The implementation of the information technology is a complex task and needs a detailed and careful planning for successful implementation. It is necessary to prepare a plan of implementation covering the following features. These features are: 1. 2. 3. 4. 5. 6. Site preparation System development plan Information technology installation schedule Recruitment and training of computer personnel Training of the users Investment plan
Site Preparation This is a major activity, wherein you prepare the site for the physical installation of the hardware i.e., the main computer system, the peripherals, the electrical and communication cabling, the air conditioning system, the tape-disk consumable storage, and the office layout for the professionals. The space allocation for each of these items is based on present need with some allowance for the future. The modern information technology needs site preparation at the user’s end as well for the convenience and the ease of operations. Most of the information technology installations need infrastructural facilities, such as a conference room, and training-cumpdfMachine - is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.Sarras - USA
It also needs to be linked with the information system development plan to synchronise the installation with the user of the hardware and the software. and in-change of the information technology implementation would be ideal for a planned site preparation activity. Information Technology Installation Schedule This schedule gives the item-wise details of the hardware arrival and its installation. Many times the schedule also considers key issues like data conversion. A broad system development plan would go a long way preparing the operational and implementation plans of the information technology in the organization. This would help to make a long-term financing plan. This process of site preparation takes away 10 to 12 per cent of investment. System development plan priorities the various steps in the site preparation. A system development plan also helps you in planning the other activities such as recruitment and training. guidance is available from the hardware vendors. System Development Plan This is generally prepared while assessing the hardware and software needs.USA . tools of development and also acquiring the precise know-how on the emerging technologies and its application in the information systems. In all these matters. Such a plan gives the indication of the various locations of hardware in terms of quality and time when needed. The skills may fall in the area of languages. pdfMachine . architect and interior designer. Such schedule also helps in the smooth transition from old to the new. rewriting programmer for new software environment and so on. testing and acceptance. switching over from an old system to a new system. One can make a site preparation plan for an immediate need and also for a later date. Such a recruitment and training then calls for restructuring of the information technology organization.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Recruitment and Training of Information Technology Personnel The implementation of the information technology needs specific skills in the manpower responsible for effective implementation.demonstration room with the modern aids of training. There are occasions where the skills are not available and a specific recruitment is called for. It also helps in deciding the procurement plan of the hardware and software. It may be from one information technology to another information technology environment or from the manual system to the computerized system.Sarras . A committee consisting of the vendors’ representatives. The technology is changing at a very fast pace and it is necessary to upgrade the skills of the existing manpower by providing a need-based training.
would help in obtaining the approval.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. One can fit the investment in the budget provisions by suitable modifications in the implementation plan of the information technology. It is a critical. If there are any bud-getary limitations. With the support of the information technology. the management would look at it from the return it yields in the business. Many software packages are available which need to be learnt for its appropriate use to become IT literate. Such training is imparted across the organization to the workers. The users should be trained to blend the information support in their day-to-day activities. It is a qualitative cultural change and it is. A presentation of an hour and a half to the top management highlighting the investment. Since. The training may range from awareness to learning of the specific tools. Investment Plan When all the facets of the information technology implementation are ready.Sarras . the productivity gains and the competitive edge that the business of the organization acquires through the information technology. it is better to postpone the implementation.5 CHOICE OF THE ‘INFORMATION TECHNOLOGY’ AND THE ‘MANAGEMENT INFORMATION SYSTEM’ The choice of the information technology is a backbone of the Management Information System. its involvement and support in implementation of the information technology. Summarizing the estimates on the time scale would generate an investment plan. 11. at the most it can be deferred but cannot be curtailed.Training of Users The latest development in the information technology requires its users to be well trained for its effective use. A carefully worked out investment plan should be submitted for approval with the implementation plan of the information technology. The users should be trained to use the various information technology facilities. the processes and productivity and helps organization emerge with a new work culture. Since. strategic decision affecting the business operations and prospects. The users should be trained to accept the concept of end user computing. pdfMachine . executives and the managers. It affects the people. It is a change in work culture and an appropriate attitude needs to be developed for the absorption of the new information technology solutions. therefore. the investment in the information technology is strategic.USA . It is important to note that the intermediate information technology solution to save on the investment is not effective. officers. it is a high investment decision. it is possible to work out the monetary implications such an implementation. the user is becoming a knowledge worker. necessary to prepare the user for this transformation through a comprehensive ‘User Training Programme’.
__________ REVIEW QUESTIONS 1. the implementation of the information technology could be slow on the time scale to accommodate a certain critical constraint. How does the work culture. How would you handle it for smooth changes over from conventional to technology-based management? 8. the best information technology would fail in its implementation. management style and the organization’s learning capability have a bearing on the IT or MIS decision? pdfMachine . What are the technology decisions? And what is their relevance? 3. MIS implementation is use of IT in business processes is a cultural change in the organization. The selection of information technology is a strategic decision in MIS development. what care should be taken so that the investment is protected for a reasonable period of time. upgradeable software.The success of the MIS lies in how the information technology is implemented in the organization.USA .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. To protect the investment in the information technology. adversely affecting effective development of the MIS. application development effort is not wasted and organization is not required to learn a new technology again and again. Why is the operational feasibility of the IT system important? 6. Top management always asks for return on investment (ROI) made in IT. A lot depends on the people and their ability to accept the new work style and the new work culture. If the human face of the organization is not properly aligned to the information technology. What methods are available to contain the investment in IT to the budget availability without compromise on the plan or quality of the MIS? 7. Which are the three parameters used in the evaluation of the IT before decision is made? 5. Hence. 2.Sarras . How would you calculate ROI in IT? What other measures would you suggest for evaluating the investment in IT? 10. the selection criteria should include features such as scalable architecture. but it should not be allowed to adversely influence the information technology decision itself. There is a risk in manipulating the information technology beyond a limit to suit the personnel of the organization or the budget limitation. an open system environment. Technology obsolescence is a fact of life when it comes to IT. communication capability through gateways and interfaces and so on. The information technology changes are very rapid. Explain. What is a configuration of IT platform when it comes to MIS? Why should the configurations be determined? 4. A good management information system design requires a matching support from the information technology. All the implementation of the information technology leads to organizational transformation in the content and structure. 9. While deciding configuration.
is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The calls on the information are continuously made till the decision maker is fully satisfied. as inputs.CHAPTER-10 Decision Support Systems-I 10. because of its rule base structure. The quantum and the scope of information also changes depending upon the risk in decision making. viz. and requires every time the user to go through the decision making cycle as indicated in the Herbert Simon Model. In the following three phase cycle. analysis and choice of decision making are predetermined. more the information sought. The decision support system helps in making a decision and also in its performance evaluation. you may use inquiry. and models or accounting system to come to a rational solution. While in Nonprogrammable decisions. we know that there are two types of decisions. As explained earlier. The higher the risk. the rule are not fixed or predetermined. The choice of selection criterion varies from problem to problem. The decision support refers to a class of systems which support in the process of decision making and does not always give a decision itself. The programmable decision.Programmable and Non-programmable.Sarras . required to go through these phases again and again till a satisfactory solution is found. the model has three phases. when same or similar types of decisions are to be made. Intelligence. These needs are such that wider additional demands on information would be made. It is therefore.USA . the moment a piece of information is received. These systems are helpful where the decision maker calls for complex manipulation of data and use of several methods to reach an acceptable solution using different analysis approach.1 DECISION SUPPORT SYSTEM (DSS): CONCEPT AND PHILOSOHY Decision Support Systems are an application of Herbert Simon Model. Design and Choice. analysis. pdfMachine . The decision support system basically helps the information system in the intelligence phase where the objective is to identify the problem and then go to the design phase for solution. The reason for changing the demands is also because the methods of decision making undergo a change from time to time. processing methodology. These systems can be used to validate the decision by performing sensitivity analysis on various parameter of the problem. In decision making. The nature of the decision is such that the decision makers need a variety of information. Decision support system can be built around the rule in case of programmable decision situation. can be computerized.
But. Information analysis system In this system. the MRP systems are examples of this system. The choice of a model depends upon the complexity of decision making. input to the system is from the database. Database The decision support system needs database(s). The use of simple data processing tools and business rules are required to develop this system.Sarras . these processes are not structured and. choice etc. Accounting system pdfMachine . If the status is known. The decision makers use these reports for assessment of the situation for decision making.e. The sales analysis. the market research analysis. the data is analyzed and information reports are generated. The system calls for several inputs from database(s) for decision making. vary. The reports might be having exceptions as a feature. 4. 2. the decision is automatic. Simple models The systems use simple models of decision making. 3. 3. the inventory analysis and the personal inventory systems are examples of the analysis systems. for decision making. the status and solution is unique relation. It does not call any elaborate computations. therefore. The only change is that a different set of information is sought for the use of different models.. Data analysis system These decision systems are based on comparative analysis. Status inquiry system The number of decisions in the operational management and some at the middle management are such that they are based on one or two aspects of a decision making situation.USA .Attributes of Decision Support System 1. flexibility The systems are flexible so that any semi-structured or unstructured decision making situation can be tackled with ease and speed. 2. The use of information being common. analysis. i.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. and use of a formula or a logarithm. the accounts receivable systems. The cash flow analysis. Types of Decision Support System 1.
2. The product mix decision. are one time and infrequent and provide general guidelines for operation or management. and also the tools and techniques of management. the hardware and the type of user as shown in Table 10. and the resources or asset or facilities planning systems are the examples.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The decision support systems are developed in isolation and from an independent system subset of the management information system. science and engineering. 4. Some more facts about Decision Support Systems. 5. pdfMachine . Model based systems These systems are simulation models or optimization models for decision making. These systems account items such as cash. The decision support system uses the principles of economics. the material mix.These systems are not necessarily required for decision making but they are desirable to keep track of the major aspects of the business or a function. These decisions. let us take the example of Materials Management function and the variety of the decision and the type of systems used therein to support and examine the decision We can further analyze these systems in terms of the input source. generally. and personnel and so on and relate it to a norm or norms developed by the management. The contents of these systems are more data processing leading to formal reporting.USA . 1. The decision support systems are developed by the users and System analysts jointly. The most common use of the decision support system is to test the decision alternatives and also to test the sensitivity of the result to the change in the system and assumptions. for control and decision. The data used in the decision support system is drawn from the information systems developed in the company. 3. In order to illustrate these decision support systems. inventory. The data and information for the decision support system are used from the internal sources such as the database and the conventional files. 6. with exceptions. 5.Sarras .1. if necessary. the system. the job scheduling rules. and from the external sources.
they can be used by the decision makers. A regression models shows the correlation between one or more variables. The origins of these tools and models lie in the Business Management. A fair assumption is made that the model has business and decision making validity. The second advantage of such system is in focusing on the critical issues in business. The most significant advantage of the decision support system is its use in sensitizing the decision and assessing its implications on the result or business performance. where the management has to make a decision based on the analysis of business statistic. forecasting.10. can be put in the from of the business models. Since. The range of packages is available from the PC main frame computer systems. These types of models are largely used in process control. It also helps in identifying the influence of one variable on the other. 10. These packages are hardware independent and have proven the application areas. whenever the need arises.2 DSS: DETERMINISTIC SYSTEMS There are a number of situations. Type of Tools/Models The decision support system can be based on the different types of tools and models. Most of these decision situation are fairly structured and. Behavioral models These models are useful in understanding the behavior amongst the business variables. They undergo a change over a period of time. The decision maker can then make decisions giving due regard to such behavioral relationships. The tools and the models are generally standard but have to have a custom design to suit the organization’s specific needs in the specific situation. the organization would have the database information. the Management Science and the Operations Research. The packages are available on popular network systems. a flexible approach is taken to solve varied decision making problems. While designing the models.1. therefore.Sarras .USA . If the management can design such models duly tested. as a number of computer based software tools and packages are available at a very reasonable price. and the statistical analysis models belong to this category. manufacturing. The decision support systems based on such tools or models have found extensive use. All such tools and models act as the support systems for decision making. They are as given in Fig. agricultural pdfMachine . 1. as well. The trend analysis indicates how different variable behave in trend setting in the past and hence in the future. Some are universally known and proven tools and have application in the Business Management.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. these decision situation draw data from the database(s). The third advantage of the decision support system is that it provides higher management ability to delegate decision making to the lower level once the tools and the models are tested. The trend analysis.
