INTRODUCTIONN OF MANAGEMENT INFORMATION SYSTEMS (MIS)

Management

Management covers the planning, control, and administration of the operations of a

concern. The top management handles planning; the middle management concentrates
on controlling; and the lower management is concerned with actual administration.

Information

Information, in MIS, means the processed data that helps the management in planning,
controlling and operations. Data means all the facts arising out of the operations of the
concern. Data is processed i.e. recorded, summarized, compared and finally presented
to the management in the form of MIS report.

System

Data is processed into information with the help of a system. A system is made up of
inputs, processing, output and feedback or control.
Thus MIS means a system for processing data in order to give proper information to
the management for performing its functions.

Definition

Management Information System or 'MIS' is a planned system of collecting, storing, and

disseminating data in the form of information needed to carry out the functions of
management.

Objectives of MIS

The goals of an MIS are to implement the organizational structure and dynamics of the
enterprise for the purpose of managing the organization in a better way and capturing
the potential of the information system for competitive advantage.
Following are the basic objectives of an MIS −
 Capturing Data − Capturing contextual data, or operational information that
will contribute in decision making from various internal and external sources of
organization.
 Processing Data − The captured data is processed into information needed for
planning, organizing, coordinating, directing and controlling functionalities at
strategic, tactical and operational level. Processing data means −
o making calculations with the data
o sorting data
o classifying data and
o summarizing data
  Information Storage − Information or processed data need to be stored for
future use.
 Information Retrieval − The system should be able to retrieve this information
from the storage as and when required by various users.
 Information Propagation − Information or the finished product of the MIS
should be circulated to its users periodically using the organizational network.

Characteristics of MIS
Following are the characteristics of an MIS −
 Long Term Planning -It should be based on a long-term planning.
 It should provide a holistic view of the dynamics and the structure of the
organization.
 Systems Approach -It should work as a complete and comprehensive system
covering all interconnecting sub-systems within the organization.
 Management Oriented - this implies that the management actively directs the
system development efforts. It should be planned in a top-down way, as the
decision makers or the management should actively take part and provide clear
direction at the development stage of the MIS.
 Need Based -It should be based on needs of managers at different levels i.e
strategic, operational and tactical information of managers of an organization.
 Exception Based -It should also take care of exceptional situations by reporting
such situations. This means that in an abnormal situation, there should be
immediate reporting about the exceptional situation to the decision –makers at
the required level.

 Future Oriented -It should be able to make forecasts and estimates, and generate
advanced information, thus providing a competitive advantage. Decision makers
can take actions on the basis of such predictions.
 Integrated -It should create linkage between all sub-systems within the
organization, so that the decision makers can take the right decision based on
an integrated view.
 Common Data Flow - It should allow easy flow of information through various
sub-systems, thus avoiding redundancy and duplicity of data. It should simplify
the operations with as much practicability as possible.
 Sub System Concept - Although the MIS is an integrated, complete system, it
should be made in such a flexible way that it could be easily split into smaller
sub-systems as and when required.
 Central database -A central database is the backbone of a well-built MIS.

Characteristics of Computerized MIS

Following are the characteristics of a well-designed computerized MIS −
 It should be able to process data accurately and with high speed, using various
techniques like operations research, simulation, heuristics, etc.
 It should be able to collect, organize, manipulate, and update large amount of
raw data of both related and unrelated nature, coming from various internal
and external sources at different periods of time.
 It should provide real time information on going events without any delay.
 It should support various output formats and follow latest rules and regulations
in practice.
 It should provide organized and relevant information for all levels of
management: strategic, operational, and tactical.
 It should aim at extreme flexibility in data storage and retrieval.

Components of MIS and their relationship

A management information system is made up of five major components namely people,

business processes, data, hardware, and software. All of these components must work
together to achieve business objects.

People – these are the users who use the information system to record the day to day
business transactions. The users are usually qualified professionals such as accountants,
human resource managers, etc. The ICT department usually has the support staffs that
ensure that the system is running properly.

