Chapter 1: INTRODUCTION TO

MANAGEMENT INFORMATION SYSTEMS

Topics covered:
 MIS Concepts
 Definition of MIS
 Role of MIS
 Impact of MIS & the user
 Management as a control system
 Support to the management
 Management Effectiveness & MIS
 Organization as a system
 Organization effectiveness

Management Information System (MIS): Concept

The elementary convictions of MIS were to process data from the

organization and present it in the form of reports at regular intervals.
This conviction was altered when a distinction was fabricated between
data and information. Information is an outcome of processed data, data
being a set of values. This conviction was further altered, that’s the
system should present the information in such a form and format that is
creates an impact on its user, provoking decision, an action and an
investigation. It was later realized that some sort of selective approach
was necessary for analyzing and reporting, hence the concept of
exception reporting was imbibed in MIS. Also, the need arose, for keeping
all data together so that it can be accessed by anybody and can be
processed according to their needs in different ways. This gave rise to the
concept of DATABASE, which proved to be much effectual.

Over a span of time, the concept of end-user computing using multiple

databases emerged, which unveiled a fundamental transition in MIS.
This transition was the decentralization of the system. When this became
actuality, the notion of MIS changed to decision-making system.

The foundation of MIS is the principle of management and its practices.

MIS uses the concept of management control in its design and relies
heavily on the fact that the decision-maker or manager is a human
processor of information. It relies on the system theory that offers
solutions to handle complex situations of the input and put flows using
theories of communication.
 INFORMATION
SYSTEMS

BUSINESS GOALS AND MISSION

APPLICATION OF PURE AND SOCIAL SCIENCES

APPLICATION OF PRINCIPLES AND PRACTICES OF MANAGEMENT

USE OF DATABASE AND KNOWLEDGE BASE

COMPUTERS AND INFORMATION TECNOLOGY

FIG: CONCEPTUAL VIEW OF AN MIS

EIS

BUSINESS
INFORMATION SYSYEMS

MISSION CRITCAL APPLICATIONS

FUNCTIONAL INFORMATION SUBSYSTEMS

DATABASES AND KNOWLEDGE BASE

DATA PROCESSING AND ANALYSIS SYSTEMS

OLTP, DATA AND VALIDATION SYSTEMS

FIG: PHYSICAL VIEW OF AN MIS

Therefore, MIS is an art and science of gathering, collecting, storing,

analyzing and disseminating information for managerial decision making
with due regard to the people of the organization.
MIS: Definition

MIS is prevalently demystified as the Information System, the

Information and Decision System, the Computer-based Information
System.
The MIS has more than one definition, some of which are given below:
 The MIS is defined as the system that provides information
support for decision making in the organization.
 The MIS is defined as an integrated system of man and machine
for providing the information to support the operations, the
management and the decision making function in the
organization.
 The MIS is defines as the system based on the data base of the
organization evolved for the purpose of providing information to
the people in the organization.
 The MIS is defines as a Computer-based Information System.

Role of Management Information System

The role of MIS is an organization that can be compared to the role of

heart in the body.
 The system ensures that an appropriate data is collected from various
sources processed, and then further sent to individuals, group of
individuals or the management functionaries: the managers and the
top management.
 It satisfies diverse needs through a variety of systems such as Query
Systems, Analysis Systems, Modeling Systems and Decision Support
System. MIS contributes to Strategic Planning, Management Control,
Operational Control and Transaction Processing.
 It helps Clerical personnel in the transaction processing and answers
the queries on the data pertaining to the transaction, the status of a
particular record and references on a variety of documents.
 It helps Junior management personnel by providing the operational
data for planning, scheduling and control, and helps in decision
making at an operational level to correct an out of control situation.
 It helps Middle-Level management in short term planning, target
setting and controlling the business functions.
 It helps Top management in goal setting, strategic planning and
evolving the business plans and their implementation.
 It plays an important role in information generation, communication,
problem identification and helps in the process of decision making

Thus, MIS plays a vital role in the management, administration and

operations of an organization.
Impact of Management Information System

Management Functions
MIS facilitates effective management of marketing, finance,
production and personnel. It eases the tracking and monitoring of the
functional targets. The functional management is informed about the
progress, achievements and shortfalls in the activity and the targets.
It helps in forecasting and long-term perspective planning. The
manager's attention is brought to a situation that is in exception in
nature, inducing him/her to take an action or a decision in the
matter.

Understanding Business
MIS uses the dictionary of data, entity and attributes. Respectively,
designed for information generation in the organization. Since all
Information Systems use the dictionary, there is common
understanding terms and terminology in the organization delivering
clarity in the communication and a similar understanding of an event
in the organization.