One can develop a model for selection of vendor for procurement of an item. Some of these models can be used straight away in the design of the decision support system. accounting and econometrics. the budgetary systems. 2. the cost accounting systems. the control of inventory through the maximum-minimum levels. based on the complex logical information scrutiny. most of the procedure based decision making models belong to this category. the MRP system. Management science models These models are developed on the principles of business management. psychology and marketing.USA . which can be converted into the decision support system models. Since. methods of calculus. alarm and action for the decision maker. Manpower planning and forecasting is the example in Personnel Management. These models represent a real life problem situation in terms of the variables. constants and parameters expressed in algebraic equations. The OR models generally try to find a solution which maximize or minimize certain aspects of business. The OR models address themselves to the resources usage optimization. In many areas of management. For example. there is solution to these problems. There are also several management systems.. Further. In arriving the solution. and set theory are used. These models have clarity to the extent that each of them has a set of assumptions which must be true in real life.Sarras . the ABC analysis. 2. Such models take away the personal bias of the decision maker. In manufacturing business. While some others require the use of management principles and practices. In business and industry. the maximization of profit with an appropriate product mix. Production planning and control scheduling and loading systems are the examples in Production Management. medicines. under the conditions of constraints. are the examples of the use of the management science in the materials management. the models are mathematical. These models. This play between the two costs has to be balanced at a point. Operations research (OR) models The Operations Research (OR) models are mathematical models. which is known as an optimum point. if the assumptions are valid. the solutions offered are realistic and practical. The behavioral analysis can be used to set the points for alert.sciences. The efforts are made to find the optimum solution. within the capacity and the market constraint. is a common problem.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. matrix algebra. probability. by balancing two or more aspects of the decision situation. the other cost goes up. the system of capital budgeting for better return on the investment. etc. there are a number of situations where one type of cost is controlled. pdfMachine . the model represents the real life problem situation. the proven methods of management control are available which can be used for the management decision.
This approach uses a random occurrence of a large number of events. In such cases. The simulation techniques help to assess the quality of the facility design before the investment is made in building such facility. For example. exponential average pdfMachine . Forecasting: Time series analysis and exponential smoothing It is possible a statistics for the next period demand with the help of a simple average of two previous periods. Examples of Behavioral Models Forecasting: Regression models In the regression models. The minimization of capital blocked in the inventory and simultaneously meeting the market demand or the production requirement is also a problem constantly met with.6 ÷ where Y = Sale of two wheelers X = Surplus disposable income The statistical packages are available for variety of regression models which can be used for developing and testing the regression model.The allocation of an inventory to the various destinations with the least transportation costs is another well known problem. we are trying to find the relational impact of one variable on the other*. bodyweight can be estimated with the helps of food in-take. In facility designing problem. However. where C is constant and R is regression coefficient. the cost of facility. Y = 600 + 0. and the waiting time of the customer are considered. where the cost of inventory and the cost of ordering or set up are balanced. X. the problems are solved by using a simulation approach.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. the cost of waiting time of customer and the cost of idle time of the facility and decide on the facility design with a predetermined service standard. Some problem do not precisely fall in the category of the standard OR models. viz. its running cost. Or the sale of two wheelers can be forecasted with the following regression models: ________ *A typical two variable regressions model is Y = C + R . determines the status of the system and evaluates its cost of operations.USA . since they show a strong relationship. the idel time of the facility. the simple average of past two periods to forecast the next period may not be correct. The inventory control models offer an optimum solution. These problems are solved by application of the Queuing Theory.Sarras . The theory considers two costs. In such cases.
the Sales Budget. If three period models are constructed.3 ‘a’ is weight expressed in a fraction and D is the actual demand at period t . In this approach. The questionnaires are designed and computerized to assess these aspects of the buying behavior. the assets to liabilities.USA . Market research methods Several methods are available.is used. the quick ratio.Sarras . Management Science Models Budgeting models Controlling the business performance through the budget system is an accepted management practice. They are also used while decision making for advancing loans to the companies. where more weight is given to the latest period and less weight to the older period. various budget are prepared. if certain changes are expected. through a survey. the recall rate on the various advertising campaigns and its influence on the buying decision. viz. the Capacity Budget. The survey methods are used to find the influencing factors in the buying decisions.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. There are more than a dozen ratios which deal with all aspects of business. the Manpower pdfMachine . the Marketing Manager can forecast the response rate. it would be as under: Sales for period " t + 1 = S t + 1 S t + 1 = aDt + (1 – a)aDt . and the inventory turnover and so on.. A forecasting model needs continuous scrutiny and.1 + (1-a)2 aD + (1-a)3 a Dt . A model of these ratios can be computerized and be readily used to assess the status. and there are many models to choose from. The larger value of ‘a’ means the new average will be more influenced by the demand of the latest period and less by the old period. built-up on the accurate data the variable and the parameter to be derived from the other information system developed in the organization. The forecasting model is a Decision support Information System. There are some ratio norms prescribed by the financial condition of the organization. the Production Budget. Ratio analysis for financial assessment The ratio analysis is a standard method of assessing the financial status of the organization. The most important decisions are based on forecasts. whereby you can forecast or judge the behavior of the consumer in respect of their buying decisions. They are the current ratio. For example.
If there are possibilities of altering the costs. i. cost considerations. The costs are generally not linear over the entire range of activity. The model is very popular where the costs are known and are controllable. for visual impact. For example. It not only provides the totals but also summaries at the sub-heads. It has also a facility that if one row or column changes. A break-even model can be built for the multiple activities and for the non-linear costs. Using these budgets the profits re estimated. it computes the changes in the rest of the worksheet. It is a very handy tool for a quick decision on the price. The model is used to decide the alternatives based on the cost. where the planning. This gives the manager a self evaluation tools for these assessing the current status and also provides some insight into the operations of the Company. Budgets are also used for planning and control. are a standards tool for these applications. the Expense Budget. if the price is reduced.Budget.USA . VisiCalc.2. The computerized model helps in assessing the various parameters of business and its sensitivity towards the profit/loss. pdfMachine . The advantages of this model are that it tells you as to what the break-even point for the given level of costs and revenue is. The break-even model. Break-even analysis model This model is simple but very useful for determining the volume of business activity at which there is no loss or profit. The use of Spread Sheet. as expressed in the mathematical form. Bar chart and Histogram. and can used very effectively for commercial negotiations. The spread sheet packages can handle hundreds of rows and columns and provide the analysis on the percentage basis. Each manager can prepare. it would tell its impact on the break-even point. volume and price. simple spread sheet for his areas of operations. The system is used to find out whether the performance is under the budget or over the budget. etc. is as under: This model can be built for the company. Framework and many others. All these systems are based on the worksheet which has column totals.. The cost would go up after a certain range and would remain steady till some level and further increase is then expected. These packages provide a graphical presentation in the form of line charts. the variable cast and the revenue at each activity level in terms of the units demanded.Sarras . budgeting and analysis is required. Lotus-1-2-3. where you can identify the fixed cost.e. the spread sheet of Sales-profit model is given in Table 10.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. where the data is drawn from a computerized Mini or Mainframe Systems. for the product groups or for any activity. etc. where it is affected. and the Inventory Budget. etc. the revenue will come down and the break-even point will further go up.
in which an amount S for each period is going to be received and I is a discount rate.90 this year. NPV = (PV of future cash flow) .I The formula used for the present value (PV) is Where T is a number of period. For example.Sarras . then this one rupee of the next year is worth Re 0. This flow of money. For example. the second decision the management has to take is how to allocate the total funds to the various investment projects. if it is to be evaluated as on today and discount rate is say 10 per cent. First. " the number of investment proposals. the organization may have Rs 100 million and the investment projects are worth Rs 150 million. In investment analysis. " Differential investments. The management. you are going to receive one rupee next year. Using this concept of the present value of future cash flow a decision support system model can be built considering the following factors. in the investment decisions. Then. Let us consider the following problem of selecting an investment plan Since Plan A has more NPV we should select plan A. the investment are evaluated on the basis of discounting the value of the money of the future cash flow to the current period and the net gains are compared.Return on investment analysis The investment decisions are very common in the business organizations and they are of two types. " Different cash inflows savings. has to take a decision as to how to allocate Rs 100 million to these projects? Therefore. therefore.Investment =PV . the Net Present Value (NPV) is calculated and compared with all the investment alternatives. pdfMachine . you want to buy a machine for which three alternatives are available. and each alternative has a different investment amount and a different flow of gains or savings.90 is the net present value of one rupee expected in the year 1997. For example. The Re 0.USA .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. one has to invest in one among the several alternatives which are competing with each other. If the system of cash inflow (savings or gains) are unequal each ‘S’ will be evaluated separately to compute the NPV.
" maximizing the return by allocating limited funds to the several investment proposals. then draw a purchase order of the quantity equal to the Economic Order Quantity (EOQ). a company should be able to maintain sufficient cash balance for its needs. Suppose. This kind of planning will help to raise the short-term loans and simultaneously focus on the issues which are affecting the financial management.Required Order Level (ROL) system as shown in Fig. With the use of computer.. This model is better than the above discussed individual ratio model and its analysis as this model provides an insight into the relationships of the various factors affecting the return on investment.4 Procedural models There are a number of decisions which are made on the basis of well defined rules and procedures.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. yet not be in position where it is holding excessive cash. The use of rules. This shows that in the month of March and April. Model for cash budgeting Cash budgeting is a continuous process.10.5." Different criterion for selection. For example. This model also gives the decision alternatives to improve the return on investment in the current business.3. the payback period. 14. With careful cash planning. the rate of return and the internal rate of return. pdfMachine . you have to make a decision on buying a business. In such an event this model will be useful. additional funds procurement through external sources will be needed. formula or mathematical expressions is the basis for the model. This ordering rule is developed on the model of the Economic Order Quantity (EOQ) . a model can be built with all the details of cash inflows and outflows as shown in Fig. the reordering procedure for an inventory items is as under.USA . Du-Pont Model is shown in Fig. If the stock level # the Recorder level. Corporate model of return on investment This model is popularly known as Du-Pont model where the composition and the analysis of the Return on investment are shown. i. Unless certain conditions are satisfied the decision rules will not be applied.Sarras .3. A typical statement of cash budgeting is given in Table 10.e. 10.
5 EOQ Model It is possible to control the inventory of some items based on such models. pdfMachine . 14.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. 6 VENDOR CODE AP NO TAKE THE NEXT VENDOR.EOQ ROL PERIOD Fig.Sarras .USA . The decision models can be developed by using the non-mathematical expression or a formula. These models can be computerized and be made a part of the Decision Support System. Let us take a decision problem of selecting a vendor by using the nonmathematical expressions. If the conditions are satisfied the decision is automatic.6 Vendor Selection Process Model. 10. 14. OQ > 5N Fig. YES NO PR>1 TAKE THE NEXT VENDOR. The selecting of vendor is based on the following conditions: Vendor : : : : Is he approved (AP) ? What is the performance rating (PR) ? How many orders are pending on him (ORD. YES YES ORD.PEN) What is the level of order quantity (OQ) ? ? These conditions can be put in a model as shows Fig. NO SELECT THE VENDOR YES TAKE THE NEXT VENDOR.PND TAKE THE NEXT VENDOR.
The techniques provide a ready help in assessing the impact of the project completion time. It helps the Project Manager to select an activity for resources scheduling. the cost and the resource. monitoring and controls of tasks and projects of the large number used effectively for planning. 2. Attention is focused on selected activities which are critical for the project completion. 4. The most important advantage which these techniques provide is the information on trade off.e.Sarras . Management considerations of PERT/CPM 1. Any activity which is entering into cost and time over-runs is quickly identified. Apart from planning. Inter-dependencies between the activities are described more clearly showing the possible bottlenecks in future. of the most probable time in which a project will be completed and also the probability of its being completed in time.CHAPTER-11 Decision Support Systems-II Project Planning and Control Models The PERT (Programme Evaluation and Review Technique) and the CPM(Critical Path Method) techniques have emerged as very powerful tools for planning and control of one time tasks or projects. 6. monitoring and control of tasks and projects of the large number of activities. if the activities are delayed. Network drawing and PERT/CPM statistics Figure 14. i.7 explains the rules of network drawing. pdfMachine . for cutting down the activity completion time. A running estimate is provided. It provides an easy method of planning the project in a different manner. these techniques provide better facilities in terms of understanding of the project as they show the inter-dependencies of each activity in the project.. 5. It provides the facilities to schedule the resources for the various activities. the completion time. the model also managers to help three aspects of the project.USA . in each activity. Several computer software packages are available which can he used effectively for planning. 3. within available resources. Against the conventional systems of GANTT charts. The project manager considers the sequencing of activities before implementation of the project.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.