Procedures/processes – these are agreed upon best practices that guide the users and
all other components on how to work efficiently. Business procedures are developed by
the people i.e. users, consultants, etc.

Data – the recorded day to day business transactions. For a bank, data is collected from
activities such as deposits, withdrawals, etc.

Hardware – hardware is made up of the computers, printers, networking devices, etc.

The hardware provides the computing power for processing data. It also provides
networking and printing capabilities. The hardware speeds up the processing of data
into information.

Software – these are programs that run on the hardware. The software is broken down
into two major categories namely system software and applications software. System
software refers to the operating system i.e. Windows, Mac OS, and Ubuntu, etc.
Applications software refers to specialized software for accomplishing business tasks
such as a Payroll program, banking system, point of sale system, etc.

Network resources: Telecommunications technologies and networks like the internet,

intranets and extranets. The concept of network resources emphasizes that
communications technologies and networks are a fundamentals resource component of
all information systems. Network resources include:
  Communications media which includes twisted pairs wire, coaxial and fibre optic
cables and microwave, cellular and satellite wireless technologies.
 Network infrastructure this generic category emphasizes that many hardware,
software and data technologies are needed to support the operation and use of a
communication networks.
INFORMATION CONCEPTS
The word information is used commonly in our day to day working. In MIS, information
has a precise meaning and it is different from data.
Information has a value in decision making while data does not have.
Information brings clarity and creates an intelligent human response in the mind. In
MIS a clear distinction is made between data and information.
Data is like raw materials while the information is equivalent to the finished goods
produced after processing the raw material.
Information has certain characteristics/importance. These are, information:
Improves representation of an entity
Updates the level of knowledge
Has a surprise value
Reduces uncertainty
Aids in decision making
The quality of information could be called good or bad depending on the mix of these
characteristics. 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.
Data is defined as groups of non-random symbols in the form of text, images or voice
representing quantities, actions and objects. Whether an entity is a data or information,
it must be transferred through communication from the Source to the Destination
without loss of content.
The poor quality of information due to various factors would create confusion and
misunderstanding, which is equivalent to a Noise and a Distortion in the
communication model.
A good MIS communicates the information without a noise and a distortion to the user.
Information Presentation of the information is an art. The data may be collected in the
best possible manner and processed analytically, bringing lot of value in the
information; however, if it is not presented properly, it may fail to communicate
anything of value to the receiver.
The degree of communication is affected by the methods of transmission, the manner of
information handling and the limitations and constraints of a receiver as the
information processor and the organization as the information user. The methods used
for improving communication are summarization and message routing. The concept of
summarization is used to provide information which is needed in the form and content.
The information can be summarized in a number of ways.
 The principle behind summarization is that too much information causes noises and
distortions, i.e., confusion, misunderstanding and missing the purpose.
The summarization suppresses the noise and the distortions.
Another method of improving the degree of communication is through message
routing. The principle here is to distribute information to all those who are accountable
for the subsequent actions or decisions in any manner. That is if the information is
generated with a certain purpose for a primary user, then such information may have
secondary purposes to some other users in the organization.
This is achieved by sending the copies of the reports or documents to all the concerned
people or users.
The principle of the message routing achieves the spread of information to the
appropriate quarters.
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 tendency should be curbed. Further, the decision maker may call for the
information on the grounds that, just in case required, he should readily have it.
Apart from the misuse of information, it has an impact on the cost of information
processing.
In order to curb the misuse of information, a control is exercised on the content of
information and its distribution.
Bias in information while choosing the appropriate method of communicating
information, a care has to be taken to see that is not biased. For example, while using
the techniques of classification or filtering the information, it should not happen that
certain information gets eliminated or does not get classified. That is, a deliberate bias
in covering certain information is to be avoided. This bias enters because people try to
block sensitive information which affects them.
To overcome this problem, a formal structure of organization should be adopted and
the type of information and its receiver should be decided by the top management.
Many a times the data and the information are suppressed but the inferences are
informed, with no or little possibility of verification or rethinking. In this case one who
draws inferences may have a bias in the process of collection, processing and
presentation of data and information.
Though the deliberate enforcement of the inference on the receiver avoids a possibility
of the multiple inferences, but in this case processor’s bias is forced on the receiver. For
example, organizations have departments like Corporate Planning, Market Research, R
and D, HRD and so on, which collect the data and analyze it for the company and
communicate the inferences.
In all these cases personal bias, organizational bias and management bias may be
reflected in the entire process of collection, processing, and communication inference.
The presentation of the information will generate a bias and may influence the user. For
example, if the information is presented in an alphabetical order and if it is lengthy, the
first few information entities will get more attention. If the information is presented
with criteria of exception, the choice of exception and deviation from the exception
