MCOO76 - Management Information Systems

1. What do you understand by Information processes data? Data are generally considered to be raw facts that have undefined usesand application; information is considered to be processed data thatinfluences choices, that is, data that have somehow been formatted, filtered, and summarized; and knowledge is considered to be an understanding derived from information distinctions among data, information, and knowledge may be derived from scientific terminology. The researcher collects data to test hypotheses; thus, data refer to unprocessed and unanalyzed numbers. When the data are analyzed, scientists talk about the information contained in the data and the knowledge acquired from their analyses. The confusion often extends to the information systems context, and the three terms maybe used interchangeably. The acquisition of information is a first step in its use. We can obtain information from either formal or informal sources. Formal sources provide information in a relatively organized and predictable fashion, for example, business forms; electronic monitoring equipment such as digital thermometers; and machine-readable purchased data such as an encyclopedia (Personal records, corporate annual reports, summarized transaction histories) on a compact disc. Informal sources provide information in a less structured way and include conversations with customers, suppliers, and other employees, as well as general observations of personal and organizational activities. Generally, acquiring information through informal sources costs less, but the information acquired may be harder to organize and use effectively. Data acquisition can occur manually or electronically. Managers often hand-write evaluation reports or salespeople maintain written records of customer orders. Increasingly, managers can enter evaluation data directly into the computer, and salespeople can use point-of-sale terminals to record detailed sales information electronically. Experts estimate that electronic forms for capturing data cost at least 70 percent less to design, purchase, use, carry, and revise than the equivalent paper forms. Processing information describes transforming it into a usable form. Processing typically occurs at two times: first, between the acquisition and storage of information, and second, between its retrieval and communication. The processing that occurs between acquisition and storage generally requires a large amount of personal labor. Manual processing, involves duplicating, sorting, and filing data. Electronic processing, such as with electronic scanners, involves transforming and entering the data into an electronic form. Although both manual and computerized processing may require significant clerical time and incur high costs, electronic processing can reduce these costs. Processing occurs between storing and communicating information for both manual and computerized systems. In manual systems, filing clerks typically perform the processes of retrieval, formatting, and display. When summaries or special analyses are required, analysts with special skills, such as skills in finance or accounting, may process the data. Manual information processing involves high labor and time costs but low equipment costs. Manual processing of large volumes of data tends to be more expensive than computer processing. In computerized systems the processing between retrieval and communication allows more analysis and display possibilities in a shorter time. The costs of computerized processing include rental or depreciation of computer equipment, the labor costs of operating the equipment, and the costs associated with programming software to retrieve, format, and display information. Computerized processing involves lower labor and time costs but higher equipment costs than manual processing.

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2. How do you retrieve information from manual system?

Retrieving desired data from manual systems can be time consuming and expensive. Executives spend approximately six weeks a year on average looking for misplaced material. Secretaries may spend as much as 30 percent of their time looking for paper documents and approximately 20 percent of that time searching for misfiled items. Manual transmission of information occurs frequently and easily in most organizations. Most organizational members rely on face-to-face communication in formal or informal setting or on written publications for much of the information they require to do their jobs. But face-to-face communication requires extensive amounts of time, a scarce resource in most organizations. Written media, such as memos, reports, advertisements, or other document can effectively transmit small amounts of information to large numbers of people. Transmitting information long distance or exchanging large volumes of data can occur more effectively by electronic communication. Telephone, television, videoconferencing, fax or other electronic data transmission can instantaneously establish communication in among individuals, groups, organizations, or data repositories or each unit of information transmitted, electronic media are much less expensive than written or oral media.