(a) The most likely time of completion of the activity. tp = The pessimistic time estimate. the next step is to estimate the completion time of each activity. to = The optimistic time estimate. (b) The time estimate (te) based on “three” time estimates : The optimistic.Sarras . A must be completed before B starts. te = to + tm + tp Drawing the PERT network The next step is to draw a network of the project from start to finish. Two time estimates are suggested. It is shown by a dotted line. C can start when A and B are completed.USA . Activity X is a dummy.7 Network Drawing Estimating activity time When the network is completed. the activity time estimate. not requiring any resource. O A 3 C 7 X B D O 4 8 Fig. Activity C is dependent on the activity B. tm = the most likely time estimate.Network drawing rules : O A 1 B 5 Activity. every event is assigned a number for reference and identity. The critical path is that path which takes the longest time from start to end. Then. The dummy activity X shows only dependency and does not consume time or resource. Let us take a sample project as under : pdfMachine . O A 2 B C 6 Activity. C and D are parallel activities. the most likely and the pessimistic. 14.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. O A and B are parallel activities. Then. O = Event Activity. Activity D is not dependent on the activity X.
Sarras . C. Probability of completing the project pdfMachine .8 Critical Path.EF Late start (LS) 6 16 11 0 17 Late finish (LF) 11 24 17 11 24 SLACK 6 5 0 0 0 SLACK = LS .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Project Completion Time = Sum of activity times on a critical path = D+X+C+E = 6 + 0 + 11 + 7 = 24 days. In the network D. The slack is a time resource which a project manager can use for manipulating the resource and start and finish of the activity. Activity A B C D E Early start (ES) 0 11 11 0 17 Early finish (EF) 5 19 17 11 24 or LF . D A.C 3 A 1 D 2 X C 4 E 5 B Fig.USA . E are the critical activities : While A and B are non-critical.ES Critical activities are those where the slack is zero. X. 14.Activity A B C D E Most likely Duration (Days) 5 8 6 11 7 Immediate predecessors to activity D A.
35. 500.69 4. Optimistic Dessimible activity Time tot tp .83 2.to Time tp a= 6 A B C D E 3 7 4 8 20 10 0. the project will be completed in 24 days with 67% probability. that is.0 = 0.USA .0 – 24.Suppose this project is scheduled for completion in 24 days.35 = 2.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.0 Z= 2.Sarras .35 1.43 a2 A normal probability curve table indicates against 0. Activity crashing for control of time Activity Normal duration 5 8 6 11 7 A B C D E Cost for normal duration 500 800 900 1200 1000 Crash duration 3 7 5 Crash cost Rs. therefore.35 25.35 Sum a2 = 6.16 1. a = 2. We can estimate the probability of completion in 24 days in the following manner. it is necessary to crash the activities which are on the critical path. Critical activity C D E Reduction in duration 4 2 Cost increase 400 1000 Cost slope .0 0. Activity A can be crashed to 3 days and it will cost Rs.43. (See these tables in any textbook of statistics). If the project is to be controlled in time. 1000 1600 2000 Activity B and C cannot be crashed.00 6. 100 500 pdfMachine .66 1. 1000 as against Rs.
such as pricing.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. All the costs are accumulated and the unit cost of the job is computed. The companies install these systems as the case may be and build a cost database for support in decision making. on some agreed basis such as manhours or machine. purchasing.Sarras . pdfMachine . All such over-runs are investigated with the purpose of cost control and in few cases the standards may be modified. Job order cost system In this system the costs are assigned to the jobs passing through the plant and are accumulated by recording the basic job statistics on the job card.So if the project is to be completed in 20 days as against 24 days. 2. Cost Accounting Systems The cost data is an important data which is used in many business decisions. Using these standards for costs for the three inputs mentioned above are determined and the job cost is budgeted. Direct overheads are also booked through transactions. These systems give due considerations to work in process (WIP) and the rejections. labor and overhead. In other words.hours. the costs are accumulated by a department or an operation. MS Project and PRIMAVERA are the standard packages for Project Management. 500. The order is broken into three section materials. rely on the formal cost accounting systems used for business decisions and also for the cost control. for costs for the three inputs mentioned above. etc. There are three cost accounting systems : ! ! ! Job order cost system Process cost system Period cost system. etc. 1. The indirect overheads are allocated. allocation of overtheads. the emphasis is placed upon the department of manufacture. The costs are then used to find whether the actual cost is more than the budgeted cost. The unit costs are then applied to the number of units transferred in the manufacturing process and ultimately identified with units completed and sold. Process cost system In this system.USA . The number of units of product completed in the department is used in the computation of a unit cost. Most of the companies which are in competitive business. The direct materials are accounted through the material issues and the direct labor through labor booking on the card. it is economical to crash the activity D and not E as the cost increase per day in case of D is Rs 100 and as that of E is Rs. make or buy.
it merely result from the variations in the quantities produced at different times during the year and from the variations in manufacturing overheads.14. Operations Research Models Mathematical programming techniques Mathematical Programming Technique is a vast area of application.3. they are allocated by using the various methods of allocation. Materials are not requisitioned for a particular order or a product. When the product completion time is very large. In such cases the cost data is accumulated on the basis of the period against the job and summed up to arrive at the actual cost when the job is completed. The material consumed is accounted over a period for cost considerations. Period cost system In this system. The programming techniques are based on such mathematical models which give unique feasible solutions satisfying the constraints on resource. All the three systems can be computerized for cost control by using the cost budgeting systems. no distinction is made between direct materials and indirect materials with respect to product. The costs so computed are then transferred to the final product on unit basis giving due regard to the work in progress (WIP). The programming techniques are applicable when certain conditions are met and the problem can be expressed in a mathematical form in terms of the decision variables. demand. The labor costs are also accumulated by the department or process with no distinction made between the direct and the indirect labor. the direct material and the indirect material are identified with the department or the process. Manufacturing overheads are assigned to the department or the processes directly. The wages paid to the employees in the department are fully accounted. (MODEL) BUSINESS RESULTS pdfMachine .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The variation in the product cost is not caused by any basic change in the type of product manufactured or by any change in the cost structure. the application of the job costing or the process costing is not possible. The process of mathematical programming is given in Fig. and if they cannot be directly identified with the department.Sarras . wherever possible.9.USA INTERPRETATION MATHEMATICAL ARGUMENT (SOLUTION) . Instead. REAL WORLD PROBLEM ABSTRACTION MATHEMATICAL SYSTEM. capacity. etc.
e. Then decision problem can be expressed in the form given below. Linear programming model (LP) Linear programming is a special mathematical model. X2 > 0 This problem has a solution which is optimum. 11. X1 and X2 are the quantities to be produced of P1 and P2 respectively. The company has 500 units of R1 and 750 units of R2.Sarras . Profit = 1750 Computer based LP software packages are available almost on all the computer systems. it would provide the information on the following. The solution to this problem is : X1 = 83. This model is applicable where the decision variables assume the values which are non-zero.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. in this problem. 2X1 + X2 < 500 X1 + 2X2 < 750 X1 > 0. called constraints to use the variables or the combination thereof. For example. solving linear programming problems. what would be the product mix and profit? pdfMachine . (b) If raw material constraint of R1 is improved to 800 and of R2 to 1000. i.9 Mathematical Programming Model. Besides solving. Let us define the decision variables for the products P1 and P2 and X1 and X2. Z = Profit = 5X1 + 4X2 = Maximum Within the raw material constraint. The contribution to overhead and profit is Rs 5 for the product P1 and Rs 4 for the product P2. Suppose a company makes two products P1 and P2 from two types of raw materials R1 and R2.Fig.USA .1/3 and X2 = 333.1/3. There are limitations. the solution provides a variety of management information through sensitivity analysis. (a) If profit of P2 is increased to Rs 6 what be the product mix of P1 and P2. The problem is solved by the Simplex Technique. the products P1 and P2 are to be produced to maximize the profit. and the relationship among the various variables is linear. The product P1 requires 2 units of R1 and 1 unit of R2 and the product P2 requires 1 unit of R1 and 2 units of R2.
(c) If instead of 2 units of R2 in P2 and 1 unit of R2 in P1, we succeed in reducing this use by 20 per cent, what would be the product mix and the profit? (d) Suppose if only P2 is to what action should be taken? Quadratic programming, integer programming are all special cases of the mathematical programming model. These models can be used as Decision Support System in business decisions. The typical mathematical programming problems which can be solved by applying the optimization techniques are listed as follows: 1. 2. 3. 4. 5. 6. 7. The design of aircraft and aerospace structures for minimum weight. The design of water resources system for maximum benefit. The shortest route of travel. The optimum product mix. The minimization of cost by raw material mix. Assigning jobs to workers. The selection of site for an industry.
Inventory Control Models Materials management is an important function in Business Management. Apart from the commercial aspect of the Materials Management, its major objective is to control inventory in such a manner that the capital blocked in the inventory is minimum and the demand on the inventory is met without any time loss. The inventory control models are developed for each kind of conceivable situation in business. A-B-C analysis The inventory items are analysed in a number of ways by some aspects of the inventory. One of the classification is the A-B-C analysis based on the capital blocked in the inventory. It means that when the inventory, it will be observed that 10% items of the inventory contribute to 60% inventory capital, 20% contributed to 30% inventory capital, and 70% items contributed only to 10% capital. This immediately suggests the management control focus on ‘10%A’ category items. Figure 14.10 shows A-B-C analysis In graphical form. The system of control for these items is normally as shown in Table 14.4.
100 % Value
90 B 60 C
Fig. 14.10 A-B-C Analysis.
Table 11.4 Category of item
A B C
ROL system or ordering in smaller quantities on review of the inventory. Fixed period ordering system. Maximum-Minimum System. Annual review and ordering system.
All these items can be brought under a computerized system. Such system will compute the inventory control parameters for each item and make suitable decisions. In all three systems, the cost of order or manufacture is balanced with the inventory carrying cost. The inventory can be classified in other ways also. For example, the inventory is classified from the manufacturing point of view taking ease of procurement as a basis. The classification could be critical, semi-critical, and not critical from the production point of view. The inventory control system recommended for this classification is as shown in Table 14.5. Table 11.5 Category of item Critical (A) Semi-critical (B) Not-critical (C)
System of control based on ease of procurement Bulk procurement and control on stock variations Periodic ordering But very frequently, keep minimum stock.
The management control focus is on undisturbed supply of raw material to manufacturing. Each item in the inventory is planned, monitored and controlled through one system or the other, based on the category of the item. Periodically the parameter of the control change; but by and large the system of control remains the same because the objective is to control the capital blocked in the inventory. The main issue is how to allocate the capital amongst thousands of items
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without affecting the demand of the items. In such cases the ordering cost, the inventory carrying cost, and the cost of stock- out are considered in the system of control mentioned above. Material requirement planning (MRP) System When the Company is following a fixed period production programming to maximize the use of production capacity, the Material Requirement Planning systems are used to minimize the inventory and simultaneously ensure the availability of the material. The MRP system is feasible only when the company produces standard products for which the Bill of Material or the Part List enumerating the items which go into the products, is available.
