Chapter 1 Introduction

Before one can explain management information systems, the terms systems, information, and management must briefly be defined. A system is a combination or arrangement of parts to form an integrated whole according to some common principles or rules. A system is a plan or method of doing something. A system is an assembly of elements arranged in a local order to achieve certain objectives. The organization is also a system of people where people are selected on the basis of number, quality and ability and are placed in hierarchical order plan and execute the business activities to achieve certain goals and objectives. A system is a scientific method of inquiry, that is, observation, the formulation of an idea, the testing of that idea, and the application of the results. The scientific method of problem solving is systems analysis in its broadest sense. Data are facts and figures. However, data have no value until they are compiled into a system and can provide information for decision making. Information is what is used in the act of informing or the state of being informed. Information includes knowledge acquired by some means. It is processed data which in turn is collection of raw facts, observations and figures. Management is usually defined as planning, organizing, directing, staffing and controlling the business operation. This definition, which evolved from the work of Henri Fayol in the early 1900s, defines what a manager does, but it is probably more appropriate to define what management is rather than what management does. Management is the process of allocating an organization's inputs, including human and economic resources, by planning, organizing, directing, and controlling for the purpose of producing goods or services desired by customers so that organizational objectives are accomplished. If management has knowledge of the planning, organizing, directing, and controlling of the business, its decisions can be made on the basis of facts, and decisions are more accurate and timely as a result.

Definition of MIS
Management information systems are those systems that allow managers to make decisions for the successful operation of businesses. MIS refers broadly to a computerbased system that provides managers with the tools for organizing, evaluating and efficiently running their departments. In order to provide past, present and prediction information, an MIS can include software that helps in decision making, data resources such as databases, the hardware resources of a system, decision support systems, people management and project management applications, and any computerized processes that enable the department to run efficiently.

Within companies and large organizations, the department responsible for computer systems is sometimes called the MIS department. Other names for MIS include IS (Information Services) and IT (Information Technology). 'MIS' is a planned system of collecting, processing, storing and disseminating data in the form of information needed to carry out the functions of management. According to Phillip Kotler "A marketing information system consists of people, equipments, and procedures to gather, sort, analyse, evaluate, and distribute needed, timely, and accurate information to marketing decision makers." The terms MIS and information system are often confused. Information systems include systems that are not intended for decision making. MIS is sometimes referred to, in a restrictive sense, as information technology management. That area of study should not be confused with computer science. IT service management is a practitioner-focused discipline. MIS has also some differences with Enterprise Resource Planning (ERP) as ERP incorporates elements that are not necessarily focused on decision support. Management information system would mean a set of computer based systems and procedures implemented to help managers in their crucial job of decision making. The actual process of MIS will involve the collection, organization, distribution and storage of organization-wide information for managerial analysis and control. It is better understood if these components are understood. Management Information Systems (MIS), sometimes referred to as Information Management and Systems, is the discipline covering the application of people, technologies, and procedures collectively called information systems to solving business problems. Management Information Systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization. Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making, Business computers were used for the practical business of computing the payroll and keeping track of accounts payable and receivable. As applications were developed that provided managers with information about sales, inventories, and other data that would help in managing the enterprise, the term "MIS" arose to describe these kinds of applications. Today, the term is used broadly in a number of contexts and includes (but is not limited to): decision support systems, resource and people management applications, project management, and database retrieval application. Management information systems consist of computer resources, people, and procedures used in the modern business enterprise. The term MIS stands for management information systems. MIS also refers to the organization that develops and maintains most or all of the computer systems in the enterprise so that managers can make decisions. The goal of the MIS organization is to deliver information systems to the various levels of corporate managers. MIS professionals create and support the computer system throughout the company. Trained and educated to work with corporate computer systems, these professionals are responsible in some way for nearly all of the computers, from the largest mainframe to the desktop and portable PCs.

