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IC: 920316-14-6447
ID: UKTB-00017/0913





This study is fundamentally about an analysis of management information system and its
impact on decision making in an organization and eventually on hierarchical execution. In the
beginning this work analyses effect of management information on decision making of Tesco
of which I want to analyse the management information system in this study. Next it
discusses about significance of sharing information within organization and how information
support strategic decision making. It finally explains about the best approach to evaluate
information management system in an organization.

Management Information System (MIS) has been an increasingly used tool in the
institutionalization and making decisions. Decision Support System (DSS) are a subset of
MIS, intelligent decision making. However, despite the immense benefits that results from
using MIS in decision making, some critics have, reportedly, that MIS poses surmountable
detrimental effects to organizations and should thus be used sparingly or avoided if
possible(Demetrius, 1996). In order to define MIS. It must be principally divided into the
three facets that constitute it-which are: management, information, and systems. It can be also
defines as the process of through which managers plan, organize, initiate and control
operations within their businesses (Kumar, 2006).
Management Information Systems refers to a system that uses information in order to ensure
appropriate management of businesses. Fundamentally, all the facets of MIS run
concomitantly in order to ensure overall efficiency of the whole system. Failure in one part
means overall failure for the other parts since they are all designed to function
interdependently (Davenport & Short, 1990).
Customer Relationship Management (CRM) is the key factor behind the successful
enforcement of strategies which ensure customer pleasure, loyalty and retention thus
increasing sales and repeat purchases of a company (Feinberg &
Kadam,2002;Kotorov,2002;Anton & Hoeck,2002)


Tesco is Britains leading food retailer and the third biggest in the planet. Its first store was
opened in the year 1929 in London and by the early 1960s, Tesco was a recognizable
gimmick of most UK high avenues. In the wake of joining the eighties pattern for huge away
stores, in the 1990s the organization began spearheading a lot of people new advancement. It
created new store ideas, for example, Tesco Metro, a downtown area store helping
neighbourhood customers, and Tesco Express, the first UK petrol station that comes with
convenience store. In 1995 the organization presented its Clubcard , the UKs first client
dedication card, and two years after the formed agreement on a joint venture with the Royal
Bank of Scotland to offer an extent of financial services . The year 2000 marked the
beginning of which was based on the once more existing stores and, with low
capital use, was beneficial from the begin a key inward prerequisite. Tescos worldwide
operation, which began in 1994, has consistently extended and now represents a large portion
of its aggregate retail space. Since 2000 there has likewise been expanding concentrate on
building non-sustenance deals both in store and online with the come about that, for instance,
Tesco is currently the UKs biggest CD retailer.(,2014)
Development in Tesco is seen as key for its customers and additionally to its business. As
such the company focuses equally on product and additionally transform advancement.
Centre to Tescos advancement achievement has been its concentrate on overseeing edges.
Right from the begin the organizations fixation on productivity has been utilized to keep
costs low and, in 2007, Tesco dealt with 1.8% collapse over its product offerings. The
organization has likewise centred around making the shopping knowledge as simple as could
reasonably be expected for clients be it in hypermarkets, small stores or even online. Tesco
Express has headed the move of sustenance retailing go into the group and now
proceeds with sales of more than 700 million pounds and preceding profits of more than 35
million pounds for the business. In the UK, the administration achieves 96% of the
population and controls more than 170,000 requests a week.
Like some of its companions, Tesco likewise intends to enhance administration and give
preferred esteem rather over focus on valuing alone. These standards are conveyed over the
business into non-sustenance, administrations and its universal operations. To empower this,
the organization pays considerable focus on outfitting the inventiveness of its workforce and
urges staff to approach with plans. The organizations ability in process management applies
almost as much to its thought administration as it does to logistics and store layout.
A key part to Tescos development is the utilization of overall focused on own-name brands
including the up-business Finest and low-price Value labels. To drive this Tesco has
headed the field in business sector understanding. Its Clubcard, the most successful loyalty
card in the sector, provides Tesco with a class-heading capability to spot developing patterns,
draw in purchasers and impact conduct of optional clients to bring them into the fold. Tesco
also operates in the following markets: China, Czech Republic , Hungary , India, Japan
,Malaysia ,Poland , Republic of Ireland, Slovakia, South Korea , Thailand , Turkey ,UK, and