The bill of material is exploded and summarized for the items disregarding where it is used. Then it is compared with the stock available, the order placed and due for delivery in the production period. The comparison will show the shortage which would be faced in the execution of the production programme. MRP system is also used when the production requirement is fluctuating from period to period and also where the changes in the production programme are frequent. It provides an excellent tool for planning, procurement, monitoring and control of the inventory as well as the production programme. 11.2 ARTIFICIAL INTELLIGENCE (AI) SYSTEM
All human beings have intelligence, which they use for problem solving. Intelligence when supported by knowledge and reasoning abilities becomes an artificial intelligence. When such an artificial intelligence is packed into a database as a system, then what we have is AI system. AI systems fall into three basic categories, viz., the Expert Systems (knowledge based), the Natural Language (Native languages) Systems, and the Perception System (vision, speech, touch). Figure 14.11 shows the structure of AI systems. Artificial intelligence is a software technique applied to the non-numeric data expressed in terms of symbols, statements and patterns. It uses the methods of symbolic processing, social and scientific reasoning and conceptual modeling for solving the problems. The AI systems are finding applications in configurations, design, diagnosis, interpretation, analysis, planning, scheduling, training, testing and forecasting. The AI systems do not replace people. They liberate experts from solving common/simple problems, leaving the experts to solve complex problems. Artificial intelligence systems help to avoid making same mistakes, and to respond quickly and effectively to a new problem situation. The knowledge-based Expert System is a special AI System. It has wide applications in business and industry.
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ARTIFICIAL INTELLIGENCE SYSTEM
NATURAL LANGUAGE USES
NATIVE LANGUAGE KNOWLEDGE APPLIES
SIZE, SHAPE, IMAGE, VOICE APPLIES
SENSING ABILITIES FOR REASONING
Fig. 14.11 Categories of AI Systems.
KNOWLEDGE BASED EXPERT SYSTEM (KBES)
Decision making or problem solving is a unique situation riddled with uncertainty and complexity, dominated by the resource constraints and a possibility of several goals. In such cases, flexible systems (open systems) are required to solve the problems. Most of such situations, termed as the unstructured situations, adopt two methods of problem solving, generalized or the knowledge based expert system (KBES). The generalized problem solving approach considers the generally applicable constraints, examines all possible alternatives and selects one by trial and error method with reference to a goal. The knowledge based problem solving approach considers the specific constraints within a domain, examines the limited problem alternatives within a knowledge domain and selects the one with knowledge based reasoning with reference to a goal. In a generalized approach, all alternatives are considered and the resolution of the problem is by trial and error, with no assurance, whether it is the best or the optimum, while, in the knowledge based approach, only limited alternatives are considered and resolution is made by a logical reasoning with the assurance of the local optimum. The generalized approach is dominated by a procedure or method, while the knowledge based approach is dominated by the reasoning process based on the knowledge. Since, the KBES considers knowledge as the base; the question arises whose knowledge is to be considered as a basis. It is generally agreed that an expert has knowledge, and therefore, he becomes the source of knowledge. An expert is difficult to find and the difficulty of no-knowledge or limited knowledge on the subject is always expressed. Knowledge is with experienced people and experience, is wide and distributed. Hence, a system is required which will hold the knowledge of experienced
people and provide an application path to solve the problem. Such a system eliminates the knowledge bottleneck. To build a knowledge-based system certain prerequisites are required. The first prerequisite is that a person with the ability to solve the problem with knowledge-based reasoning should be available. The second prerequisite is that such an expert should be able to articulate the knowledge to the specific problem characteristics. Knowledge in the KBES is defined as a mix of theory of the subject, knowledge of its application, organized information and the data of problems and its solution, and an ability to generate new avenues to solve the problem. The KBES has three basic components which are necessary to build the system as shows in Fig. 11.12
USER CONTROL MECHANISM
Fig. 14.12 KBSE Model.
It is a database of knowledge consisting of the theoretical foundations, facts, judgments, rules, formulae, intuition, and experience. It is a structural storage with facilities of easy access.
Inference mechanism It is a tool to interpret the knowledge available and to perform logical deductions in a given situation
User control mechanism Its is a tool applied to the inference mechanism to select, interpret and deduct or infer. The user control mechanism user the knowledge base in guiding the inference process. In the KBES, three components are independent of each other. This helps in modifying the system without affecting all the components. Like in the database application, where the data is independent of its application, in KBES, knowledge is independent from
application, i.e., inference process. The KBES database, stores the data, the cause-andeffect relation rules, and the probability information on event occurrences. For example, the knowledge base of Health Care would have knowledge such as “obesity leads to high blood pressure”; there are 60 per cent chances that smokers may suffer from cancer”. The KBES, therefore, stores and uses knowledge, accepts judgments, questions intelligently, draws inferences, provides explanation with reasons, offers advice and prompts further queries for confirmation. In the KBES, the knowledge data base uses certain methods of knowledge representation. These methods are-Semantic Networks, Frames and Rules.
Semantic Networks Knowledge is represented on the principle of predicate functions and the symbolic data structures which have a meaning built into it are known as semantics. A semantic network is a network of nodes and arcs connecting the nodes. The node represents and entity and the arc represents association with a true and false meaning built into it. The association and meaning uses the principle of inheritance. For example, all animals with four legs have a tail and a dog has four legs, hence the dog has a tail. The system inherits from the fact that the dog has four legs hence the dog is an animal and, therefore, a dog has a tail or not.
A knowledge base on ‘Table’ is presented in a Semantic network in Fig. 14.13
IN MADE OF TABLE IN SMALL APPLIES LAMINATED WOOD
Fig. 14.13 Semantic Network of Knowledge Database on ‘ Table ’ .
A knowledge database of the table is stored with the attributes like location, function, size and shape. If a query is put on table through any of these attributes, one can infer the specifications of table. The inference would be corret depending upon how the knowledge is designed and structured into database. For example, if table in the room is
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inherits the characteristics of a table in a drawing room. it pdfMachine . it would be inferred as conference room table. information. A frame consists of the slots representing a part of the knowledge. When reasoning is goal driven.Sarras .14 Knowledge in ‘Frames’. A rule is a conditional statement of an action that is supposed to take place. The frames can be related to other frames. 14. it is necessary to create the inference mechanism. This inference would be correct if the knowledge base has elliptical shape as an attribute of the table. Some rules can be constructed in the form of If Then statements. 11. FRAME ENGINE OVER HEATING SLOT : SYMPTOMS VALUE (TEMPERATURE MORE THAN 80 DEGREES) (WATER BOILING) (SPEED RETARDATION) SLOT : INSPECTION VALUE ( CHECK WATER LEVEL) (CHECK OIL IN ENGINE) (CHECK CARBURETTOR) SLOT : TREATMENT VALUE ( STOP ENGINE & DRAIN WATER) (START ENGINE & POUR COLD WATER) (INCREASE OIL LEVEL) (ADJUST CARBURETTOR) Fig. The mechanism is based on the principle of reasoning. The concept of frame is to put the related knowledge in one area called a frame. Rules The third method of representing the knowledge is rule based. Frames The second method of representing the knowledge is putting the same in frames (Fig. under certain conditions. Each slot has a value which is expressed in the form of data. process and rules.big and made of wood with lamination and has elliptical shape. An example of If-Then decision/action statement is given below: IF AN ITEM IS MADE OF TUNGSTEN CARBIDE IF AN ITEM IS HIGH SPEED TOOL IF AN ITEM IS NOT HIGH SPEED TOOL THEN THE ITEM IS EXCISABEL. THEN THE EXISE DUTY IS 20% THEN THE EXCISE DUTY IS 5% Inference Mechanism Having created a knowledge database.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The frame is an organized data structure of knowledge.14). The characteristics of a variety of tables are used to represent knowledge on table.USA . A table in a drawing room.
is backward changing.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.USA . measure. uses the data already present in the system and gets it activated for action as per the guidelines.e. evaluate. For example. The MIS designer has to look for all such situations and design the DSS for integration in the system. all such systems are designed to read. based on the knowledge data base. The KBES uses both the methods of reasoning. i. Some of the methods are proven and are widely used. if there is a breakdown in the plant.is called Backward Chaining to goal and when it is data driven it is called Forward Chaining to goal. in a simple case of order processing. it the data which is being collected in the process of plant operations is interpreted with the knowledge base. The choice between backward or forward chaining really depends on the kind of situation. at all levels of management. etc) to data. For example. the embedded DSS will accept or reject the order based on the CRISIL. When the decision making need is in real time dynamic mode. However. They are also used for sensitizing the various parameters of the model. But if the question is of preventing a breakdown. Many of the decision making situations. the confidence in the knowledge and the quality of inference mechanism. If the order is accepted. in all such cases.Sarras . stoppage. The data here is used to infer the performance of the plant and this is called forward chaining. it is a case of backward chaining.4 MIS AND THE ROLE OF DSS The Decision Support System (DSS) is a special class of system which is used as a support in decision making. Such applications are separated and are packed in the DSS. The DSS could be an internal part of the MIS. The MIS would become more useful if the decision making is made person-independent and executed with well-designed DSS. The DSS. one has to go from goal (breakdown. availability of stock and so on. If anything outside the pdfMachine . These systems are used sometimes for resting new alternatives. training and learning.. To resolve a problem after the event. then the data would be monitored in such a way that if it is directing towards a goal (breakdown. stoppage. technique or model. the order acceptance is generated and the dispatch is scheduled for the ordered quantity. The success of the knowledge based expert system depends on a degree of knowledge. it can be predirect whether the plant will stop or work at low efficiency. credit rating. monitor.) then it is a case of forward chaining. The basic characteristic of the decision support system is that it is based on some tool. 11. All such embedded systems cover the normal variety of decision situations. then looking backward for the symptoms and causes. These systems use data from the general MIS and they are used by a manager or a decision maker for decision support. analyze and act as per the decision guidance embedded in the system. are such that its occurrence is infrequent but the methodology of decision making is known.
4. List the problems which most of the businesses have which need DSS and classify the DSS in following types-Deterministic and Probabilistic. The decision support system plays a dominant role in the management information system. formula. Most of this situation calls for the use of models and the nature of decision is strategic. A good DSS needs a good abstractions process to construct a model of the problem. There are systems which use knowledge base extensively for problem solving. calling for planned activity. When the decision situation requires multidimensional analysis using the internal and external data. algorithm and heuristics are extensively used in DSS. 5. 8. Before a model is accepted for DSS. change of product design or change in the manufacturing process are strategic decisions which require critical analysis of data. Explain with example. DSS will bring to the notice of the decision makers that action is called for in the situation. careful evaluation of various alternatives and selecting one of them for implementation on the given criteria. REVIEW QUESTIONS FOR CHAPTER10 AND CHAPTER11 1. then such decision support systems are kept out of the main MIS design scope. 7. what tests should the model is put to confirm that it is a valid model of the problem situation? 6. price revision. What types of DSS can be embedded in the application? 3. and further they can be classified as OR models or quantitative models based on management science. appointing new dealers. which sits above and uses the data from MIS. Identify the applications where knowledge bases can be used for problem solving. What is simulation? Why and when is it used in problem solving? What are the assumptions and limitations of using the simulation model in DSS? 9. Business rule.Sarras . Executive Information System (EIS) is a kind of DSS. Decisions like a new product launch. as a support to decision making. Which is the type of DSS that can be integrated in the MIS and which are types not worthy of integration? 10.considered variety crops up. What is the purpose of EIS and what kind of decisions EIS would support? pdfMachine .USA . High end DSS system need well conceived problem model and solution criteria to solve the problem. What is the purpose of DSS in MIS? 2.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Explain these terms.
is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.MRP etc.Sarras . it has to take support of many other systems. Internet and the Imaging Systems. It requires an instant real time response in every case. where the arrival of the persons or their absence raises a number of triggers in the Organisation.CHAPTER-12 Enterprise Management Systems 12. permissions. The well-known attendance recording system monitors the employee movement from all anglesavailability. as driving energy source. Every business activity has additional dimensions. knowledge based decisions and have them executed in the business operations in acoordinated manner. and audio video technologies have converged closely to produce a new style of operating business. a wireless communication as. The dependence on the information.1 ENTERPRISE MANAGEMENT SYSTEM (EMS) Computer. It must catch an event. wherever it occurs. communication. It also requires the management of interfaced system such as CAD/CAM. which requires instant processing. Since. assigning. Next step will be ordering the material on the vendor. The business needs of today are beyond the transaction processing. updating the business status and informing the marketing representative for monitoring the activities. All this requires operations and management of a couple of system besides the normal sales application. interpret it and trigger the action. viz. and communicate it across to the enterprise. business is information hungry. It also requires event monitoring and updating system such as the Paging.. Take another simple example of employee management.USA . In the very beginning acceptance possibility needs to be assessed and the customer should be informed immediately. electronics. security. In such a scenario. To support such demands of the business. Take a simple example of customer order received in the Company. is increasing. When the business requires online information to make the informed. actions and decision needs. The system is extended beyond the Corporate boundaries. it must have an ability to sense the situation and act accordingly. In the business today. The dynamic business environment of today is full of challenge and opportunities. the demand is a paperless operation. and salary7 and wages. The word enterprise is chosen to convey that it encompasses the larger business community covering all the players and their participation in the business. It needs the management of EDI systems to get hooked to the customer and vendor for a quick information communication. booking the order and scheduling the same on shop floor for production. a result of fully transparent and automated operations at all centres in an integrated and coordinated manner taking care of the business. the system which you are designing is an enterprise wide. speed and time. systems of information processing and pdfMachine .