Components of MIS
The three components of MIS are: 1. Concept of Management 2. Information 3. Information system A. Concept of Management Management information Systems (MIS), sometimes referred to as Information Management and Systems, are the discipline covering the application of people, technologies, and procedures collectively called information systems to solving business problems. Management Information Systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization. Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making, e.g. Decision Support Systems, Expert systems, and Executive information systems. MIS - Management information System - a monthly (usually) generated by big companies to find out where they are standing out in the business. For example each department viz., Production, Marketing, HR, and Finance etc will report & submit their reports according the requirement of the management as below Production: No. of Units reduced, Wastages, Target for the month Vs achieved, Reason & justification of any downfall, At last backlog & proposed date of shipment. Marketing: No. Orders procured/executed/lost - Reason viz price high or Discount could not be extended, A detailed report on pros & cons of marketability. HR: Monthly Manpower turnout with reasons Finance: Interest recd/paid, Interest Lost due to delayed receipts. Finance charges incurred and so on B. Information It is other way considered as collection of data. In fact the words are different. Data refers to facts. These facts may be expressed in numerical, text, image or voice. Data usually take the form of historical records. As businesses have evolved, the need for both fast access to quality intelligence and independence at the business unit level have made it imperative and challenging to manage information assets more effectively, efficiently and wisely. Developing and implementing a complete strategy for how information about suppliers, customers, competitors and global markets is obtained, validated, stored, managed, accessed, analyzed and distributed is now central to organizational survival and profitability. To make the most of opportunities, organizations must maximize the business value of information and leverage investments made in all data management technologies. The

rewards will go beyond survival to quickness, compliance, innovation, and in the end, competitive advantage. The following are the several common ideas of information system in MIS a. It is the processed date b. It has an element of surprise value c. It has a value in decision making process. C. Information System: The next component of MIS is information system which is most loosely used in management literature. The information system is a system of group of interrelated components working together towards a common goal by accepting inputs and producing outputs in an organized transformation process. In this system there are three basic components or functions are involved. i.e., Input, Processing and Output. Input: It involves capturing and assembling elements that enter the system to be processed. In general what ever the date after collection to enter into the computing system for further processing is called input. For example. Raw Material, energy, data and human efforts must be secured and organized for further processing. Processing: After successful of input and involves transformation processes that convert into output. Example: Manufacturing process, human breathing process and mathematical calculations etc., Output: After successful of the processing and it involves transferring elements that have been produced by transformation process to their ultimate destination. Example: Finished products, human services and management information.

Role of MIS
A management information system is a system that has important tools to support, analyze, deliver and add reliability to any organization. It ensures that appropriate data is collected from various sources, processed and sent to needy destinations. Also this helps to solve businesses problems. The term MIS is often used to submit to a group of information management methods tied to the support of human decision making, e.g. Decision Support Systems, Expert systems, and Executive information systems. MIS stands for management information system. MIS is a mainframe or minicomputerbased system that provides predefined periodic reports on an organization's performance in formats tailored to the informational needs of different management levels: strategic, tactical, and operational. At its basic level, MIS monitors day-to-day activities and distributes information on those activities to middle management to support and enhance tactical decision-making. For

example, MIS not only gives middle managers the information they need to make informed decisions on how to best organize resources to achieve their division's goals, but also reports on whether those goals are being met. At the most senior levels of management, MIS provides the information necessary to make informed strategic decisions. Upper management uses MIS output to evaluate performance, manage resources, comply with regulatory requirements, and manage risk including assessing the effectiveness of existing risk management controls.

Impact of MIS
MIS provides several advantages to the organization: Ability to link and enable employees: Electronic communication increases the overall amount of communication within a firm. The most important aspect is that people from the various units of a corporation can interact with each other and thus horizontal communication is promoted. All the obvious advantages of quicker information availability is the outcome of this function of IT but it must also be remembered that too much electronic communication leads to increased alienation of employees due to increased impersonality. Increases boundary spanning: An individual can access any information in any part of the organization with the aid of the appropriate technology. This eliminates the need for the repetition of information and thus promotes non-redundancy. If information provided is adequate, one can deal with factors like business risk and uncertainties effectively. Ability to store and retrieve information at any instance: means that the organization does not have to rely solely on the fallibility of human error, which is subject to error and erosion. Information can be stored, retrieved and communicated far more easily and effectively. The information support improves the lack of knowledge, enriches experience and improves analytical ability leading to better business judgment. It helps managers to act decisively. Helps in forecasting and long term planning: A disciplined IS creates a structured database and knowledge base for all people in the organization. The information available in such a form that it can be used either straight away or using blending and analysis thereby saving managers valuable time.

Disadvantage of MIS: However, IT can often lead to information overload, meaning that managers have to sift through an insurmountable amount of stored data and thus hindering timely decision-making. This problem is not as serious as first thought, though. Information overload is not an IT problem but more of a documentation problem. Furthermore, management tends to adapt to IT problems once it gets used to the idea of the new technologies. Inaccurate reporting can lead to flawed decisionmaking and planning. MIS typically extracts data from many different financial and transaction systems running on various computer platforms, which can often

lead to inaccurate and inconsistent reports unless appropriate control procedures are in place. Even if the information is accurate, the predefined reports generated by MIS may not always anticipate the information needs of individual managers at all times; or the correct information is not available when needed, or is simply hard to access. Because of these deficiencies in MIS, managers are increasingly turning to interactive decision support systems to obtain the information they need for planning and control.