creates a bias by design itself.
For a quick grasp, the information is presented in a graphical form. The choice of scale,
the graphic size and the colour introduced a bias in the reader’s mind. The base, which
may creep in inadvertently because of the information system design, can be tackled by
making the design flexible, so far as reporting is concerned.
Allow the manager or the decision maker to choose his classification or filtering
criteria, the scope of information, the method of analysis and the presentation of
inference. However, somewhere balance needs to be maintained between the flexibility
of the design and the cost, and its benefits to the managers. Disregarding the bias in
information, it must have certain attributes to increase its utility.
Redundancy is the repetition of the parts or messages in order to circumvent the
distortions or the transmission errors. The redundancy, therefore, sometimes is
considered as an essential feature to ensure that the information is received and
digested. In MIS the redundancy of data and information, therefore, is inevitable on a
limited scale. Its use is to be made carefully so that the reports are not crowded with
information.
Characteristics of Information:
The parameters of a good quality are difficult to determine, however, the information
can be termed as of a good quality if it meets the norms of
 impartiality,
 validity,
 reliability,
 consistency and
 age.
The quality of information has another dimension of utility from the user’s point of
view. The users being many, this is difficult to control. Therefore, if one can develop
information with due regards to these parameters, one can easily control the outgoing
quality of the information with the probable exception of the satisfaction at the users
end.
Qualities of good information:
(i) Timeliness: Timeliness means that information must reach the recipients
within the prescribed timeframes. For effective decision-making, information
must reach the decision-maker at the right time, i.e. recipients must get
information when they need it. Delays destroys the value of information. The
characteristic of timeliness, to be effective, should also include up-to-date, i.e.
current information.
(ii) Accuracy: Information should be accurate. It means that information should
be free from mistakes, errors &, clear Accuracy also means that the
information is free from bias. Wrong information given to management
would result in wrong decisions. As managers decisions are based on the
information supplied in MIS reports, all managers need accurate information.
(iii) Relevance: Information is said to be relevant if it answers especially for the
recipient what, why, where, when, who and why? In other words, the MIS
 should serve reports to managers which is useful and the information helps
them to make decisions..
(iv) Adequacy: Adequacy means information must be sufficient in quantity, i.e.
MIS must provide reports containing information which is required in the
deciding processes of decision-making. The report should not give
inadequate or for that matter, more than adequate information, which may
create a difficult situation for the decision-maker. Whereas inadequacy of
information leads to crises, information overload results in chaos.
(v) Completeness: The information which is given to a manager must be
complete and should meet all his needs. Incomplete information may result
in wrong decisions and thus may prove costly to the organization.
(vi) Explicitness: A report is said to be of good quality if it does not require
further analysis by the recipients for decision making.
(vii) Impartiality: Impartial information contains no bias and has been collected
without any distorted view of the situation. The partiality creeps in, if the
data is collected with a preconceived view, a prejudice, and a pre-determined
objective or a certain motive.
(viii) Validity: The validity of the information relates to the purpose of the
information. In other words, 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. Since
the information and the purpose need not have one to one correspondence,
the tendency to use it in a particular situation may make the information
invalid. For example, if the quality of the manufactured product is
deteriorating and it is decided to select the causes of poor quality, then one
must collect all the possible causes which may affect the quality. Quality is a
function of the raw material, the process of manufacture, the tools applied,
the measures of the quality assessment, the attitude of the people towards
the control of quality. However, if the information collected talks only about
raw materials and the process of manufacture, then this information is not
sufficient and hence it is not valid for all the decisions which are required to
control the quality.
(ix) Reliability: It is connected to the representation and the accuracy of what is
being described. For example, if the organization collects the information on
the product acceptance in the selected market segment, the size of the
sample and the method of selection of the sample will decide the reliability. If
the sample is small, the information may not give the correct and a complete
picture and hence it is not reliable. The reliability is also affected from the
right source.
(x) Consistency: The information is termed as inconsistent if it is derived form a
data which does not have a consistent pattern of period. Somewhere, the
information must relate to a consistent base or a pattern. For example, you
have collected the information on the quantity of production for the last
twelve months to fix the production norms. If in this twelve months period,
the factory has worked with variable shift production, the production
statistics of the twelve months for comparison is inconsistent due to per shift
production. The consistency can be brought in by rationalizing the data to
per shift production per month. The regularity in providing the information
also helps in assessing the consistency in the information.
 (xi) Age: If the information is old, it is not useful today. The currency of the
information makes all the difference to the users. If the information is old
then it does not meet any importance of the information viz., the update of
knowledge, the element of surprise and the reduction of uncertainty, and the
representation.
Maintaining these parameters at a high degree always poses a number of problems.
These problems are in the management of the operations, the sources, the data
processing and the systems in the organization. A failure to maintain the
parameters to a high degree affects the value of the information to the decision
maker.
APPROACHES TO SYSTEM CLASSIFICATION
Classification By Organizational Level