. when implemented in an integrated manner for coordinated and cooperative function of the business. i. such as. Manufacturing and Engineering Systems for Production Management " AMS: Attendance Management systems. The major decision making and its execution takes place through the ERP. communication and action. " ERP: " EDI: Enterprise Resource Planning Systems. It handles the operational systems to run the business and provides the required inputs to planning and control system handled by the middle management.1 shows the following systems.USA . the customer.communication are needed. Figure 15. give rise to the Enterprise Management System. and the well designed solution and system are available to support all such needs of the business. Such an integrated solution is called as the Enterprise Management System(EMS). the Enterprise Resource Planning (ERP) system plays the role of front running system. " CAD/CAM/CAE: Computer Aided Design. " DMS: Document Management Systems. With the internal sources of information and the use of information from the external sources. movement tracing systems. which. Electronic Data Interchange System for commerce. viz. i. alarm or warning systems. mobile telephone system and the audio video systems. at gates. copying and text management and dispatching document DBMS. pdfMachine . The Electronic Data Interchange (EDI) system assists the ERP in connecting two systems electronically for E-Mail. Thought the tools. It is a system of managing all functions of the business with information support coming through the ERP. etc.e. paging. " SMS: Security Management System such as the close circuit television. It also acts as a gateway to interact with the vendor. the technologies. in stores. etc. These systems may be automated or mechanized interfaced with the other system for data communication and processing. There should also be audio video and imaging systems for bring realism in information and remote sensing system for security and communication... employee attendance and presence management for the role management or Data Capture Systems on floors.e. the specific requirements and simultaneously provide inputs to the ERP. Documents Transfer. The ERP is supported by various other support systems which manage. imaging. and the other associated institutions of the organizations. it provides a decision support information for strategic planning and control to the top management. etc. EMS. Data Transfer. In the EMS. cordless.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. what is needed is an integrated solution out of these technologies and the system offering an enterprise wide management support. independently. " CMS: Communication Management Systems.Sarras . it is designed to handle the commercial functions of the business popularly known as the electronic commerce.
i. The AMS.. manufacturing and engineering functions. entry access requirement of the business operations. i. The CAD/CAM/CAE. altered and advised to act from the location where they are. availability and access if tracked. sending messaged. The CMS or the Communication Management Systems re used for tracking the important resource for action.. copying and mixing the information and sending the information to the various destinations for execution. Attendance Management System keeps track of the employee related information for personnel planning. I. its movement. as a tool. availability and scheduling.USA . These resources are located. They are also equipped with the database management facilities and there database act as a back up support to the ERP. i. and for documenting support in the transactions handled.e. In the ERP it is used for crosschecking the key information and also to confirm the authenticity of the transaction. the Computer Aided Design/Computer Aided Manufacture/Compute Aided Engineering systems are the systems which handle design. work flow automation and Document Data Base Management System. It uses scanning.DESIGN AND ENGINEERING CE AN E ND TUR TE AT C AP TA DA EL E CO CTR MM ON ER IC CE CAD/CAM CAE EDI AMS D M OC A NA UM G EN E ME T NT TY RI SMS CMS DMS CU SE COMMUNICATION Fig. It may be a person. or material.. the kind of job handled the cost and so on. a vehicle. The system provides text edit facility for document manipulation for the purpose of transaction handling.. purchase and inspection functions.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. for all its communication needs of recording an event. Security Management System handles the security. imaging. The SMS. editing. shift rotation.E. The DMS. It will provides the drawings and design engineering information to the ERP in its execution of manufacturing. The ERP uses the CMS. monitored. the Document Management System is designed to keep important documents in the database foe viewing. It handles the document access. Their attention is drawn to an event and advised to act to handle the situation.e. and guarded for security and pdfMachine .e.Sarras . It provides static information about an employee through the human resources management system and the current dynamic information such as his or her presence. 151 Components of Enterprise Management Systems (EMS).
the CMS. and actions in a time bound manner. Each of these systems operate on their native systems and are interfaced to the ERP through the gateway by using a specific software. The system design of the ERP is integrated with the features and functions providing an enterprise wide solution to handle all the process functionalities. These systems are a part and parcel of the ERP System network. manufacturing accounts and finance. and also meets the information needs of purchase. The product philosophy is to implement the system as it is with some customization which may be typical to the customer requirement. 12. and the DMS as shown in Fig. All these systems are extensively used for the main purpose for which they are installed. 15. The ERP packages build information base and provide knowledge base for planning and control of the business through the business function management. pdfMachine . store. materials.2. The ERP is a package encompassing all major functions of the business. plan. it provides capability to process the purchase order from ordering to bill processing. The product is generic in nature and is supposed to incorporate the best business practice. The ERP provides a support system in the transaction processing. The resources are finance. the SMS. Each one of them have a specific technology to handle the function and are equipped to capture. An employee movement can be restricted or prohibited to select areas before his time is recorded and sent to the ERP for further processing.Sarras . For example. These six systems together act as the support systems to the ERP . A truck will not be allowed to enter unless it is an authorized one. stores. and reporting across the functions. process and transfer the data of the ERP. generally followed in most of the companies. It also helps to execute the strategies. the EDI.2 ENTERPRISE RESOURCE PLANING (ERP) SYSTEM The ERP system deals with the planning and use of resources used in the business.safety. and then it will be weighed and its weight will be transferred to the ERP for processing further information. updating. The EMS therefore. manufacturing capacity and human resource. The ERP provides methodology of assessing the resource needs for a given business plan to achieve certain business objectives. decisions. the CAD/ CAM/ CAE. The ERP is the main system. can be defined as a Network System comprising the ERP. It provides a support to the ERP by clearing the situation to act further.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.USA .
These packages are RDBMS based with the front end tools. for example. These are provided to safeguard the business of the organization from illegal practice and also to protect the valuable information from misuse.Sarras .Interfaced or assisted by the other systems in the organization. the authority function. information transparency. The ERP features are many. The implementation of most of the ERP packages begin with the enterprise modeling which defines the enterprise structure. These systems provide the database to the ERP or support the ERP by the basic data input directly or through the data transfer. the processes and the business rules. 8. The key benefit of the ERP is that it provides an integrated solution for all the requirement of the business. 2. while conducting the business transactions through the system. 4. These systems may stand alone or from a part of the manufacturing or commercial processing systems. The ERP solutions are available on the Unix Plstform and also on Windows NT. 3. The ERP is pdfMachine . 5. the manufacturing system module of the ERP is interfaced with the Drawing.USA .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. the information and the data integrity at the highest level. Engineering database for query. referencing responsibility. accounting updating and reporting. Marketing. 6. All the ERP solutions provide report writer for the use to create the reports. The architecture is client/server and uses object oriented technology for design and development of the system. the employee attendance report. The important ones are security authorization. the income tax return. it analysis. It addresses the issue of data integrity. seamless integration and information communication. The standard reports like the trial balance. Inventory Planning and Control These modules are designed for data capture. The enterprise model is the platform the ERP system implementation. The solution is structured in the modular fashion to cover the entire business operation. Distribution Manufacturing Stores Management Finance Personnel Maintenance Purchase. viewing and usage of the drawings and it accepts the data of work order by process operations. data transaction validation. 7. the stores ledger. Sales. Simultaneously it respects the organizational hierarchy of authority. and the implementation of the business rules. Are provided with the solution at a generic level. for costing and for building the standards for the future. A typical ERP package solution has following modules: 1. eyc. These features help to keep the system.
Authorisation is a feature provided for ensuring that the transaction is completed with regards to the business rules set by the management. The ERP usage can be controlled at all levels. transaction. the data. For example. Referencing is a feature. the terms are decided by the other users and the purchase order is signed by the third user. reminders. provided for tracking the chain of events for monitoring. the referring feature helps to link the customer order to work order to delivery note to Excise gate pass to bill. a delivery note would give a reference of work order. A strict adherence to them is essential for creation of the controlled environment. information and analysis level. The security system of the ERP is built around the OS security and the additional features are provided while designing the system. The business organization runs through the rules and the responsibility allocation. The material indents are processable in the stores while the vouchers are processable in the Account Department.Sarras .is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. It provides access and updating rights to the users as per the control requirement of the management. It also sends copies pdfMachine . For example. the transaction is not posted in the system for further processing and usage. a cash transaction is allowed at the Finished Goods Store and in the Accounts Department by the authorized users only. For example.USA . The solution provides the E-mail facility for communication of memos. if one wants to check the status of customer order. The security is built for authorized usage and also for selective access. viz. The feature does not allow the transaction to proceed unless such references are established. For example. progress cheking and control. At any other place evolving cash transaction is prohibited.activated by its users. The system provides defined levels to the users and the purchase order is signed by the third user. information or process to the user. The system provides the mapping capability to tie the data.. The ERP system provides a variety of technology supports to implement the solution very fast in execution mode. a bill would give a reference to a delivery note and customer order. It provides a facility to ensure that the userlocation (Department/Division) Transaction integrity is confirmed through check and validation and then ERP allows to proceed. a work order will give a reference of customer order. and text to the selected list. It is possible to establish the link through cross reference of the transaction number or code of the previous transactions. in the purchase order transactions the price and discount are confirmed by one user. The system provides defined levels to the users and these are no limitations on the number of levels. The order entry is permissible in marketing. The ERP satisfies this need of the business. The ERP provides such facilities to ensure that the business is operated on the rules and the guidelines set by the management. This means that only the aothorised user sign.
The drill down could be multi-dimensional to analyse the critical business information. This database update is an event for using the alert. Then he wishes to see the sales revenue over a time. The help could be information. which saves the generation time. ERP system provides an aid to create the transaction by a cut and paste mechanism. The receipt would update the database and the system will have an updated stock status. The ERP sends the electronic mail and executors the SQL statement.USA . and the hold transaction. If the receipt of this item closes the Purchase Order then raise an automatic Purchase Order on the same vendor with the same terms and conditions.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.Sarras . guidance and understanding of the term or process or formats. It is also capable of taking multiple actions through the stored procedures. pdfMachine . the end of chosen period processing. These events alerts are triggered by the database inserts or updates. on receipt of an item send E-mail to the purchase Manager. This requires processing in a different manner to assess the impact. show the work orders which are scheduled where this items is in use. The solution provides facilities like the trial posting. it also allows you to define the action to respond to the alert. Having raised the alert. The alert in this case can be defined as. Take an example of an item receipt in stores. the Production Planner and further. in order to better understand the seasonality in the business. to form the judgments on the business happenings. The ERP also provides an intelligent support in business management. etc. alert and schedule them at his choice. the posting by choice. It can raise a purchase order on the vendor by picking up and choosing the old purchase orders. The help facilities make the ERP user-friendly and easy to learn. Suppose. The drill down helps to run through the system to locate the weak spot for action and control. the flexible valuation procedures.to the concerned person as stipulated. It allows the user to define the events. Through these facilities the management can conduct an impact analysis to judge the financial results and makes the business decisions. All the ERP solutions provide ‘Drill Down’ and ‘Context Sensitive’ helps to use the system. Through the EID connectivity. the sales manager is viewing the sales by region by product line. The drill down facility helps him to use the information the way he wants. The context sensitive help provides an access to help library which can be used by user by calling help. The ERP solutions are built for a user friendly flexible approach to manage the business with the changing needs. it can transact directly to the vendor or the customer in its own format.