3. What are the challenges of information management?

In identifying their information management requirements, individuals face four major challenges in addition to securing the most appropriate information. First, they must deal with large quantities of information that may create overload. Second, they may face insufficient or conflicting information. Third, they must find ways to enhance their personal productivity. Fourth, they must acquire and maintain the technical skills needed for effective personal information management. Dealing with Quantities of Information The gap between the amount of information that an organization can collect and the ability of its employees to make sense of that information has been widening rather than narrowing. The early fear that computers would so improve a persons ability to process and manage information that a job holder would need only one-third to one-half the time to do his or her job has been dispelled he reverse has occurred. Often employees face an infoglut, an overload of information. As individuals move higher in the organizational hierarchy and assume more managerial responsibility, information overload become an even more significant challenge. To avoid such overload individuals must carefully asses their information needs and then find effective ways of managing the required and available information. They must also find ways to manage data better. Facing Insufficient or Conflicting Information Page | 2

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Although compute rs can make large quantities of information available to individuals, such information may not address their needs. Ramesh, ASM of Airtel, may wish to do some library research about com petitors products. In spite of the large amount of information in the librarys electronic catalog, she may not be able to secure the precise information she needs. Because computers process input from diverse sources, users may also obtain conflicting information if one source updates information more frequently than another does. Enhancing Personal Productivity Employees in any organization increasingly use information technology to improve their personal productivity. To ensure high productivity, employees must know how to use computers to facilitate, not hinder, their performance. They must know how to access the information they require and recognize when manual data collection and processing is adequate. Often employees must lobby their employers to add new technology that will help increase personal productivity. The ability to show the cost-effectiveness of additional expenditures for diagnosing and meeting information needs is critical. Employees must also understand and demonstrate when advanced technology is a detriment rather than an asset. Maintaining Technical Skills

Finally, using information technology effectively requires continuous updating of technical skills. Although many companies provide training to their employees, others do not. Ensuring that employees have the appropriate skills has both financial and time cost implications. As a result, employees may find their mobility and productivity limited by the extent to which they can learn new technical skills independently of their employer

4. Explain the different components of MIS.

In our broad interpretation of the MIS concept, these information systems include all of the following: Transaction processing systems for operational data processing that are needed, for example, to register customer orders and to produce invoices and payroll checks. Management reporting systems capable of producing reports for specific periods, designed for managers responsible for specific functions in a firm. Decision support systems (DSS) expressly designed for the support of individual and collective decision making. Executive information systems, which support the work of senior executives and of company boards by giving them ready access to a variety of summarized company data against a background of general information on the industry and the economy at large. Office information systems, which support and coordinate knowledge work in an office environment by handling documents and messages in a variety of forms-text, data, image, and voice.

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In a broader sense, knowledge work is also supported by computerized systems assisting professionals in non-managerial functions. For example, diverse professional support systems help designers, such as engineers, architects, commercial artists, or scientists who model molecular structures or study the genetic codes of living matter.

5. Mention different characteristics of MRS.

1) MRS are usually designed by MIS professionals, rather than end users, over an extensive period time, with the use of life-cycle oriented development methodologies (as opposed to first building a simpler prototype system and then refining it in response to user experience). Great care is exercised in developing such systems because MRS is large and complex in terms of the number of system interfaces with various users and databases. 2) MRS is built for situations in which information requirements are reasonably well known and are expected to remain relatively stable. Modification of such systems, like their development, is a rather elaborate process. This limits the informational flexibility of MRS but ensures a stable informational environment. 3) MRS does not directly support the decision-making process as a search for alternative solutions to problems. Naturally, information gained through MRS is used in the managers decision-making process. Well-structured decision rules, such as economic order quantities for ordering inventory or accounting formulas for computing various forms of return on equity, are built into the MRS itself. 4) MRS is oriented towards reporting on the past and the present, rather than projecting the future. 5) MRS generally has limited analytical capabilities-they are not built around elaborate models, but rather rely on summarization and extraction from the database according to given criteria. Based on simple processing of the data summaries and extracts, report information is obtained and printed (or, if of limited size, displayed as a screen) in a prespecified format. 6) MRS generally report on internal company operations rather than spanning the companys boundaries by reporting external information.