it is important to remember that different kinds of systems found in organizations exist

to deal with the particular problems and tasks that are found in organizations.
Consequently, most attempts to classify Information systems into different types rely on
the way in which task and responsibilities are divided within an organization. As most
organizations are hierarchical, the way in which the different classes of information
systems are categorized tends to follow the hierarchy. This is often described as "the
pyramid model" because the way in which the systems are arranged mirrors the nature
of the tasks found at various different levels in the organization.

For example, this is a three level pyramid model based on the type of decisions taken at
different levels in the organization.

Three level pyramid model based on the type of decisions taken at different levels in the
organization
Similarly, by changing our criteria to the different types of date / information /
knowledge that are processed at different levels in the organization, we can create a five
level model.

Five level pyramid model based on the processing requirement of different levels in the
organization

What are the most common types of information system in an organization?

While there are several different versions of the pyramid model, the most common is
probably a four level model based on the people who use the systems. Basing the
classification on the people who use the information system means that many of the
other characteristics such as the nature of the task and informational requirements are
taken into account more or less automatically.
 Four level pyramid model based on the different levels of hierarchy in the organization

A comparison of different kinds of Information Systems

Using the four level pyramid models above, we can now compare how the information
systems in our model differ from each other.

1. Transaction Processing Systems

What is a Transaction Processing System?

Transaction Processing System are operational-level systems at the bottom of the

pyramid. They are usually operated directly by shop floor workers or front line staff,
which provide the key data required to support the management of operations. This
data is usually obtained through the automated or semi-automated tracking of low-
level activities and basic transactions.

Functions of a TPS

TPS are ultimately little more than simple data processing systems.

Functions of a TPS in terms of data processing requirements

Inputs Processing Outputs
Transactions Validation Lists
Events Sorting Detail reports
Listing Action reports
Merging Summary reports?
Updating
 Calculation

Some examples of TPS

o Payroll systems
o Order processing systems
o Reservation systems
o Stock control systems
o Systems for payments and funds transfers

The role of TPS

o Produce information for other systems

o Cross boundaries (internal and external)
o Used by operational personnel + supervisory levels
o Efficiency oriented

2. Management Information Systems

What is a Management Information System?

