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Unit I

Part II

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A Sample Organization Chart

CEO

V ic e P r e s id e n t V ic e P r e s id e n t D ir e c t o r
F in a n c e M a n u f a c tu r in g H u m a n R e s o u rc e s

C h ie f B udget P la n t M a in t e n a n c e T r a in in g B e n e f its
A c c o u n ta n t A n a ly s t S u p e rin t e n d e n t S u p e rin t e n d e n t S p e c ia lis t A d m in is t r a t o r

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TYPES OF INFORMATION SYSTEMS
KIND OF SYSTEM GROUPS SERVED
STRATEGIC LEVEL SENIOR
MANAGERS

MANAGEMENT LEVEL MIDDLE


MANAGERS

KNOWLEDGE LEVEL KNOWLEDGE &


DATA WORKERS

OPERATIONAL
OPERATIONAL LEVEL
MANAGERS
SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN
MARKETING RESOURCES
MANAGEMENT INFORMATION
SYSTEMS
• A Management Information System is used by
managers throughout the organization to help
them in directing, planning, coordinating,
communicating, and decision-making

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MIS-Definition
• MIS (Management Information Systems) is a general
term for the computer systems in an enterprise that
provide information about its business operations. It's
also used to refer to the people who manage these
systems.
• Typically, in a large corporation, "MIS" or the "MIS
department" refers to a central or centrally-coordinated
system of computer expertise and management, often
including mainframe systems
• The study of effective systems for the development and
use of information in an organization. 6
MIS-Definition
• MIS is a formalised computer information
system which can integrate data from various
sources to provide the information necessary
for decision-making at the management level.
• An organized assembly of resources and
procedures required to collect, process, and
distribute data for use in decision-making.

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MIS-Definition
• MIS refers broadly to a computer-based 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
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History of the Role of IS
1950-1960 1960-1970 1970-1980 1980-1990 1990-2000

Data Management Decision Strategic & Electronic


Processing Reporting Support End User Commerce

Electronic
Data Management
Processing Information
- TPS Decision
Systems
Support
Systems End User
- Ad hoc Computing
Reports Exec Info Sys Electronic
Expert Systems Business &
SIS Commerce
-Internetworked
E-Business &
Commerce
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Role Of MIS
• MIS plays very vital role in the management,
administration and operation of the
organization.
• The system ensures that an appropriate data is
collected from various sources, processed and
sent further to all the needy destinations.
• fulfill the information needs of an individual
and top management
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Role Of MIS
Basic roles of MIS can be outlines as below :
• Hardware administration
• Software development, and support
• End user support
• Computing standards
• DB administration
• Corporate data access

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Role Of MIS
• At every phase of the management process, managers
constantly need information in order to make effective
decisions.
• It does not include purely functional information or technical
information.
• Management information is the information required by
managers as they make their decisions, such as the
– number of staff required to be employed by each department,
– their training requirements,
– career development plans,
– job descriptions,
– budgets,
– overall forecasts,
– benchmark surveys, and 12
– progress reports on socio economic conditions.
The Role of MIS
(i) Timely and Accurate Transaction Processing.
(ii) Streamlining Accounting and Records
Management.
(iii) Providing Managers with ad hoc and
interactive support in decision-making.
(iv) Provision of an easy and systematic way in
digging out critical information tailored
according to specific requirements, and
customized in preferred formats.
(v) Enables an organization to gain competitive
advantage over others.
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The Role of MIS
(vi) Better communication, inter-organizational
computing, and internet-working. Supports business
operations and successful management of business
enterprises.
(vii) Better use of executive resources by automating
routine functions.
(viii) Increased ability to make sound, rational and
informed decisions involving complex combinations
of factors, and doing so with more confidence and
speed.
(ix) Better use of time by making facilities available
every time they are required.
(x) Improved customer services and improved personnel14
relations within the organization
The role of MIS in a Business
Enterprise

The Role of Management


Information Systems

Support to Business Support to Managerial


Operations Decision-making

Business Control of Team and Reporting Interactive Tailored


Transaction Business Workgroup System for Decision Information fo
Processing Processes Collaboration Managers Support Executives
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Impact of MIS
• MIS creates, an impact on the organization’s
function, performance and productivity.
• With MIS support management of all
departments of an organization can become
more effective.