Information is known as the refined and processed form of data which can be interpreted and
understood by the recipient of the message. Information is more meaningful than data and is
used for making strategic decision making in an organization. For example the facts like
number of educated people, male and female etc., gathered in Census are data and which are
used by government to generate information such as literacy rate or development level of
country (Blazey,2008)
It is accordingly information for Tesco Plc refers to the figures of sales and income,
expenditure, number of people working, leaving and so on, which are very important and
useful for making decision in the organization. For example, if there is high operating
expenses than income from the business or diminishing return and increasing expenses then
the information for the organization is decreasing operating efficiency and performance of
organization which means organization is failing to perform well and losing its market. So,
managers have to use the data information for taking further decision about business strategy
and human resource management.
The key components of MIS are Decision support systems, Knowledge management
systems, Transaction processing system, Supply Chain Management system,Customer
Relationship Management System .( Laudon & Laudon,2014)
4.1 Decision support systems
Increasingly corporations are attempting to make more informed decisions to improve their
bottom lines. Some may think is the way to use better information and better models to
encourage better decision making as business intelligence. One way to accomplish the goal of
bringing together the concurrent information and models for informed decision making is to
use Decision support system (DSS). Decision support system are computer-based systems
that bring together information from a wide variety of resources,that assist in the organization
and analysis of information, and facilitate the evaluation of ideas underlying the use of
specific models. In short, these systems allow decision makers to access related data across
organization as they need it to generate choices among alternatives. Organization uses DSS
for the following demands:
1) Analytical tools are more sophisticated, including pattern recognition and machines
learning capabilities
2) Analytical tools are user-friendly and easy to use
3) Upper level managers who uses are more comfortable with the usage of computers.
4) Remote computing can be enabled and a variety of devices can interact and get connected
which makes it more convenient
5) ERP(Enterprise resource planning), POS (Point of Sales) and data warehouse make more
data available for further usages.
6) Databases are more able to communicate to one another
7) Information arrives faster and continuously
8) Competitors have also almost similar technological data.
9) Global competition for resources and customers increases the needs of information
10) Continuous changes of market demands.
11) Changes in regulatory requirement
12) Always corporate leader would want fact-based decisions.
Todays analytics provide more than just the profit level or sales quantity of a store. With new
data mining tools managers can now get insights into why sales hit specific levels as well as
what is likely to happen next month, thus giving them factors that once can be manipulated to

improve performance. By analysing vast quantities of data, managers better understood what
drives different categories of shoppers. This, in turn, stimulates decisions such as how to
rearrange store layouts, stock shelves and prices of item. Once shopping behaviours and
preferences are understood, store then can tailor offerings accordingly to differentiate
themselves from competitors. Britains T
esco relies on mined data for most decisions. Including the development of house brands.
4.2 Knowledge Management System(KMS)
Knowledge management systems is a form of informational systems that refer to the process
of managing informational knowledge in a company. Which means IT-based systems
developed to support and enhance the organizational processed of knowledge creation,
storage/retrieval, transfer and application. Although not every KMS initiatives includes an
introduction of IR, and admonitions against and a solid ground on IT at the expense of the
cultural and social facets of KM are common( Davenport & Prusak,1998), many KM
initiation relies on IT as important key. While IT does not apply to all of the issues of
knowledge management, it can support KM in many other ways. A very common application
of KMS is the production of knowledge networks (Ruggles,1998).
The idea of a KM system is to enable employees to have ready access to the organizations
documented base of facts, sources of information, and solutions. For example a typical claim
justifying the creation of a KMS might run something like this: an engineer could know the
metallurgical composition of an alloy that could reduce the sound in gear systems. Sharing
the information with the whole organization could lead to a more effective engine design and
would probably lead to better ideas for improvement.
An example from Tescos case is when they have decided to proceed with the implementation
of an online ordering system that gets customers connected with the warehouse and the
suppliers. Some of the benefits of KMS are increased order processing capacity, reduced
hardware cost, increased flexibility in maintaining supplier relationship, better integration of
programs, increased reliability in day to operations.
4.3 Transaction processing system(TPS)
Operational managers uses this system so called Transaction processing system(TPS) which
helps to keep track the basic activities and also the transactions of the company, which
includes sales, receipts ,cash deposits, payroll, credit decisions and also process or flow of
materials in a production factory. TPS is a fully computerized system that allows to perform
and record the day to day transaction which are necessary to run the business, for example
like sales order entry, hotel reservations, payroll, employee record keeping and shipping.
Managers need TPS to monitor the status of internal operations and the companys
relationship with external environment. TPS does also help in providing the major
information for other system and business function to work together and support. ( Laudon &
Laudon , 2014)
Tesco benefits from the TPS in various ways, where the system enables to hold and collect
information of customer purchases, especially those with the customer loyalty card. Besides
that, it helps to assist in allowing to distinguish customers which prefers certain segments of
product from the buying pattern, thus Tesco offers tailored promotion according to the liking
of customers which concurrently helps to boast the sales. It also helps to automatically link
with the suppliers where stock are re-ordered as soon as it has been sold, greatly diminishes