For historical reasons, many of the different types of Information Systems found in
commercial organizations are referred to as "Management Information Systems".
However, within our pyramid model, Management Information Systems are
management-level systems that are used by middle managers to help ensure the
smooth running of the organization in the short to medium term. The highly structured
information provided by these systems allows managers to evaluate an organization's
performance by comparing current with previous outputs.

Functions of a MIS

MIS are built on the data provided by the TPS

Functions of a MIS in terms of data processing requirements

Inputs Processing Outputs
Internal Transactions Sorting Summary reports
Internal Files Merging Action reports
Structured data Summarizing Detailed reports

Some examples of MIS

 Sales management systems

 Inventory control systems
 Budgeting systems
 Management Reporting Systems (MRS)
 Personnel (HRM) systems
The role of MIS

 Based on internal information flows

 Support relatively structured decisions
 Inflexible and have little analytical capacity
 Used by lower and middle managerial levels
 Deals with the past and present rather than the future
 Efficiency oriented?

3. Decision Support Systems

What is a Decision Support System?

A Decision Support System can be seen as a knowledge based system, used by senior
managers, which facilitates the creation of knowledge and allow its integration into the
organization. These systems are often used to analyze existing structured information
and allow managers to project the potential effects of their decisions into the future.
Such systems are usually interactive and are used to solve ill structured problems. They
offer access to databases, analytical tools, allow "what if" simulations, and may support
the exchange of information within the organization.

Functions of a DSS

DSS manipulate and build upon the information from a MIS and/or TPS to generate
insights and new information.

Functions of a DSS in terms of data processing requirements

Inputs Processing Outputs
Modelling
Internal Transactions Summary reports
Simulation
Internal Files Forecasts
Analysis
External Information? Graphs / Plots
Summarizing

Some examples of DSS

 Group Decision Support Systems (GDSS)

 Computer Supported Co-operative work (CSCW)
 Logistics systems
 Financial Planning systems
 Spreadsheet Models?

The role of DSS

 Support ill- structured or semi-structured decisions

 Have analytical and/or modelling capacity
 Used by more senior managerial levels
 Are concerned with predicting the future
 Are effectiveness oriented?
4. Executive Information Systems

What is an EIS?

Executive Information Systems are strategic-level information systems that are found at
the top of the Pyramid. They help executives and senior managers analyze the
environment in which the organization operates, to identify long-term trends, and to
plan appropriate courses of action. The information in such systems is often weakly
structured and comes from both internal and external sources. Executive Information
System are designed to be operated directly by executives without the need for
intermediaries and easily tailored to the preferences of the individual using them.

Functions of an EIS

EIS organizes and presents data and information from both external data sources and
internal MIS or TPS in order to support and extend the inherent capabilities of senior
executives.

Functions of a EIS in terms of data processing requirements

Inputs Processing Outputs
External Data Summarizing Summary reports
Internal Files Simulation Forecasts
Pre-defined models "Drilling Down" Graphs / Plots

Some examples of EIS

Executive Information Systems tend to be highly individualized and are often custom
made for a particular client group; however, a number of off-the-shelf EIS packages
do exist and many enterprise level systems offer a customizable EIS module.

The role of EIS

 Are concerned with ease of use

 Are concerned with predicting the future
 Are effectiveness oriented
 Are highly flexible
 Support unstructured decisions
 Use internal and external data sources
 Used only at the most senior management levels

Classification by functional areas supported

Functional Information System is based on the various business functions such as
Production, Marketing, Finance and Personnel etc. These departments or functions are
known as functional areas of business. Each functional area requires applications to
perform all information processing related to the function. The popular functional areas
of the business organization are:
• Financial Information System
• Marketing Information System
• Production/Marketing Information System
• Human Resource Information System 
Financial Information System
Financial information system is a sub-system of organizational management
information system. This sub-system supports the decision-making process of financial
functions at the level of an organization.
Marketing Information System 
This sub-system of management information system provides information about
various functions of the marketing system of an organization. Marketing is another
functional area of the business organization, which is engaged in marketing (selling) of
its products to its customers.
Important functions of the marketing process include the following.