Process of management
Management in all business and human organization activity is simply the act of getting people together to accomplish desired goals and objectives. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Re-sourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources. Management can also refer to the person or people who perform the act(s) of management. The various decisions in management are: Steps in Management Planning Organizing Staffing Directing Coordinating and controlling Decision A selection from various alternativesstrategies, resources and methods etc. A selection of combination out of various combinations of the goals, resources, method and authority. Providing proper man power complement. Choosing a method of directing the efforts in the organization for the accomplishment of the goals Coordinating the efforts for optimum results and selection of exceptional conditions and decision guidelines.

Organization structure
Every organization is composed of certain parts. These parts then have their various functions and are interdependent on each other for a smooth functioning of the organization. An organizations structure is a framework that allots a particular space for a particular department or an individual and shows its relationship to the other. An organizational structure is a mostly hierarchical concept of subordination of entities that collaborate and contribute to serve one common aim.

An organizations structure may be of many types, the most common of these being: The hierarchical organizational structure The flat organizational structure. A horizontal organizational structure is what we call the traditional structure or at times, the bureaucratic structure where there are one or more levels between the most junior and the senior most employees. This helps in proper distribution of work but can be harmful in terms of efficiency and decision making. A flat organization is much more relaxed and so-called modern in approach where everyone directly reports to a single boss. This could provide greater speed in the decision making process but then the boss ends up taking care of a lot of things thus making delegation difficult. Organizations are a variant of clustered entities. The structure of an organization is usually set up in many styles, dependent on their objectives and ambience. The structure of an organization will determine the modes in which it shall operate and will perform. The various elements of organization as per H.J. Lewitt are: 1. 2. 3. 4. 5. People Task Technology Structure Culture

An effective organizational structure shall facilitate working relationships between various entities in the organization and may improve the working efficiency within the organizational units. Organization shall retain a set order and control to enable monitoring the processes. Organization shall support command for coping with a mix of

orders and a change of conditions while performing work. Organization shall allow for application of individual skills to enable high flexibility and apply creativity. When a business expands, the chain of command will lengthen and the spans of control will widen. When an organization comes to age, the flexibility will decrease and the creativity will fatigue. Therefore organizational structures shall be altered from time to time to enable recovery. If such alteration is prevented internally, the final escape is to turn down the organization to prepare for a re-launch in an entirely new set up. It should be an open system capable of adjusting itself to the changing environment.

Organizational behavior
Organizational behavior can be termed as the behavior of persons in an organization. It is an important aspect to understand others behavior in an organization. The understanding of other behavior helps in influencing them. Human behavior is directed by external and internal forces. The appropriate analysis of these forces proves useful in understanding the behavior of other persons in the organization. The understanding of behavior has proved useful for the managers. It helps them in directing human energy in accomplishing the set goals of the organization. The concept and study of organizational behavior delivers guidelines for influencing the behavior of persons in the organization. According to Keith Davis, it is an academic discipline that is concerned with understanding and relating human behavior in an organizational behavior. It focuses on the complex human factor in the organizations. It is done through identifying the causes and effects of the observed particular behavior. According to Joe Kelly, Organizational behavior can be explained as the systematic study of the nature of the organizations. It thoroughly focuses on factors such as the origination of organization, its growth and development and organization effect on its members and other relative organizations. The study of OB has proved beneficial in many ways. The benefits of studying OB are as follows: 1. OB is a systematic study of the actions and attitudes that people exhibit within the organization. It also helps any individual to understand his behavior. 2. OB has proved instrumental for managers in getting their work done effectively. 3. OB lays emphasis on the interaction and relations between organization and individual behavior. It works as a positive attempt in fulfilling psychological agreement between organization and the individuals. 4. OB delivers job satisfaction to employees and helps in developing work-related behavior in the organization. 5. OB helps in building motivating climate in the organization.

6. OB helps in building cordial industrial relations. 7. OB smoothes the progress of marketing by providing deeper insight of consumer behavior and motivating and managing field employees. 8. OB helps in predicting behavior and its application in meaningful way delivers effectiveness in the organization. 9. OB implies effective management of human resources. 10. OB helps in improving functional behavior within the organization. It helps in attaining higher productivity, effectiveness, efficiency, organizational citizenship. It works effectively in reducing dysfunctional behavior at work place like absenteeism, employee turnover, dissatisfaction, tardiness etc.