6. List down the Potential External Opportunities, potential internal Weaknesses.

Corporate level strategy addresses which lines of business a company should pursue. It views an organization as a portfolio, agglomeration, federation, or amalgam of businesses or sub units. Strategic management at the corporate level focuses on decisions about acquiring new businesses, divesting old businesses, establishing joint ventures, and creating alliances with other organizations. Determining its corporate-level strategy requires top management to obtain information about business growth rate-the speed of industry growth-and market share-the portion of the industry market captured by the business unit, among other information. Information on industry growth and market share is often public, due to the disclosures required of companies issuing stocks and bonds. Industry lobbyists, stock market researchers, trade magazine journalists, and other researchers also Page | 4

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act as sources of this information. Information systems can regularly provide organizations with such information by tapping into commercially sold databases that offer extensive economic, technological, demographic, and even legal information. This ongoing availability of information allows organizations to determine their strategic position as well as the appropriate actions for maintaining or changing this position. Information systems can provide the information for making resource allocation and other investment decisions. Information about market share, profit margins, patent ownership, technical capability, competitive strengths and weaknesses, quality of the management team, ability to compete on price and quality, customer requirements, and markets helps management determine its investment strategy. For example, business units with high ratings on both industry attractiveness and business strength make good financial investments; those low on both dimensions have no growth potential, and managers should consider divesting or liquidating them. Strategic management also involves business-level strategy, matching the strengths and weaknesses of each business unit or product line to the external environment to determine how each unit can best compete for customers. Strategic decisions include what products or services the company should offer, what customers it should service, and how it will deploy resources for advertising, research and development, customer service, equipment, and staffing.

Potential External Opportunities Serve additional customer groups Enter new markets or segments Expand product line to meet broader range of customer needs Diversify into related products Vertical integration Falling trade barriers in attractive foreign markets Complacency among rival firms Faster market growth

Potential Internal Weaknesses No clear strategic direction Obsolete facilities Lack of managerial depth and talent Missing key skills or competence Poor track record in implementing strategy

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Plagued with internal operating problems Falling behind in R&D Too narrow a product line Weak market image Weaker distribution network Below-average marketing skills Unable to finance needed changes in strategy Higher overall unit costs relative to key competitors

7. What are the technology evaluation factors that need to be considered during ERP selection.

The major technology evolution factors that needs to considered while ERP selection are, Is the technology robust enough to handle current and future transactions load? Is it scalable? - Is the systems speed acceptable for daily usage? - Is source code provided for customisations or modifications without hefty charges? - Do customisations hamper upgrading to future software releases? - Is the software Open Database Connectivity (ODBC) compliant? - Does the software support eCommerce, Radio Frequency (RF) and bar coding, and Electronic Data Interchange (EDI) transactions? - Does the software support multi-company, multi-division, and multi-currency environments? Are there any restrictions to this type of environment?

8. What are the common business exposures and risk of using internet by organization.

Contracting viruses Interception of passwords by hackers Interception of sensitive/commercial data Illegal/objectionable use of site by users

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Inability to effectively disconnected Internet to own employees Misrepresentation of identity by site visitors Legal loopholes in electronic contracts No security against eavesdropping No security against interception Misuse of supplied/captured information Misrepresentation of identity of site

9. Explain with relevant example the concept of business process. Also mention their elements.

The business process is defined as a set of activities performed across the organisation creating an output of value to the customer. Every process has a customer who may be internal or external to the organisation. The scope of the process runs across the departments and functions and ends up in substantial value addition which can be measured against the value expectation of a customer. For example, the order processing scope in the traditional sense is within the marketing department. But when it comes to re-engineering, the scope expands to manufacturing, storing, delivering and recovering the money. Likewise, the scope of the bill payment is not limited to the accounts and finance departments but it covers ordering the vendors, receipt and acceptance or goods and paying the bill amount. In a classical organisational set-up, the different processes are handled in parts within the four walls of the department and the functions are limited to the responsibility assigned to them. When the bill payment process is to be re-engineered, it will be re-engineered right from the purchase ordering to cheque payment to the vendor. The reason for covering the purchase ordering as a part of the bill payment process, is that the purchase order information decides the number of aspects of bill payment. The basic element of the processes is motivation to perform certain activities. In the process execution, the data is gathered, processed and stored. The data is used in the process to generate the information which would be checked, validated and used for decision making. The decision is then communicated. The process is executed through the basic steps such as receiving the input, measuring the input, analysing the document, performing, processing, recording, accessing data, producing the results and communicating them. Basic elements of business process are: Motivation to perform Data gathering, processing and storing

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Information processing Checking, validating and control Decision making Communication