Systemization of business operations

MIS leads to streamlining the operations, which complicate the
system design. It improves the administration of business by bringing
a discipline in its operations, as everybody is required to follow and
use systems and procedures. This brings a high notch of
professionalism in the business operation.

Directing towards goals

It helps indirectly to pull the organization in one direction towards the
corporate goals and objectives by providing relevant information to the
people in the organization.

Management Efficiency
The fund of information motivates an enlightened manager to use a
variety of tools of the management. It helps him to resort to such
exercises as experimentation and modeling.

Reduction of manpower overhead

Since MIS works on the basic systems such as transaction processing
and databases, the drudgery of clerical work is transferred to the
computerized system, relieving the human mind for better work.
MIS and the User

Every person in the organization is the user of MIS. The people in the
organization operate at all levels in the hierarchy. MIS caters to the
needs of all.

Clerk
The main task of a clerk is to search the data, make a statement and
submit it to the higher level. A clerk can use the MIS for quick search
and reporting the same to the higher level.
Assistant
Assistant has the task of collecting and organizing data, and conducting
a rudimentary analysis of it. MIS offers user tools to perform such tasks.
Officer
Officer has a role of integrating the data in different systems and
disciplines to analyze it and make a critical comment if necessary.
Executive
Executive plays the role of decision-maker and a planner. He is
responsible for achievement of targets and goals of an organization. MIS
provides facility to analyze the data and offers the decision support
system to perform the task of execution. MIS provides an action-oriented
information.
Manager
Manager has the responsibility and accountability for business results.
He/She is a strategist and a long-term planner, a person of foresight and
analytical. MIS provides information in a structured or unstructured
format to take actions. MIS caters to his changing needs of information.

Through MIS, the information can be implemented as a strategic weapon

to ledge the threats to business, making business more competitive,
bringing about the organizational transformation through integration. A
good MIS also erects an organization seamless by removing
communication barriers.
Management as a Control System

A definition of control is the process through which managers assure

that actual activities conform to the planned activities, leading to the
achievement of the stated common goals. The control process measures a
progress towards those goals, and enables the manager to detect the
deviation from the original plan in time to take corrective actions before it
is too late. Robert J Mockler defines the points out the essential elements
of the control process. The basic steps of the control process are given in
the figure,

Establish Measure
Standards of Performance Corrective
Actua Action
Performance l Vs
Std

No Action

The management is a systematic effort,

- To set the performance standards in line with the performance
objectives
- To design the information feedback systems
- To compare the actual performance with the predetermined standards
- To identify the deviations from the standards
- To measure its significance and to take corrective actions in case of
significant deviations.

This systematic effort is undertaken through the management control

system.
A reliable and effective control system has the following features.

EARLY WARNING MECHANISM

This is a mechanism of predicting the possibility of achieving the goals
and the standards before it is too late and the allowing the manager to
take corrective actions.

PERFORMANCE STANDARDS
The performance standard must be measurable and acceptable to all the
organization. The system should have meaningful standards relating to
the work areas, responsibility, managerial functions and so on.

STRATEGIC CONTROLS
In every business these are strategic areas of control known as the
critical success factors. The system should recognize them and have
controls instituted on them.

FEEDBACK
The control system would be effective, if it continuously monitors of the
performance and sends the information to the control center for action.

ACCURATE AND TIMELY

The feedback should be accurate in terms of results and should be
communicated in time for corrective action.

REALISTIC
The system should be realistic to that the cost of control is far less than
benefits. Sufficient incentive and rewards are to be provided to motivate
the people.

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.

EXCEPTION PRINCIPLE
The system should selectively approve some significant deviations from
the performance standards on the principle of management by exception.
MIS: A support to the Management

The management process is executed through a variery of decisions

taken at each step of planning, organising, staffing, directing,
coordinating and control. The MIS aids deciion making suitably.

Decisions in Management
Steps in Decision
Management
Planning A selection from various alternatives-strategies,
resources, methods, etc.,
Organization A selection of a combination out of several
combinations of the goals, people, resources,
method, and authority
Staffing Providing a proper manpower complement
Directing Choosing a method from the various methods of
directing the efforts in the organization
Coordinating Choice of the tools and the techniques for
coordinating the efforts for optimum results
Controlling A selection of the exceptional conditions and the
decision guidelines

Management Effectiveness & MIS

'Negandhi Estafen' provides a good model (Fig a) for the analysis of

management effectiveness, which generates an enterprise effectiveness in
achieving goals and objectives. The model is puts a lot of emphasis on
the management philosophy and the environment factors on which the
effective ness is dependent. The environment factors provide the
opportunities to survive and grow with certain constraints, while the
management philosophy sets the guidelines for deciding the management
practices to run the enterprise.