the physical effort of stock ordering and reducing the errors involved with the conventional
ordering method. Higher effectiveness of customer service as the prices can be adjusted
easily, a larger choice of products can sold and delivered to customers at a much lower price.
EPOS (Electronic Point of Sale) system is used and it is one of the part of TPS used by Tesco.
EPOS helps to scan barcodes and communicate with the organization system. This system
will keep record of all the transactions and stock which has to be replenished, probably in a
batch system that can be then transferred to main system at the end of the day. This
information will be made available for the higher management for generating reports and will
provide the distribution unit with delivery order for the next and coming days. This
information also will be provided for 3rd party suppliers for further actions by them.
4.4 Supply Chain Management System (SCM)
Organization uses supply chain management (SCM) systems to help in managing the firms
relationship with their suppliers. These systems help their suppliers, purchasing firms, the
distributors and also the logistics companies to share information about orders, productions
and inventory level, and the delivery of products and services so they can source, produce,
and deliver goods and services in an excellent manner. The end result of the objective is to
achieve efficiency by purchasing the right amount according to needs which helps lower the
cost and thus increases the profitability level. With all the information that can be gathered
from those involved in this system to be functional, managers are able to make better
decisions about how to organize and schedule sourcing, production and distribution ( Laudon
& Laudon,2014)
Tesco is a very customer focused retailer. They are the first to introduce loyalty club cards to
their customers. The principle behind introducing the club card system is to gather as much
information as possible. Tesco collects information about customers buying habit, family,
finance, religion, race, employment, mental health.(Tesco Annual Report,2014)
Tesco stores generally attracts many customers and each customer has different expectation
from Tesco. The order qualifiers for Tesco are availability of the products and in store service
and the order winner is price. For different customer group different product ranges are
offered. Tesco offers many cheap products but it also offers range of Tesco Finest products
for premium customers.(Tesco Annual Report,2014)
Tescos supply chain is very complex in nature. In UK, they source milk locally from the
major suppliers like Dairy Crest, Arla and Robert Wiseman. There are 1361 farmers in welsh
who supply beef and lamb. Tesco source products with short life locally and all other
products are sourced through international sourcing office in Hong Kong. The office source
almost 60% of the clothes and 40% of the non-food items sold in UK through 800 suppliers
in Asia. The office takes care of 50000 products and all their related activities such as
designing ,sourcing ,production and ensuring quality.(The Telegraph,2009)It has 24 depots in
UK to supply products to different stores on time. This well spread distribution centres
enables quick deliveries to all the stores.
The store managers manage promotions in store and mark down prices of the perishable
goods as and when required. The point of sale information helps distribution centre to
continuously replenish the goods and at the same time same information is sent through
electronic data interchange to suppliers. There are 24 depots which include 6 non-food depots