10. Explain the link between MIS and BPR.

Any exercise towards building design of the management information system will be preceded by an exercise of business process re-engineering. Building the MIS is a long-term project. It is, therefore, essential to have a relook at the organisation where the mission and goals of the organisation are likely to be replaced. The business itself would undergo a qualitative change in terms of the business focus, work culture and style and the value system. This would change the platform of business calling for a different MIS. The MIS will concentrate more on the performance parameter evaluation which is different in the re-engineered organisation. The data capture, processing, analysis and reporting would be process central and performance efficiency would be evaluated in relation to the value generated by the processes. The decision support systems will be integrated in the business process itself, where triggers are used to move the process. The triggers could be business rules and stored procedures, enabling the process to become automotive in its execution. The MIS in the re-engineered organisation would be more of a performance monitoring tool to start with and then a control for the performance. The traditional MIS is function-centered like finance, production, material, etc. The Management Information System in a re-engineered organisation would be process centred, evaluating customer satisfaction, expectations and perceptions. The role of Management Information System will be raised to a level where the following activities would be viewed for the management action: Control of process cycle time Work group efficiency Customer satisfaction index Process efficiency and effectiveness Effectiveness of the Management in enterprise management and not in enterprise resource The strength of the organisation in terms of knowledge, learning and strategic effectiveness The traditional role of the MIS as a decision supporter will continue, however

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Part 2

Explain the needs for information in the following areas a) Cost leadership b) Global corporation c) ERP architecture d) Technology Evaluation Factor

Cost Leadership Cost leadership strategy seeks to achieve competitive advantage by allowing the business unit to make more profit than its competitors when selling to customers at the same price. Complete information about costs makes costs easier to control and creates a competitive advantage. The company requires quality internal information to reduce costs by achieving efficiencies in production, distribution, and sales. Even hospitals can use information technology to reduce costs by eliminating paperwork and improving services. Bedside terminals can store patient records; electronic conferencing can bring the expertise of a team of physicians in remote locations to a single problem; home health terminals allow patients to consult with doctors online; and diagnostic systems can support physicians diagnoses, identify preferred treatments, and specify their cost benefits.

Global Corporation A global corporation has rationalized its international operations to achieve greater efficiencies through central control. Although its strategy and marketing are based on the concept of a global market, a headquarters organization makes all major decisions. A company pursuing a global strategy needs to transfer the operational and financial data of its foreign subsidiaries to headquarters in real time or on a frequent basis. A high level of information flows from subsidiary to parent, while limited data move from parent to subsidiary.

ERP Architecture Any information system has three basic components, viz., the Data Management, the Application Logic, and the Presentation. These components can be built with the client server role definitions. The client is a user and the server provides the services required by the user them to run the system. Since, the information needs are dynamically changing, the architecture required is to separate the data and its management from its application. The user requires the choice of using the data as it suits him the most. Hence, the application logic has to be separate from the data. There is also variability in the manner how the application logic is developed and presented. The architecture could be a two tier or three tier as shown below. Page | 9

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Since, the ERP is a generic solution for the business operations, in each case of implementation, customization should suit the specifics of the business or customer. The architecture choice is influenced by this requirement. In a two-tier system architecture, there is a rigid division of roles. The data management is by the server and its processing is through the application logic by client. In this architecture all the requirements are sent to the server by all the users in the network. This affects the load on the server and the response time to the user increases. However, there could bean application which deals with high volume and complex data structure and this approach is more efficient, if response issue is taken care of by the high end multiple CPU and the parallel processing hardware platforms. There could be a case where the user is dumb and is required to use the system in a guided manner with the help assistance. Then the three tier architecture is suitable. The client uses the GUI(Graphical User Interface) tools for simplicity while the application logic is processed on another machine. In this architecture three distinct roles are defined and three hardware platforms are made responsible to perform. The servers play two distinct roles of handling the data and the applications logic. This architecture is useful when there is not much change in the application logic and it is complex. Further, this architecture is useful when the user does not want to change the application logic but may want to change the presentation logic. The third possibility is a golden mix of the two architectures. Here the application logic is split into two. The logic which deals with the data more is attached to the server platform, where the data is being managed. The logic, which deals with the presentation and the specific needs of the user, is left to the client platform as shown bellow.