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Impact of MIS
Impact on Management
• Targets tracking and monitoring becomes easy.
Top level managers can be informed accordingly.
• Probable trends in various aspects of business can
be traced. This helps in log-term planning and
forecasting.
• Exception conditions can be brought to the
noticed, so that manages can take decision in that
matter.
• Information reporting system helps entire
organization.

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Impact on Understanding of Business
• MIS brings clarity in the communication, due to
common understanding of terms and terminology.
• Brings high degree of professionalism in the
business operations.
Impact on Managerial Efficiency
• Helps him to use different tools and techniques,
which are impossible to use manually.
• Decision-making ability is improved.
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WHAT IS MANAGEMENT

• Management : Mary Follett defined management as


“the art of getting things done through people.”
• Manager : Person who achieves the organization
goals by motivating others to perform, not doing
himself.
• Management (For MIS) : Defined as a process of
planning, organizing, staffing, coordinating and
controlling the efforts of the members of the
organization to achieve command stated goals of the
organization.

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APPROACHES TO
MANAGEMENT
There are various approach to management
process, few to them are explained below :
1.Scientific management theory by Fredrick
Taylor.
2.Administrative theory by Henry Fayol.
3.Human Relation Theory by Elten Mayo and
Henery Gantt.
4.Motion Study by Frank Gilbreth.

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Frederick Winslow Taylor (1856-
1915)
• F. W. Taylor is known as the "father of scientific management".
• In a company "Midvale Steel" he identified the principles
defining how the work could be done.
• According to Taylor, once these principles were defined, all the
workers could be trained to do the work "the one best way",
rather than relying on their own various rules of thumb.
• Taylor found that the workers are deliberately working at less
than full capacity called soldiering.
• Based on his extensive observations, he then experimented with
ways to improve the worker's performance, changing everything
from how they did their jobs to the tools they used.
• Based on these experiments, Taylor then trained the workers to
perform the tasks in the most efficient way. The result of
Taylor's scientific approach were impressive.
• In 1911, Taylor published his conclusions from these and other
experiments in a book titled "Principle of Scientific 21

Management".
Taylor's Four Principles of
Scientific Management
1. Scientifically study each part of worker's task and develop
the best method for performing the task, which replaces the
old rule of thumb.
2. Scientifically select the workers and train them to perform
the task by using the scientifically developed method.
3. Co-operate fully with workers to ensure that they use the
proper method.
4. Divide work and responsibility between the management and
workers so that the management is responsible for planning
work method using scientific principles and workers are
responsible for executing the work accordingly.
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Henry Fayol (1841-1925)

• Henry Fayol, a French industrialist is known


as the "father of modern management theory".
• Henry Fayol was trained as a mining engineer,
he Joined a coal-and-iron combine as an
apprentice and reached to top position of
managing director.

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Fayol's Management Activities
• On the basis of Fayol's experience as a top-level manager, Henri
Fayol realize that it is possible to develop theories about
management that could be taught to individuals with administrative
responsibilities. In 1916, he published monograph titled "General
and Industrial Management".
• Fayol has classified industrial and business operations into six
distinct activities.
• Management activities and their related functions are -
i) TechnicalTechnical activities include production and
manufacturing.
ii) CommercialCommercial activities include purchasing and selling
iii)FinancialFinancial activities include use of capital to its optimum
use and financing.
iv) SecuritySecurity includes protection of life and property.
v) AccountingAccording function includes balance sheet, costing,
statistics
vi) Administrative or Managerial Managerial or administrative
function includes planning, organizing, commanding, co-ordinating,
controlling. 24
Management Activities

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Henry Fayol's Principles of
Management
1. Division of work
2. Authority and Responsibility
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interest to general interest
7. Remuneration
8. Centralization
9. Scalar chain
10.Order
11.Equity
12.Stability of personnel tenure
13.Initiative
14.Esprit de corps

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Principles
1. Division of Work :
Division of work or work specialization results in efficient use of resources
and increases productivity. This is applicable to both managerial and
technical functions.
2. Authority and Responsibility :
Authority means right to give order or command. Responsibility is the
obligation to achieve objectives. Responsibility comes with authority.
Authority and responsibility pinpoints the accountability of work.
3. Discipline :
Discipline is absolutely necessary for the smooth running of the
organization. Discipline means following rules, regulations, policies and
procedures by all employees of organization. There must be clear and fair
agreement for observing rules and regulations also punishment for
disobedience and in discipline.