The architecture choice is influenced by this requirement. There could be a case where the user is dumb and is required to use the system in a guided manner with the ‘help’ assistance. In a two tier system architecture. Then the three tier architecture is suitable. 12.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. and the Presentation. there could be an application which deals with high volume and complex data structure and this approach is more efficient. In this architecture all the requirements are sent to the server by all the users in the network.3 Client/Server Model – Architecture. pdfMachine .3. The data management is by the server and its processing is through the application logic by client. in each case of implementation. customization should suit the specifics of the business or customer.USA . 12. the ERP is a generic solution for the business operations. The client is a user and the server provides the services required by the user the to run the system.. This affects the load on the server and the response time to the user increase. The client uses the GUI (Graphical User Interface) tools for simplicity while the application logic is processed on another machine. Since. Since. if response issue is taken care of by the high end multiple CPU and the parallel processing hardware platforms. viz. These components can be built with the client server role definitions. there is a rigid division of roles. the architecture required is to separate the data and its management from its application. The architecture could be a two tier or three tier as shown in Fig. In this architecture three distinct roles are defined and three hardware platforms and made responsible to perform. the Data Management. The user requires the choice of using the data as it suits him the most. the information needs are dynamically changing. Hence the application logic has to be separate from the data.Sarras . DATA MANAGEMENT DATA MANAGEMENT DATA SERVER FUNCTION APPLICATION SERVER FUNCTION APPLICATION LOGIC PRESENTATION APPLICATION LOGIC (a) TWO TIER PRESENTATION (b) THREE TIER CLIENT FUNCTION Fig. However.ERP Architecture Any information system has three basic components. There is also a variability in the manner how the application logic is developed and presented. the Application Logic.
the ERP offers a basic business functionality. spread over to any length. pdfMachine . The network is typically the bottleneck in any client/server system. some users have particular needs for which they want an additional support through the tools or other modules. The logic which deals with the presentation and the specific needs of the user is left to the client platform as shown in Fig. what is important is the user environment and the information needs and how the user handles them? The best architecture. The GUI screens are so developed that the process running across the organization is mapped to the business flows instead of the discrete business functions.4. DATA NABAGENEBT SERVER APPLICATION LOGIC APPLICATION LOGIC PRESENTATION CLIENT Fig. client/ server tool set.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. in a given environment. However. This logic which deals with the data more is attached to the server platform. easy to understand and easy to maintain. 12. The technology solution are available to implement this philosophy. Most of these requirements are extensions to the basic business functions. For most of the customers. appropriately divided between client and server.Sarras . In the choice of architecture. These customer specific needs are met through a popular and a widely used. With the application logic. The GUI is chosen since it allows the customization for a particular business entity. the ERP solution uses a scalable architecture and a parallel processing technology by installing the suitable server at the required locations. is the one which is userfriendly. The ERP solutions are multi-users which are distributed over the organization.The servers play two distinct roles of handling the data and the application logic. 12.4 Client/Server Model – Architecture.USA . This ensure good performance with a continuous increased load conditions. It is very difficult to recommend one or the other architecture as the solution to overcome a typical requirement problem. Accompanying the network efficiency and the GUI. it creates a reduced traffic intensity due to GUI interface. where the data is being managed. Two main solutions are available to the designer and the implementor of the ERP. One is the Graphical User Interface (GUI) and the Network Management.
The business being complex requires a variety of systems to run efficiently. The presence of existing systems is not challenged or minimized by the ERP solution. In fact, most of the ERP solutions use open application programme interfaces that enable easy coexistence and integration with the legacy and the third party systems. The solutions also provides the gateways to the popular database which are used in business. The ERP solution are designed to make the office of the business paperless. It keeps all the business information online. Then, the users use the Work Flow Technology to move the process in a screen format from person to person for the changes, the approvals and the execution. With the multi-media technology, the servers can be configured to keep the business information online in any format, including the text, the spreadsheet, the image audio and the network video. The solution offers support for the electronic notifications, through the EDI, the E-mail, or the internet to the business partners. For example, you can create a purchase order, get it justified and approved by the authorized person sitting at the other location, attach the engineering drawing to the purchase order by accesses to the CAD system, assemble the documents of the purchase order, and have it sent through the EDI to a vendor located at a distant location without creating any the paper documents. ERP Solution structure The Enterprise Resource Planning solution structure is built in three layers namely, technology, business and implementation as shown in Fig. 12.5. Business Operations On the business side, it provides solution for the data entry, data capture, transaction processing and data base updates. It then support an analysis of the processed result in single or the multi-dimensions for one period or successive periods. It offers a support on the comparative analysis,
The budget versus the actual, the target versus the actual, the target versus the actual, the standard versus the actual and so on. The analysis also throws light on the exception conditions, for immediate attention and action. The ERP solution provides the decision making capabilities either built-in or through the decision support systems when it comes to implementation. It provides the database functionalities for data and information management. It then has the front end tools to develop the application in an exclusive manner. The ERP solution then handles the interfacing requirement to the legancy or the third party systems as a support to the main ERP solution. Using various information technology tools and application development tools, the application logic is developed to the business functionality. The tools are-report writers, interfacing tools, query processing tools, application development tools, the object oriented tools, etc.
Technology The technology side of the ERP solution is managed through the database management technology for data acquisition to data base creation, updation, and maintenance. The application development is done through the client/server technology, where the servers handle the specific or the general functions as the case may be and the client play the role of processing interactively and locally for meeting the information needs. The client/server implementation could be two tier or three tier, based on the design and the implementation strategy. To reduce the development effort and for ease of maintenance, the development approach is an object-oriented approach, where the class and the object libraries are built for reusability of the object and its code. Implementation The ERP implementation is multi-user and calls for the network usage for the work flow, communication and the access to the database (s) which may be at one location or distributed. The successful implementation of the ERP calls for a strong technology component appropriate to the environment. ERP Model and Modules The generic ERP package represents the commonly operated business model of the organization. It is built with the function models like the Finance, Materials, Marketing, Sales, and Personnel and their sub-modules. These modules are then integrated to perform ensuring data and information consistency and concurrency. The seamless integration of the modules allows the user at any level to take a micro and a macro view of the function and process view of the transaction across the function. A typical ERP solution has the following modules:
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" Business forecasting, planning and control (Business) " Sales, distribution, invoicing (Sales) " Production planning and control (Production) " Material management (Material) " Finance and accounting (Finance) " Personnel management (Personnel) Table 12.1 shows the sub-module details of each module. Table 12.1 Business Forecasting Sub Modules of ERP Sales Production Forecasing Planning
Personnel Human Resource Payroll
Order Control WIP
Balance Sheet Processing Schedules
Order Processing Order Execution Delivery Invoicing
Skill Attendance Inventory Analysis Control
Targets Starategy Control
Scheduling Analysis Despatch Control
12.3 ERP BASIC FEATURES General features " Separation of the programme code and the data areas. " Command language. " Screen based flow control. " Application logic. " common service functions such as the currency, date, editing, and help. " Diagnostic functions. " Transaction flow control. " Help functions. " Central table system for management of parameters, text and master data, online logical checks and validations. " Word processing, text editing. " Action messages. " Tuning. " Enterprise Modeling: Structure/Policy/Rules/Guidelines.
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pdfMachine . Production " " " " " " " " " " " Basic master data management. distributor management system " Receivable analysis " Market/ Customer / Product analysis " Market research information database " Marketing personnel management " Sales forecasting and budgeting. " Strategy formulation and implantation. scheduling and control. MRP. " Target fixing and allocation by the key parameters. WIP tracking. forecasting " Sales analysis. " Business planning in terms of the resources to execute.Business system " Business forecasting for products. " Business modeling for the strategy development and testing. Production-Materials interface.USA . valuation. Work order generation. analysis and control. DSS for resource planning. Production Planning : BOM. Sales " Basic data (master) management " Order processing " Despatching and invoicing " Order analysis. budgets and controls " Finished goods stores management " Dealer. Quality systems for data capture.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. groups. Work station/machine centre management. Process sheet. Bill of materials. Materials " Purchasing and procurement. " Information base management for management application. " MIS for strategy monitoring and control. MPS and capacity planning. Interface of CAD/CAM/CAE systems. Collection of unit data for valuation and costing. classification.Sarras . routing. markets.
Stock management and valuation. projection and planning. "Year end processing for balance sheet schedules. Loan management. valuation. Assets accounting. register. Subcontracting.Sarras . time management. incentives. Budgeting. payables and receivables. Stores ledger. Data integration with production. " Payroll accounting: salary.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. and contribution to various public and provident funds. Inventory analysis. wages. Maintenance pdfMachine . Balance sheet processing. planning and control. training and upgradastion. bonus. Finance " " " " " " " " " " " " " " General accounting functions. Letter of credit management. order accounting. recruitment.USA . Cash-flow management. " Depreciation accounting. " Capital work in progress. income tax and other deductions." " " " " " " " Goods receipt and issue system. " Human resources management: Planning. funds management. Fixed Assets " Fixed assets accounting: Inventory. product costing. Quotation/Enquiry processing. analysis. Cost accounting: cost centre accounting. " Personnel attendance system. Ledger. Personnel " Personnel data management. Bank reconciliation. accounts systems. Consolidation of accounts. Tax management status reporting. Working capital management. " Fixed assets retirement and disposal. material accounting and bill passing. Subsidiary ledgers. Excise/customer interface. disposal. " Personnel cost.
Since the whole solution is a package product.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. " Breakdown. " Maintenance management: Initiation. " Scalable architecture. the changes are easy to make. material. " Bringing out comprehensive reporting system for business decisions. Quality Control " System of data gathering to assess quality and measure against standard. more locations and more modules as well. " Analysis of quality by reasons and action taken. " Monitoring quality across the organization from input to output for operating decisions and business decisions. " RDBMS independent.Sarras . Since. Due to object oriented technology and the client server architecture. The Commerce and Corporate Laws differ from country to country and the ERP in such cases need customization to satisfy the local requirement of the business. " Analysis of quality by process. " Monitoring performances for maintenance action as all kinds of productive assets. " Seamless integration of modules." Plant maintenance planning. " Interface capabilities. conditional maintenance. Consolidation of Business Operations " Accounting by units and divisions with local focus. and cost accounting. execution. The ERP solution has advantages of fast implementation as the design and development is eliminated being a package. It can be implemented first on a smaller scale and expanded subsequently with more users. Most of the ERP solutions need some changes to suit changes to suit the environment. the manufacturer of the package brings pdfMachine . control. which are less at the server end and more at the client’s end. work centre location. one can implement the solution in a phased manner module by module. " Contract management. " PC download/ upload facility. " Independence of hardware platform. planning. it has modular structure. Characteristics of ERP Solution " Modular structure.USA . " Consolidation by accounts in corporate functions. " Building quality assurance data for equipment/ process/ technology selection. preventive.
front end tools. Due to strong interface capabilities. management can see the information in their perspective and take different view of the business. 4. releasing the burden on the middle management. 12. the human resource can be utilized better due to access to information across the databases distributed over the organization. Intelligent ERP download the decision making at lower level. Business operations transparency between business partners cutting down the execution time of critical business operation. Though tools. The processes become faster due to work group technology and application of work flow automation. it make the management alert at a number of points demanding the decision or action. pdfMachine . Simultaneous increase in the productivity of the business possible. and used by a particular organization.4 BENEFITS OF THE ERP 1. 10. 9. Better management of resources reducing the cost of operations. 8. they differ in feel. There are more than a dozen ERP solution available in the market each having its own specialty. 2. Planning at function and process level. 11. the ERP design is proactive. 5. paperless office is a newer possibility as communication is faster and systems get connected directly. Simultaneous atomization of the decision centers because of instant inducement through triggers or updates. they are characterized as described earlier. the interface tools. some of ERP solution is more useful and efficient in similar organization.Sarras . if installed on a particular hardware platform. processing efficiently and user-friendliness. Closer contact with the customer. E-mail. Customer satisfaction increase due to shorter delivery cycle. look presentation. technology and approach may be same or similar. The ERP still remain a valid solution with the expansion of business as it is a scalable architecture. the manner in which they are used decides the efficiency of the solutions. Due to faster processing technology and SQL.out newer versions of the product offering more facilities to the user to improve the utility of the solution. Some of these products are developed as an application in a particular organization and then turned into a packaged solution. The specific industry features have been taken care of more efficiently as customized solutions. Due to the support technologies like EDI. 6. and so on the package efficiency changes with the choice to tools. In view of this. Since the design / developer have a choice of RDBMS. Though. 12.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. office automation.USA . 7. Some of these packages run better. 3. Since.