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Technology Evaluation Factor 1) Client server architecture and its implementation-two tier or three tier. 2) Object orientation in development and methodology. 3) Handling of server and client based data and application logic. 4) Application and use of standards in all the phases of development and in the product. 5) Front end tools and back end data based management system tools for the data, process presentation management. 6) Interface mechanism: Data transfer, real time access, OLE/ODBC compliance. 7) Use of case tool, screen generators, report writers, screen painter and batch processor. 8)Support system technologies like bar coding, EDI, imaging, communication, network. 9) Down loading to PC based packages, MS-Office, lotus notes, etc. 10) Operating system and its level of usage in the system. 11) Hardware-software configuration management

2. How information is selected and organized? The Components of Perception Perception is an active process by which an individual attends to certain stimuli and then organizes them in a meaningful way. Individuals attend to certain features of a situation or select specific pieces of information to see or hear because of their needs, personality, or experiences. The information itself may also influence whether attention occurs: Individuals select stimuli that are more intense, repetitive, in motion, novel, very familiar, or in contrast with their background. People tend not to see information that they are exposed to repeatedly without consequence. Try to recall, for example, the pictures and shapes on the back of a five hundred rupee note. In addition, people tend to ignore information that runs counter to deep or long held beliefs. Consider why companies such as IBM or Dig ital Equipment Corporation failed to recognize the changing nature of the computer market in the late 1980s. Clearly, the subjectivity of perception limits the processing of information. Once individuals attend to information about a situation, they organize it in several ways. They may try to fit it into prototypes or categories that represent typical aspects of similar situations. They may match it to concrete examples. They may view it against a background, for example, within an environmental or situational context. Finally, they may group stimuli into Page | 11

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patterns, trying to form a complete picture, sometimes even trying to do so using incomplete information.

An understanding of how people select and organize information is critical to designers of information systems. Managers rely on information systems to collect and summarize data about their organization, so systems designers must present information in ways that have the greatest chance of being seen and remembered to ensure that users select the most important information and organize it in the most effective way. Extensive research in information systems has addressed questions such as how much information to put into a single table, what type of data to present as tables and what type as charts, and how best to use color to convey information and facilitate quality decisions. Managers and other jobholders also have a responsibility to ensure that they receive and select the information they need in order to operate effectively. Some managers may receive insufficient information for decision-making; others obtain so much information that they cannot separate the important from the unimportant. Individuals who hold jobs that require extensive coordination with other jobholders, as well as those who have a high ability and desire to communicate more frequently, experience overload more than those who do not. This overload can be particularly problematic: Decision quality declines as the amount of relevant information increases beyond a manageable limit. Humans versus Computers Humans and computers are complementary in their ability to filter and save information. Humans can effectively decide what is important; computers cannot. Computers generally can retain much more information and collect it faster than humans collect. For example, computers at stores such as Big Bazaar can maintain a complete, instantaneous, accurate inventory on the thousands of items in a store; manual tabulation by a store clerk would take weeks. In addition, computers often process information more accurately than individuals do. Marine biologists obtain the information they require by counting fish, checking maps, and diagnosing equipment flaws under water; under water personal computers could make the data collection easier. People can think easily in terms of symbols, objects, and concepts that have meaning They can draw conclusions from data. Increasingly computers are able to think in this way, but they still have only a primitive ability to draw conclusions. Although physicians can use computer programs to help organize disparate symptoms into a pattern that assists with diagnosis, few patients would want a computer acting alone to treat their life-threatening disease. Computers can perform computations much more quickly and accurately than people can: They can add a column of 50 ten-digit numbers in less than a second, whereas such addition would take even the most facile individual several minutes. They can sort a list of one million addresses by ZIP code to prepare envelopes for bulk mailing; to do so manually in a timely fashion would take hundreds of people.

3. Briefly explain components of MIS. The physical components of MIS comprise the computer and communications hardware, software, database, personnel, and procedures. Almost all organizations employ multiple computer systems, Page | 12

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ranging from powerful mainframe machines (sometimes including supercomputers) through minicomputers, to widely spread personal computers (also known as micro computers). The use of multiple computers, usually interconnected into networks by means of telecommunications, is called distributed processing. The driving forces that have changed the information processing landscape from centralized processing, relying on single powerful mainframes, to distributed processing have been the rapidly increasing power and decreasing costs of smaller computers.