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Principles
4. Unity of Command :
An employee should receive orders from one supervisor only to avoid
possible confusion and conflict i.e. any worker should not be under control
of more than one supervisors. It avoids mistakes and delays in getting work
done.
5. Unity of Direction :
All the activities must be aimed at one common objective. The activities
should be organized such that there should be one plan and one person in
charge. This enables directions of efforts towards attainment of one goal.
6. Subordination of Individual Interest to General Interest :
The interests of one employee or group should not be given importance over
the interests and goals of organization.
7. Remuneration :
Compensation and the methods of compensation should be fair to both the
employee and the employer. Exploitation of employees of any kind must
be avoided.

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Principles
8. Centralization :
The centralization of authority and power to some extent is necessary
where it is most feasible otherwise there should be decentralization of
authority and power for smooth functioning of the organization. A balance
between both must be achieved. The objective is the optimum use of the
capabilities of personnel.
9. Scaler Chain :
A scaler (hierarchical) chain of authority extends from the highest to
lowest rank of an organization and defines the communication path.
However, horizontal communication is also encouraged as long as the
managers in the chain are kept informed.
10. Order :
Order is principle of arrangement of things and people. Everything should
occupy its proper place i.e. everything should be in order. Due to good
organization and selection the right person should be in the right place.
Order leads to the creation of sound organization with efficient
management. Good organization removes confusion.
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Principles
11. Equity :
Employees are human beings. Employee's loyalty and devotion should be
treated with kindness and justice. Organization's run best when managers
are fair with their employees.

12. Stability of Personnel Tenure :


Stability of tenure of personnel in the organization increases the efficiency
of the employees and is a symbol of sound management. Because time is
required to become effective in new jobs, high turnover of employees
should be prevented. Instability (high turnover) is a symbol of weak
management.
13. Initiative :
Managers should encourage and develop the subordinates to take initiative.
It is the result of creative thinking and imagination and helps in
formulating, planning also its execution.
14. Esprit de corps :
Esprit de corps means spirit of co-operation. Since union is strength,
harmony and team work are essential. These are prerequisites for better 30
performance and effective organization.
FUNCTIONS OF MANAGER
• A manager is “someone who works with and
through other people by coordinating, their
work activities in order to accomplish
organizational goals”

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FUNCTIONS OF MANAGER
• Planning,
• Organizing,
• Staffing,
• Directing,
• Co-ordinating and
• Controlling.

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Planning
• Planning is nothing but the process of determining the
goals and objectives and strategies for achieving
goals of the organization.
• According to Lorange, when doing planning
managers need to :
1) Write or review the organization’s mission,
2) Identify and analyze opportunities,
3) Establish goals,
4) Select a course of action to achieve these goals,
5) Determine resources needed.
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Organizing
• deciding what work needs to be done, assigning the
tasks, and arranging them into a decision-making
framework.
• Organization involves evolving the structure of the
people working in the organization and their roles.
• Organizing is the process by which the structure and
allocation of jobs is determined.
• Organizing involves determining activities required
to achieve the established company objectives,
grouping these activities in a logical basis for
handling by persons, managers and, finally assigning
persons to the job designed. 34
Staffing

• The primary purposes of staffing are to find,


hire, train, develop, reward and retain the
required amount of good people, helping them
meet their needs while they help the company
meet its goal.
• This statement addresses several important
aspects of staffing including recruiting,
training and retaining employees that will
benefit the company.

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Controlling

• Controlling is the management function, in which


managers set and communicate performance
standards for people, processes, and devices.
• The four steps of the control process are :
1) Establishing performance standards,
2) Measuring performance,
3) Comparing measured performance to established
standards,
4) Taking corrective action..
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Directing
• Directing is influencing people’s behavior
through motivation, communication, group
dynamics, leadership and disciples.
• The purpose of directing is to channel the
behaviors of all personnel to accomplish the
organization’s mission and objectives while
simultaneously helping them accomplish their
own career objectives.
• This in complex task of implementing the
process of management. 37
Co-ordinating
• This function brings a harmony and smoothness in
the various group activities and individual efforts
directed towards goals.
• It needs synchronizing individual efforts and
actions which may differ.
• This is normally carried out by the authority of top
level management.
• Co-ordinating includes communicating with others,
providing directions and motivating people.