with a fleet of 2000 vehicles and 4000 trailers serving 2482 stores. The food products come
to depots and kept in three places of assembly. The temperature of each assembly area is
maintained differently, products such as fruits, eggs, breads and cakes are stored at 120C,in
second area cheese, meat, butter and other frozen items are stored at 10C and in third area
frozen food is stored at 260C.These depots act as transfer points and not as storage facilities
as the products are perishable. Every day, a total of 200 of 20ft containers containing TV sets,
clothes and other non-food items are shipped from Hong Kong to UK and Tesco uses
Advanced Shipment Notification(ASN) to inform distribution centres about arrival of these
deliveries. To manage the demand uses 19% third party warehouse and 41% of goods are
carried by third party logistics providers (Tsinopoulos and Mena,2010)
Tesco uses its market power to launch its own branded products in all segments and offers
good, better, and best products.It offers 2200 Tesco value,2300 Tesco and Tesco Finest
products along with Tesco Healthy Eating, Tesco organic and Tesco kids (Tsinopoulos and
Mena,2010). More than 70% of the Discount Brands at Tesco are delivered ready packing.
Tesco do not make these products itself, they have outsourced these activities to 44 countries
in the world mainly Asia. In 2009 Tesco sourced 53 million pairs of socks though its
international sourcing office (Tesco Annual Report,2014)
4.5 Customer Relationship Management (CRM) system
Customer relationship management (CRM) system used to help manage their relationships
with their customers. CRM systems helps to provide information that can coordinate to all of
the business processes that deals with customers in sales, marketing, and service to optimize
revenue, customer satisfaction and customer retention. This information helps firms to
identify, attract, and retain the most profitable customers: provide better service to existing
customers; and increase sales. (Laudon & Laudon ,2014)
Tesco being the first to introduce customer royalty card which is named Tesco Club Card.
Since the beginning, it has been a powerful tool of customer relationship management, more
than 150,000 Tesco customers are regularly receiving magazines having the latest and
exclusive offers. These magazines have advertisement, articles and latest news on the
products and services. Tesco Clubcard is a loyalty scheme which has been introduced to
retain and gain loyalty of the customers. Effective practices of CRM have also been expanded
throughout the world and more than 8 million customers are contacted through the adopted
tools of CRM by Tesco. In order to stay in touch with the existing and potential customers, was introduced in the year 2000. All these efforts are having positive impacts
on customers decision making process. Tesco Clubcard gives lot more privileges to its
customers not only in terms points but also deals and this deals are tailored according to
specific category of customer spending group. (Tesco,2012)

Technology is major macro-environmental variable which has largely effected in a good
manner for the development of many of the Tesco products. The new technologies benefits

the company and the customers: customer satisfaction rises because goods are readily
available, services can become more personalised which can be seen from the preferred deals
to customers and also shopping more convenient manner. The launch of the Efficient
Consumer Response (ECR) initiative provided the shift that is now apparent in the
management of food supply chains ( Datamonitor Report,2003). Certain technologies used by
Tesco stores includes wireless devices, intelligent scale, Electronic shelf labelling, selfcheckout machine and radio frequency identification (RFID).
The adoption of Electronic Point of Sale (EPOS), Electronic Funds Transfer Systems
(EFTPoS) and electronic scanners have greatly improved the efficiency of distribution and
stocking activities, with needs being communicated almost in real time to
In terms Customer relationship management Tesco has been proven to be successful in
retaining customers and maintain a great satisfactory rate among them. This was made
successful with the Tesco Clubcard and online purchase with delivery too (Tesco,2014).
In Malaysia, Tesco has expanded all over Malaysia rapidly and still growing and this due to
the local government support and also the loyal customers who believes in the quality of
services delivered by Tesco. Tesco had expanded its wing to Malaysia last 6 years and they
have been a strong competitor to all the major hypermarkets here.
Tesco being the 2nd largest hypermarket in the planet after Wal-Mart of US, the success of its
current standing in the world and also in the heart of its many faithful customers can be
denoted by customer focused business. This customer focused business largely engineered
with the great help information systems that includes DSS,TPS,KMS,CRM,SCM and a few
others. All these mainframe systems has proven to bring success and positioned Tesco to
where it is currently. In fact, the extreme expanding capability actually came from the help of
the mainframe system which keep tracks and manages well of all the transactions and
records. In order to maintain the pace and keep competing, Tesco has to move ahead by
investing more and more on ICT in terms of MIS, the history of Tesco has showed that
diversification of Tesco from food to non-food products has been beneficial, thus further
diversification into other business segments that can help to boast even more sales would be
also realistic. Even this decision making, needs the help of DSS besides using the power of
KMS to evaluate the possibilities.

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