• The marketing identification function

• The purchase motivation function.
• The product adjustment function
• The physical distribution function
• The communication function
• The transaction function
• The post-transaction function
Production /manufacturing Information System
Manufacturing or production information system provides information on
production /operation activities of an organization and thus facilitates the decision-
making process of production managers of an organization. The main decisions to be
taken in manufacturing system are:

• Product Design
Human Resources Information System   

This functional information system supports the functions of human resource

management of an organization. The human resource management function, in its
narrow sense, it also known as personnel management .The function involves:
• Manpower planning.
• Staffing
• Training and development
• Performance evaluation, and
• Separation activities
Classification By Support Provided
Management support systems assist the various levels of management in their tasks. They are
essentially categorized as management information system, decision support system,
and expert system and accounting information system.

They also provide information to manager facilitating the routine decision-making

process. Decision support system provides information to manager facilitating specific
issue related solution.
For example MRS, DSS, ESS

i. Transaction processing systems- they are for operational of DP that are needed e.g.
to register customer orders and produce invoices and payroll checks. Day to day
activities- transactions

ii. Office information system – these are systems which support and co-ordinate
knowledge work in an office environment by handling documents and messages in a
variety of forms.

iii. Management reporting systems capable of producing reports for specific time
scales, designed for managers responsible for specific functions in a firm.- MIS, MRS

iv. Decision support systems (DSS) expressly designed for the support of individual and
collective decision-making.

v. Executive Information Systems (EIS), which support the work of senior executives
and of company goals by giving them access to a variety of, summarized company
data against a background of general information on the industry and the economy at
large.

Operational Support Systems assist in the day-to-day activities of an enterprise by

keeping track of its resources and commitments. These systems, data which is
processed to generate information products is input by the end user i.e. reports, which
are utilized by internal and or external users. The primary function of office support
systems is thus transaction processing.

The operation support system is further divided into a

 Transaction-processing system- In manufacturing organization, there are several

types of transaction across department. Typical organizational departments are
Sales, Account, Finance, Plant, Engineering, Human Resource and Marketing.
Across which following transaction may occur sales order, sales return, cash
receipts, credit sales; credit slips, material accounting, inventory management,
depreciation accounting, etc.

These transactions can be categorized into batch transaction processing, single

transaction processing and real time transaction processing.

 Processing control system - In a manufacturing organization, certain decisions

are made by a computer system without any manual intervention. In this type of
system, critical information is fed to the system on a real-time basis thereby
enabling process control. This kind of systems is referred as process control
systems.
 Enterprise collaboration system- In recent times, there is more stress on team
effort or collaboration across different functional teams. A system which enables
collaborative effort by improving communication and sharing of data is referred
to as an enterprise collaboration system.
 Management Support System.
 Managers require precise information in a specific format to undertake an
organizational decision. A system which facilitates an efficient decision making
process for managers is called management support system.

Classification By activity supported.

Porter's Value chain

Think of a company such as Apple Inc. Why are they successful? Why do customers love
and buy the iPhone? It is because the iPhone adds value to their lives. This is why Apple
Inc. is a successful business. Value chain refers to activities that a company performs to
create value for its customers.

The concept of a value chain was developed by Michael Porter. Porter's value chain has
two activities namely;

 Primary activities – these are activities that are related to the creating
products/services, marketing and sales, and support. Primary activities consist
of inbound logistics, operations, outbound logistics, marketing and sales, and
service.
 Support activities – these are activities that support the primary activities.
Support activities consist of procurement (purchasing), human resource
management, technological development and infrastructure.