While environment factors are difficult to control, it is left to the

management to change its philosophy towards the various players in the
business, viz., the employees, the consumers, the suppliers, the
government, the community and the shareholders. If the attitude is to
treat the employees as business partners, we empower them and create a
sense of belonging to the organization. Such an attitude will have an
impact on the management practices where the employee will play a
decisive role. It will affect the organization structure by reducing its size
and the reporting levels.

Environment

Management

Goal Setting

C C
O O O
P R S D O N
L G T I R T
A A A R D R
N N F E I O
N I F C N L
I S I T A L
N I N I T I
G N G N I N
G G N G
G

Information Support

MIS
If the attitude towards the consumer is changed to fulfill the expectations
giving rise to a higher satisfaction, then the management practices in the
product design, manufacturing and marketing will undergo a significant
change. The product life cycle will be then a short, 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.

The management practices therefore emerge out of the management

philosophy and the environment in which it operates. The management
effectiveness will largely depend on both these factors. The MIS design
would, therefore, be different depending upon the management practices
followed by several organizations in the same industry. Such design
improves the management effectiveness leading to an improvement in the
enterprise effectiveness.

FIG a: NEGANDHI ESTAFEN MODEL FOR ANALYSIS OF

MANAGEMENT EFFECTIVENESS

MANAGEMENT MANAGERIAL
PHILOSOPHY PRACTICES
ATTITUDE TOWARDS MANAGEME
EMPLOYEES, PLANNING NT
CONSUMERS, ORGANISING
SUPPLIERS, STAFFING
GOVENRMENT DIRECTING
COMMUNITY, COORDINATING
SHAREHOLDERS

ENVIRONMENT FACTORS

SOCIAL ENTERPRISE
ECONOMICAL EFFECTIVENESS
EDUCATIONAL
POLITICAL
LEGAL
Goals, Objectives & Targets

The process of management begins with setting of goals, objectives

and targets. The goals are long-term aims to be achieved by the
organization; objectives are relatively short-term milestones to be
accomplished, while targets generally refer to physical achievements in
the organization's business.

 The setting of goals, objectives and targets is a top management

function. It has its implications on the business operations and
profits.
 It considers social, technological, political, educational, economical
changes expected to occur in five to six years.
 The setting of goals, objectives and targets helps to pull the
resources of the organization in one direction and solve.
 It helps build strategies, frame policies and set the rules of
conducting the business.
 It provides an effective measure to monitor the managerial process.
 The people in the organization can have a common understanding
of the purpose of managerial process and business operations.
 The goals, objectives and targets become reference points for
strategic planning and operation planning.
 It further helps the management to identify key areas of business
and management attention.
 The performance appraisal of the manager become impersonal and
unbiased as it is done with reference to achievement of goals,
objectives and targets.
 Its advantage is that it stimulates the development of people and
provides motivation

Organization as a System

Each employee has needs which, if congruent with the goals and
objectives of the organization, should lead to high levels of performance
and job satisfaction. When individual needs and organizational goals are
not congruent, poor performance, resistance, and other dysfunctional
consequences can result.

The introduction of an information system can alter the relationship

between individual needs and organizational objectives. This section
describes an approach to viewing organizations from both the individual
and overall organizational perspective called Socio-technical approach, it
is useful for dealing with the effects of new information systems.

The Leavitt model describes the organization as consisting of four

interrelated components:
1. Task
2. Technology
3. Structure
4. People

The significance of Leavitt’s model for understanding organizational

change is that, because of the strong interdependence, a change in one
component inevitably has effects, planned or unplanned, on the others.

The implicit approach of most system designers is to focus on the task

and technology subsystems and completely ignore their effects on people
and structure. Technology refers here generally to all tools used in task
accomplishment.

TASKS

STRUCTURE
PEOPLE

TECHNOLOG CULTURE
Y

AN ALTERNATE MODEL OF ORGANIZATIONAL SUBSYSTEMS

MODIFIED FROM THE LEAVITT MODEL TO INCLUDE CULTURE
MIS: Organization Effectiveness

Management Information System (MIS) should be designed viewing the

organization as discussed earlier. MIS plays a very important role in
creating organization behavior which in turn sets the goals for
achievement. Technology & people decide the organization structure and
style of the management

GOALS

TECHNOLOGY
MANAGEMENT
TASKS STYLE
PEOPLE
ORGANISATION
STRUCTURE
CULTURE
Creates

Helps to achieve ORGANISATION

BEHAVIOUR

Modifies

ORGANISATION
MOTIVATION
Helps
MIS ORGANISATION
LEARNING

ORGANISATION
CHANGES

Organizational Behavior & Management Information

System