16. The quality of decision making improve as the user decision maker is made alert and he is made knowledgeable and better informed dynamically. pdfMachine . the user service can be maintained at higher level. The ERP implementation automatically leads to the usage of the best business procedures bringing the consistency of operation in the world of business. making the ERP sensitive to the latest events in the business. With the use of the data warehousing and data reverse engineering. Due to the client/server architecture. the application of object technology and use of the front end tools. 18.Sarras . The ERP scope can be enlarged through the Internet/Intranet access.13. 14. the process changes can be easily carried out in a short duration of time. Hence. 17.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.USA . management becomes knowledge’s driven and the organization becomes a learned one. The tools available to the decision maker are friendly whereby he is equipped to make decision and execute it simultaneously. 15. market and technology.
6. Client server architecture and its implementation-two tier or three tier. viz. the technology. 10. Technology Evaluation Factors 1. 2. Organisation for product development and support. The global experience of the vendor and commitment to the product for long term. & D investment in the product. 8. R. the market offer a number of ERP packages. Financial strength of the vendor to sustain and handle the business and technology risk. Interface mechanism. Future plans of the vendor. Application and use of standards in all the phases of development and in the product. 7.CHAPTER-13 Enterprise Management Systems 13. 2. Ability to execute the ERP solution. 3. etc. Product share in total business of the vendor.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Vendor Evaluation Factors 1. scope.1 ERP SELECTION Since. Front end tools and back end data based management system tools for the data. an ease of implementation. Each product has its own USP and differs in a number of ways in content. 5. Data transfer. 12. 4. OLE/ODBC compliance. process presentation management. 5. Handling of server and client based data and application logic. 4. real time access.Sarras . Market reach and resource strength of the vendor. the solution scope. 9. Strength in the other technology knowledge and the ability to use them Perspective plan of the ERP improvement with technology development. Business strength of the vendor. 13. and architecture. pdfMachine . The selection can be made on three dimensions. 3. Object orientation in development t and methodology.USA . Business philosophy of the vendor. the vendor. 6. 11. Image in the business and in the information technology world. the buyer has a choice to make.
Product quality in terms of security. After that. it requires thorough understanding of the business. Since the ERP implementation is a two three years’s project. MS-Office. 10. Rating on performance. Since. 8. The level of intelligent usage of help error messages. It is advisable for the organization to form a committee for selection of the ERP SOLUTION. 7. Flexible design. sensitive business process. implement and train. and the socio-cultural factors. 11. ERP Solution Evaluation Factor 1. features and processes. 13. reliability. the ERP solution is a tool to change the style of business management. report writers. 11. A STRONG Information Technology person and a person from corporate planning function. Hardware-software configuration management. The ability to migrate to the ERP environment from present status. Such a study will help find out if the ERP is fit for the organization. 5. etc. IT SHOULD HAVE IMPORTANT FUNCTIONAL HEAD.7. Versatility of the solution for implementation on a platform with the project of saving the investment. dictionaries.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. the business issues. etc. as it is the most important and critical success factor. it would become a platform for the future expansions and growth. Solution architecture and technology. Down loading to PC based packagers. 9. the management criticalities. Documentation for system handling and administration. Product rating in its class of products. EDI. the ERP solution will sustain and be adequate for the current and the future business needs for a period of five to seven years. response and integration. Ease of use. The ability for a quick start on implementation. screen generators. 12. ERP fit for the business of the organization in terms of the functions. 2. Operating system and its level of usage in the system.USA . pdfMachine . The degree of deviation from the standard ERP product. This committee should prepare a requirement document spelling out the business goals. lotus notes. The methodology of selection will begin first with the study of organization in terms of the business focus. 4. Support system technologies like bar coding. The price of the ERP package is difficult to judge and often it is a negotiable point in favor of the buyer in competitive scenario. The committee should be headed by a CEO or his designated authority. 10. 3. Easy to learn. and precision in results. 9. 8.Sarras . screen painter and batch processor. critical application. 6. It is a very important to find out that the ERP is fit or not. communication network. business scope versus application scope and so on. imaging. Use of case tool.
All the vendors should be asked to submit a technical proposal explaining the fit of the ERP to the organization. etc.USA . In this process. the selected ERP vendors should be called for seeking the ERP offer. the committee should confirm whether the critical requirement of business. restructure the organization. the organization should be carrying out business process engineering and reengineering study. as many factors are intangible in nature. are available or not. Objectives Modules and deliverables Implementation methodology. it is not always possible to bring out a clear win in the evaluation.and objectives. In such an event. the critical functions. When such a document is ready. for a detailed security and evaluation. product demonstration should be arranged. processes. When the product presentation is oven. and they should be allowed to study the organization and its business. If some of them are not available then there is a possibility of work around to achieve the same result. 5. Resource allocation Responsibility division between the organization and the vendor. Scope of supply. Ideally. the committee should examine the trade off involvement in the selection.Sarras . The proposal should have the following details. 6. This information should be on how successful the vendor is. The short-listed vendors then should be asked to give the product presentation to the selected group of decision makers to seek their opinion on the product. in terms of information. Process of implementation Organisation of implementation. 2. 3. modify the processes functionalities before the ERP decision is made. The document should be given to the vendors. Simultaneously. It should not happen that organizational issue dominates the choice of the ERP and in the process the best product is rejected. in the implementation of the ERP? The strengths and the weaknesses of the vendor. pdfMachine . Though such an approach is appropriate. the futuristic scenario of business. process handling facilities. the product and the post sales processes should be ascertained. the committee should gather information on the experience of the other organization where the ERP is implemented. The submission of the vendors should be scrutinized by the committee for short-listing. procedures. the vendor should be asked to resubmit the technical and commercial proposal with price and the terms of offer. 4. business focus and customer deliverables. Once the committee makes the decision. 9. 7.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. A note on the management philosophy. practices and style will be a valuable input. A second evaluation note should be made for a comparative analysis of the ERP solutions and then a critical evaluation of this analysis should lead to the choice list. features. 8. Plan and schedules of hardware and software implementation. The choice list should be weighed by these points. 1.
potentially the ERP is designed for productivity rise. It is necessary to understand them to evaluate the ability of the ERP solution to satisfy these requirements. there should be clauses relating to safeguarding the interests of each other to cover the risk arising out of the technology failure.USA . the management must exploit it to its advantage by adopting the best practices or changing the practices through the business process reengineering. The official product literature 13. Since. Progress monitoring and control of the important events 11. features. The ERP is a tool to manage the enterprise resources to achieve the business objective. it after requires changes and modifications to suit the requirements of the business. Once a firm order is received the implementation begins with kick-off meeting between the vendor and the organization. 15. the study has been carried out by the vendor. The success of the ERP lies in its implementation with commitment. 13. Since it is a long term activity a preliminary planning is done to start the implementation. Commercial submission. the ERP is a product of several technologies. duties. Process of resolving the issue all levels 12. ! Price by module and number of users ! Payment terms.10. function. the vendor and organization enter into a legal contract. pdfMachine . initially. In such meeting the organizational issues are taken care of. Once the ERP decision is made. Requirement Definition and Description (RDD) Though. It should also include the clauses on issues arising out of unforeseen circumstances and how to resolve them with the legal remedy available to both the parties. follows the waterfall mode approach. Since.2 ERP IMPLEMENTATION The ERP implementation. Process of acceptance of the ERP by stages and linking with the payments. It is a supporting system and does not solve all the problems of business management. deliverables and the value components. These requirements may be of the data.Sarras . generally. In this phase of study the user are contacted for their requirement specifications. processes or reports. Such legal contract should list the obligations. the ERP is designed as a standard package. responsibilities. information. It is to be appreciated as a managerial tool and not as a labor saving device. It requires full participation of the organization. more in-depth study is taken up jointly by the vendor and the project in-charge of the organization. Association with the other vendor its purpose 14. Since.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A.
All the ERP packages provide standard features. 3. 5. A user meeting is arranged to explain the ERP and process of implementation. The purpose of such a document is to freeze any requirement to carry out further changes in the package. functions lists of the package used. The solution is tested on a sample data of substantial nature.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. two kinds of changes emerge. This could be business specific and customer specific. due to direct involvement of the users and the decision makers. Once the deviation RDD is made. After establishing the requirement definition and description (RDD) and mapping it with the standard RDD of the ERP solution. 4. is that it provides the revised specifications clearly to the designer and the developer to bring out the changes required in the design of the ERP. The implementation steps are given as follows: 1. The changes of made. pdfMachine . The solution on the recommended platform is loaded. The advantage of preparing the RDD and a deviation there from in that the users of the ERP get committed to the solution as they have thought the standard requirement provision of the ERP and the deviation required in the provision. The another distinct advantage of the RDD and the deviation from the RDD. the resistance to change is eliminated. These lists are examined vis-à-vis the requirements and new document is prepared called as the deviation RDD. It also further helps to assess the work load arising out of the changed requirement. come into picture for execution. the process design starts implementing the changes. 2. In this process. module testing and system testing for complete integration are taken. the DRDD (Deviation RDD) is prepared for changes in the solution and implementation. etc. As soon as the new RDD is prepared. generally. known as customization is provided.USA . The DERP (Deviation ERP) solution is tested. testing. The minor changes are cosmetic and / or in presentation. 6. and the computing process and so on. it should be approved by the authorized person in the organization. Such changes are time consuming and the vendor may charge additionally for such requirement fulfillment. where the ERP design needs to be changed. are then tested on a sample data and other steps of unit testing. In the evaluation of standard RDD.Sarras . Other changes may be minor and may not affect the design of ERP. The RDD and the DRDD is explained for understanding and approval. and they are generally at the lower end of the process. The changes are like the field change. The resource to carry out the changes in the system. The moment the changes are required the processes of design coding. one major. the report format modifications.
In short. longer the implementation time. 14. Each solution has its own peculiarities in terms of design. It the fit is higher. response. ledger. solutions and modifications carried out to make the solution more efficient and effective. better is the solution from all angles.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. functions and features. the choice should be based on the ERP fit for the organizations. Not all the ERP solutions are appropriate for the organization. functions and features.USA . 2. coverage of business scope. Some solutions are good for certain type of business and industry and not for all the businesses and industries. the customization will be less and the user acceptance will be higher. 8. The system performance is checked in terms of speed. Ideally. and the ERP solution and / or the hardware is turned for improving the performance of the solution. 7. 6. 3. trial balance. The major hassles in the ERP implementation are due to: 1. The change over from the manual system to the ERP solution are meticulously planned. Lower the acceptance. The limited awareness of the users and the appreciation of the Information Technology applications. The ERP implementation is carried out without properly evaluating the business processes and practices through business process reengineering and is preceded by restructuring of the organization. 13. A lack of clarity on the business requirement. The standard documentation of the ERP solution is changed to the changed version of the ERP. and technology. confirmation and finalization of the ERP implementation. The level of acceptance of the standard business processes incorporated in the system. resulting into a loss of efficiency and effectiveness of the solution. The resistance of the users in the acceptance of standard ERP solution. The solution is then demonstrated to the users for their understanding and confirmation. 12. pdfMachine . Higher the fit. 11. The choice of the ERP solution. taking care of the cut off dates. The users are trained to run the solution and resolve the difficulties in operations of the system solution. taking the support of the log system for the purpose of improvement. etc. 5. 4.Sarras . A logbook of the system usage is kept to note down the problems. the implementation cycle would be short. a review meeting with the user is conducted. and sales analysis are taken to confirm the integrity of the ERP solution. 9. 10. the opening balances. the data transfer etc.7. The ability of the users to change over from the old conventional systems to the technology based new systems. After three to four months working. Standard reports like checklists. the customer focus and the strategy of business and its impact on the ERP solution. architecture.