The following diagram depicts the value chain.

Social Technical View of Information Systems
A socio-technical system (STS) is one that considers requirements spanning
hardware, software, personal, and community aspects. It applies an understanding of
the social structures, roles and rights (the social sciences) to inform the design
of systems that involve communities of people and technology.
Contemporary approaches to information systems

Multiple perspectives on information systems show that the study of information

systems is a multidisciplinary field. No single theory or perspective dominates. Figure 1-
10 illustrates the major disciplines that contribute problems, issues, and solutions in the
study of information systems. In general, the field can be divided into technical and
behavioral approaches. Information systems are sociotechnical systems. Though they
are composed of machines, devices, and “hard” physical technology, they require
substantial social, organizational, and intellectual investments to make them work
properly.

The study of information systems deals with issues and insights contributed from technical and
behavioural disciplines

Technical Approach

The technical approach to information systems emphasizes mathematically based

models to study information systems, as well as the physical technology and formal
capabilities of these systems. The disciplines that contribute to the technical approach
are computer science, management science, and operations research.
Computer science is concerned with establishing theories of computability, methods of
computation, and methods of efficient data storage and access. Management science
emphasizes the development of models for decision-making and management practices.
Operations research focuses on mathematical techniques for optimizing selected
parameters of organizations, such as transportation, inventory control, and transaction
costs.

Behavioural Approach

An important part of the information systems field is concerned with behavioral issues
that arise in the development and long-term maintenance of information systems.
Issues such as strategic business integration, design, implementation, utilization, and
management cannot be explored usefully with the models used in the technical
approach. Other behavioural disciplines contribute important concepts and methods.

For instance, sociologists study information systems with an eye toward how groups
and organizations shape the development of systems and also how systems affect
individuals, groups, and organizations. Psychologists study information systems with an
interest in how human decision makers perceive and use formal information.
Economists study information systems with an interest in what impact systems have on
control and cost structures within the firm and within markets.

 The behavioural approach does not ignore technology. Indeed, information systems
technology is often the stimulus for a behavioural problem or issue. But the focus of this
approach is generally not on technical solutions. Instead, it concentrates on changes in
attitudes, management and organizational policy, and behaviour.

sociotechnical view of systems

In this view, optimal organizational performance is achieved by jointly optimizing both

the social and technical systems used in production (Mumford, 2000 and 1997;
Williams and Edge, 1996).

Adopting a sociotechnical systems perspective helps to avoid a purely technological

approach to information systems.

 For instance, the fact that information technology is rapidly declining in cost and
growing in power does not necessarily or easily translate into productivity
enhancement or bottom-line profits.
 The fact that a firm has recently installed an enterprise-wide financial reporting
system does not necessarily mean that it will be used, or used effectively.
 Likewise, the fact that a firm has recently introduced new business procedures
and processes does not necessarily mean employees will be more productive in
the absence of investments in new information systems to enable those
processes.

The stress is in the need to optimize the firm’s performance as a whole. Both the
technical and behavioral components need attention. This means that technology must
be changed and designed in such a way as to fit organizational and individual needs. At
times, the technology may have to be “de-optimized” to accomplish this fit.

For instance mobile phone users adapt this technology to their personal needs, and as a
result manufacturers quickly seek to adjust the technology to conform with user
expectations (Lee, 2003; Sawyer and Allen, 2003; Bautsch, 2001).

Organizations and individuals must also be changed through training, learning, and
planned organizational change to allow the technology to operate and prosper (Lamb et
al., 2004; Orlikowski and Baroudi, 1991; Orlikowski, 1994).

Figure illustrates this process of mutual adjustment in a sociotechnical system.

The figure illustrates that, in a sociotechnical perspective, the performance of a system is optimized
when both the technology and the organization mutually adjust to one another until a satisfactory fit is
obtained.