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MIS : A SUPPORT TO THE
MANAGEMENT
Management Decisions Taken by the Managers
Steps
Planning Deciding which method to select among
various alternatives like different strategies,
resources or methods.
Organization Selection of a combination out of several
combination available with him regarding people,
goals, authorities and methods.
Staffing Manage the positions in the organization
structure and provide proper manpower.
Directing Selecting a method for directing efforts in the
organization.
Controlling Selection of exception condition and decision
guidelines.
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Co-ordinating Choice of tool for coordinating.
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MIS : A TOOL FOR
MANAGEMENT PROCESS
• Management as a process consists of continuous
decision-making, necessitated by variations in goals
and also the fact that lack of complete knowledge
creates risk and uncertainty associated with
decision-making.
• Specific decisions are greatly influenced by the
organizational goals, which have to be achieved.
• The complete process of management requires lots of
data and information for execution of the plan.
• MIS is therefore, is definitely a tool for effective
execution of management process.
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ORGANIZATION
STRUCTURE AND THEORY
• Organization can be defined as, “Systematic
grouping of task for providing a good means of co-
ordination between the work of various people at
various levels so that, this is no wasted efforts or
duplication of work and the members of the group
do not get into each other’s work”.
• Overall organizational agreements within an
enterprise are provided by organization structure.

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Basic Model of Organization

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• The organization structure is built on four
basic principles :
- Hierarchy of authority
- Specialization
- Standardization (or formulation)
- Centralization

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Hierarchy of Authority
• Hierarchical structure of positions.
• Each position has authority or right to
“command” associated with it.
• control over resources, rewards, and the task
and authority to make decisions regarding
those things.
• As a rule, authority is distributed according to
the level in the hierarchy. Higher the level of
position, greater the authority.
• Span Of Control 45
Specialization
• It is division of labor in the organization.
• Normally the organization is divided into their
functional lines like marketing, production
accounting, finance etc., which encourages
specialization within each function.
• Organization may be more or less specialized
depending upon the services they provide .
• E.g. R&D rather than production
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Formalization
• The degree of formalization is the extend to
which rules and procedures exist to handle
organizational activities.
• Some times decision rules are stated in
advance.
• This is to make a person in an organization
independent.
• People shall work on the basis of rules,
procedures guidelines and policies.
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Centralization
• Centralization refers to the level in the
organization where decision-making takes
place.
• Organization where it is highly centralized,
most of the decisions making is done at the
top of the hierarchy.
• More the authority of decision-making to
lower level, greater is the decentralization.
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Factors Influencing Organizational
Structure
Various factors influence organizational
structure, which can be classified as :
1. Environment
2. Technology
3. Size
4. People

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1. Environment

• An organization is an open system. The


environment includes all conditions,
circumstances and influences surrounding and
affecting the working of organization.
• For a business organization, social, economic,
legal, political cultural and technological
environments are important.
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2. Technology
• Type of technology the organization adopts,
affects the organizational structure.
• The nature of workflow, diversion of
activities, amount of program specifications,
number of levels, span of management all
influence organization.

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3. Size of Organization
• Size is measured in terms of number of
employees, scale operations, size of
investment etc.
• It is found that a tendency of larger
organizations is to be more decentralized,
more specialized, more standardized and
formalized as compared to small organizations

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4. People
• To arrive at the appropriate organization
structure the forces people must be analyzed.
• Managers, skills, personality, values
philosophy largely influence organization
structure.
• Degree of autonomy and freedom for
subordinates has impact organizational
behaviour.
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ORGANIZATION BEHAVIOUR

• Actual performance of an organization is sometimes


different from the goals and objectives.
• These are some factors, which are beyond the control
of the management, which affects the performance of
the organization.
• The performance in affected due to organization
behavior, which is the result of following factors :
– Organizational Culture
– Organizational Power
– Organizational Change
– Organizational Learning
– Organizational Motivation 54