The ERP solution takes care of data integrity and consistency across the organization. In today’s competitive world. to define the problem and evolve the solution using the front-end tools.. The conventional MIS design is more or less embedded in the ERP solution. as a client. Once the ERP is built in the organization. provides the capability to modify the Management Information System from time to time as per the changing information needs. the EDI/D-mail. The solution operation is seamless. the management requires the information support in the process management and not in the function management. like the data replication. The effective uses of the variety of tools. due to its scope and coverage. and supported by a variety of tools. the information and its storage and. The ERP solution caters to this requirement very easily. enables Strategic Management based on the strategic information for decision making. and the application level processing logic is taken care in the server level giving freedom to the user. i. The ERP enables the work group management efficiently and effectively. the EIS. the bar coding.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. The front-end hardware and the tools are so powerful that an individual can develop his own MIS based on his decision making information pdfMachine . The ERP solution. The decision making support is required for the process optimization. The management attention on the focused area is easily possible. The ERP. The effective use of these variety of tools also speeds up processing. disregarding the hardware or the software platform. the work flow automation. The ERP solution is an integrated solution. over and above this. The management focus is shifting from the function to the process. It further helps to formulate the strategies to achieve these goals taking its implementation further. it takes care of the data. provides executive information for the strategic management of business.e. Besides the normal MIS reports required for the top management. define and resolve the problems. where the data processing. and the paging systems are built in ERP. They provide all the routine reports at any time for the middle management of the organization.There is a qualitative change in the MIS design due to the complexity of the business operations and the risk involved in handling the business. All the solutions use the client-server architecture in the solution. which may have multiple locations. the data warehousing. cuts down the operation cycle time and raises the ability of the management to take decisions.USA . The MIS is now required to maximize the process productivity and performance. therefore. The ERP design provides transparency to the users of information giving them an access to the sensitive information to locate. the Top Management also needs a set of the additional reports. The decision models are built across the business management functions. where the critical business processes and the critical success factors are a focus area.Sarras . the shift of decision making is towards strategic management of the business.
What care should be taken while selecting ERP package? 9. What is the concept of Enterprise Resource Planning? Why is ERP solution now possible? What role does technology play in ERP implementation? 2. However.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. 5. Why is implementation effort necessary even though ERP package is chosen? 8. 7. Can your say that if ERP is implemented. the MIS design is more flexible highly decision intensive and efficient. MARSHAL. the MIS is in place? Discuss. Make a small note on ERP package selection for management. SAP. the decision maker can operate as an individual in isolation from the others. MFG-PRO. functional. MIS design uses ERP which in turn uses other systems for inputs in terms of data capture. 10. Graphical User Interface. The ERP through such an MIS design improves the decision making skills of the individuals very effectively.D. user needs on information are satisfied? Discuss. pdfMachine . REVIW QUESTIONS of chapter 12 and 13 1.USA .needs beside the usual MIS like corporate. MAMIS. Study the literature of any one ERP package. if need be. ERP packages offer standard solutions for business operations. Can you be sure that if ERP solution is implemented. J. Edward. Explain the terms – Seamless integration. Features. Functionality. ORACLE.Sarras . etc. MIS in ERP environment is a sophisticated design serving the needs of the organization. MRP. transaction processing and data base creation. ERP along with other systems becomes an EMS. Explain. some amount of customization is necessary to suit the solution to specific organizations. What is ERP architecture? What is solution architecture? What is the difference between the two? 4. It provides autonomy in global system operations. and PRISM and match the offerings with your concept of ERP. With the ERP. 3. 6.
i. etc. purchase of white goods. Interface mechanism. Develop an application for bank reconciliation. 4. 3. conceptual. Explain as to how you would use Bar Code Technology in the personnel function. Develop a system model for personnel situation. payment of education fees. Assume that the bank gives a soft pdfMachine . The repayment of loan is through the salary paid to the employees every month.USA .. give a system overview on the following lines: (a) (b) (c) (d) (e) (f) System scope System objectives Output of the system Inputs to bring out the outputs Process design. etc. In this regard. and work experience of the candidated in each field. mathematical. The organization has issued bar coded identity cards with photographs to every employee. He is also interested In knowing the rejection of a number of persons against each skill factor in Profile. towards housebuilding. the loan management system and the payroll system. Develop an application for loan management and build an interface to the payroll system for loan installment deductions. engineering. Explain the use of this card in (a) Shop floor control function.e. The manager of the department should be Able to select person(s) against a skill profile of his interest. What care would you take in both the systems. and festival advances. (d) Stores management.EXERCISES 1.Sarras . so that the employee is not overburdened with the loan obligation and every month after the instalment deduction seventy per cent of the normal take home pay is maintained. (b) Work order control (c) Personnel movement in the premises. The society offers financial assistance by way of loan.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. when Human Resource database Is already available in the organization. 2. Assume that the Company maintains a human resource database in terms Of the various skills. The organization has a Credit Cooperative Society for the benefit of employees. such as technical.
the business is a seasonal one.00. A company has for strategic business units (SBUs) responsible for the assigned performance.USA . a production report indicating the performance of the production shop. specifying the cheque clearances against the accounts opened by the Company.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. An order of less than 100 boxes is not accepted. and process the same at the end of the shift ? The production shop is of the shop is of the following types: (a) (b) (c) (d) 8. strips. and also of those of the SBU. Design a report format and the input sources for the production of such a report. Draw a system flow chart for this application. A customer places an order for a gift box packed with the assorted gift articles. Diwali Festival. A box may contain one or more item but not exceeding four. what. At the end of the shift.copy of the bank statements. Job shop manufacturing Assembly line. design steps would you take so that the consolidated results are available by the third of the month ? The company6 would also like to build the MIS reports around sensitive accounts of the company. In large commercial transactions. the data of filled bottles should be sent to the main system for the shift production report. Packaging shop after manufacturing a variety of medicines. a quick response to the enquiry and order processing is necessary. A gift shop prepares gift boxes for sale at the time of New Year. in the form of tables. 6. four balance sheets are consolidated for the Company. At the end of the financial year. The shop has over 1000 gift articles which are uniquely identified by a bar code. Continuous process with by-products. capsules. Christmas. Study the L/C documents and its processing from opening of the L/C to the closure of the L/C Develop a small L/C Application to keep a track of the L/C transactions and the L/C monitoring and its interface to the finance system. pdfMachine . 5. The shop manager would like to use the counter for management of the process. the number of bottles broken are 20.000 bottles.Sarras . the normal payment terms are through the Letter of Credit (L/C). 7. 9. A manufacturing process is built in with the counter to compute the number of bottles filled. What kind of technology support is necessary to capture the data. Each SBU has a chart of account created for its business management. etc. At the end of 1. A production manager would like to have at the end of every shift. the process should stop for a shift. While designing the consolidated systems for the Company. an exception report should be sent to the shop manager for resetting the process of bottle filling. and for marriages. Since. The company has its own chart of account different than those of the SBUs charts of account.
The front end system should handle customer billing and the updation of inventory and the back end system should handle the procurement and the inventory management with the MIS reports to the management. It has a list of the approved subcontractors. including packaging. The warehouse and packaging is at the same location. Some are on a contract basis and some are chosen against the specific order requirement. delivery and billing. a front end and a back end. What methods you would suggest in the materials management system os that it helps the warehouse management. Suggest the analysis of inventory. Draw a system hierarchy to handle the subcontract function with a specific focus on: (a) Material accounting (b) Job accounting (c) Purchase accounting (d) Interface to production planning A large pharmaceutical company has four factory locations and eight warehouses for distribution of products to the wholesalers.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. aging. 12. 10. The gift shop has a standard price list and a standard list of the gift items. to handle this requirement. Identify the system issues in the subcontracting functionality and discuss its interfacing with the other application systems. The commercial aspect of the subcontracting is decided by the Purchase Division while the approval.Sarras . The shop has a small packaging unit in the same town from where the delivery and billing takes place. which would throw light on the movement. inventory and billing management would take place. Identify in the system the following. (a) (b) (c) (d) (e) (f) Masters Transactions Relations Processes Outputs MIS reports Design the system in such a way that a least paper work is necessary.USA . holding and disposal of the items. 11.000 stock keeping units. pdfMachine . the subcontracting was not a major activity so far. distribution management and production management A Super Shoppee Departmental Store wants to design a system whereby the proper procurement. choice. A company resorts to the subcontracting as an alternative to manufacturing in house.Draw an application system flow chart starting from enquiry processing to the order processing. All the orders are accepted with 70 per cent advance from the customers. The total number of items are over 10. it was not brought under main materials production management system. and job to be subcontracted is decided by the Central Planning. Since. Break the application in tow parts-front end and back end support. The systems manger of the Shoppee wants two systems. the communication is faster and the execution of the customer order is efficient.
(b) Manufacturing against the order. Also discuss the similarity and contrast in managing these applications. buyers. the response rate.Sarras . The data collected should be useful to conceptualise a new washing soap design and its specification Design a questionnaire in such a way that the data processing would be easy. 16. are common application systems in all the manufacturing and trading businesses. (d) Manufacture and sale from the stocks of a variety of products. 13. shortlisting. pdfMachine . scope. and the spending habits. transactions processes and the reports the system should provide. they would undergo a Company induction programme and the general management programme followed by a specific function management programme. and the front end desk operators and the procurement and inventory manager. A company wants about 20 management trainees from the 1st of January for supporting their growth plans of expansion and diversification.USA . interviewing and appointing them. Discuss the system parameters in the following business: (a) Spare parts for Airlines. etc. Design a questionnaire to assess the product preference in various washing soaps. the buyer behavior. 14. Design Sales Analysis requirements by suggesting the different analysis reports and its probable user and usage. application scrutiny. 15. The programme of recruiting the management trainees includes releasing the company advertisement.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Marketing department of a company requires information on the following entities : (a) Market segment (b) Product segment (c) Zones (d) Regions (e) Product groups (f) Stock keeping units (g) Sales representatives (h) Warehouses (i) Customer and types of customers. Enquiry processing and the order processing thereafter.000 household samples for assessing the market trends.Write a system write-up explaining the objectives. requirement. (c) Distribution of the white goods for sales. A consumer goods manufacture maintains 10. Design a system for the questionnaire you have designed including the output designs. After the appointments. The main factor in these systems is to provide quick response to the customer on his requirements. Also provide the queries which are ofter raised by the customers.
Lead time Service Price Delivery 1–2–3–4–5 1–2–3–4–5 1–2–3–4–5 1–2–3–4–5 Evolve your own decision rules to design the DSS for selection of the vendors.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. 17. The factors to be considered as follows. The factors and the point weightages are given to use them effectively in the DSS. Design the system scope in terms of subsystems and their relation and linkage to each other. design performance and also for designing a knowledge based expert system for repairs and service during the warranty period of the vehicle. before they are posted in various positions.The function management programme is in Personnel. These programmes would run parallel. Factor Technology Quality Reliability Field performance Weightage 10 20 20 50 100 20 30 20 30 100 Point scale of five 1–2–3–4–5 1–2–3–4–5 1–2–3–4–5 1–2–3–4–5 18. These models differ from each other in body and features. chassis. Suggest a data model for the knowledge database for using it to improve the design and the manufacturing processes in the company.Sarras . etc. How would you collect the data on the various factors for using the same in the DSS ? pdfMachine . Production. Materials and finance. For each activity in the network. transmission system. suspension electrical. Draw a PERT network model of the Management Trainee recruitment using the MS project package. At the end of these programmes. The company wishes to create a knowledge database on the Vendor-Complaint performance and reasons of the failure. and the other reliable data for evaluation of the vendor performance. An automobile manufacturer has eight distribution and service centers for four new models it has just introduced in the market. firm up subactivities which should be completed. a four week programme of Strategic Management of business would be conducted. while the engine. are the same. Design a Decision Support System for the vendor selection on the following basis.USA .
What are the measures of controls to ascertain the success on all factors ? pdfMachine . correctness.Sarras . Paging EDI 20.. In an ERP implementation.19. procedures and systems at the various unit locations. The corporate office is overlooking the performances of these units and produces a consolidated balance sheet for the Company. the following characteristics assume importance when it comes to designing the MIS for the corporate office. in a company having multi units operations. The important charactriristics are completeness.is a pdf writer that produces quality PDF files with ease! Get yours now! “Thank you very much! I can use Acrobat Distiller or the Acrobat PDFWriter but I consider your product a lot easier to use and much preferable to Adobe's" A. Discuss how would you achieve the highest level of satisfaction by introducing methods. concurrency and consistency in a all reporting under the MIS.USA . Map the following technologies against the application and state its use in the application : Personnel Production Materials Technology Bar Code Imaging Hand held terminals.
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