Components Hardware

Software Database Personnel Procedures

Description Multiple computer systems: mainframes, minicomputers, personal computers Computer system components are: central processor(s), memory hierarchy, input and output devices Communications: local area networks, metropolitan area networks, and wide area networks Systems software and applications software Organized collections of data used by applications software Professional cadre of computer specialists; end users in certain aspects of their work Specifications for the use and operation of computerized information systems collected in user manuals, operator manuals, and similar document

4. Explain with relevant examples the ascertaining the class of information need for the business execution. Ascertaining the information needs of the management for the business execution is a complex task. The complexity can be handled if the information is classified on the basis of its application and the user, which becomes the basis for the ascertainment. The classification could be as shown in table below.

Class Organisational

Functional

Knowledge

Example of information The number of employees. products, services, locations, the type of business ,turnover and variety of the details each of one of these entities. Purchases, sales. production, stocks. receivables, payables, outstanding, budgets, statutory information. The trends in sales, production technology. The deviations from the budgets, targets, norms etc. Competitor s information, industry

User Many users at all the levels

Functional heads

Middle and-the Top Management

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and business information plan performance and target; and its analysis. Status information on a particular aspect, such as utilisation, profitability standard, requirement versus availability. Information for problem solving and modelling. Quantitative information on the business status. Non-moving inventory, overdue payments and receivables. Information on the production, sales. Purchase, despatches consumptions, etc. In the form of planned versus actual. The information for monitoring of execution schedules.

Decision support

Middle Management and Operations Management.

Operational

Operational and Management Supervisor, Section officer

5. How do you define Management Reporting Systems? Management reporting systems (MRS) are the most elaborate of the management-oriented MIS components. Indeed, some writers call MRS management information systems, the name we reserve for the entire area of informational support of operations and management. The main objective of MRS is to provide lower and middle management with printed reports and inquiry capabilities to help maintain operational and management control of the enterprise.

6. Explain with relevant examples the concept of business process. Also mention their elements. For initiating business re-engineering, one is required to make some very basic and fund a- mental changes in ones conventional thinking. The business is re-engineered through process re engineering and the business has a number of processes which together produce the business results. You concentrate on the process and not on the task when it comes to re- engineering. The business process is defined as a set of activities performed across the organisation creating an output of value to the customer. Every process has a customer who may be internal or external to the organisation. The scope of the process runs across the departments and functions and ends up insubstantial value addition which can be measured against the value expectation of a customer. For example, the order processing scope in the traditional sense is within the marketing department. But when it comes to re-engineering, the scope expands to manufacturing, storing, delivering and recovering the money. Likewise, the scope of the bill payment is not limited to the accounts and finance departments but it covers ordering the vendors, receipt and acceptance or goods and paying the bill amount.

Basic elements of business process are: Motivation to perform Data gathering, processing and storing Information processing Checking, validating and control Page | 14

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Decision making Communication

7. What are the uses of Executive Information Systems? Executive information systems (EIS) provide direct support for top managers. Characteristically, senior managers employ a great variety of informal sources of information, so that computerized information systems are able to provide only limited assistance. However, the chief executive officer, senior and executive vice presidents, and the board of directors also need to be able to track the performance of their company and of its various units, assess the business environment,and develop strategic directions for the companys future. In particular, these executives need a great diversity of external information to compare their companys performance to that of its competition, and to investigate the general trends of the economies in the many countries where the company may be doing business. Frequently, top managers equip a special "war room" with large screens onto which the EIS projects color displays The main uses are, 1) EIS provide immediate and easy access to information reflecting the key success factors of the company and of its units. 2) "User-seductive" interfaces, such as color graphics and video, allow the EIS user to grasp trends at a glance. Users time is at a high premium here. 3) EIS provide access to a variety of databases, both internal and external, through a uniform interface-the fact that the system consults multiple databases should be transparent to the users. 4) Both current status and projections should be available from EIS. It is frequently desirable to investigate different projections; in particular, planned projections may be compared with the projections derived from actual results. 5) An EIS should allow easy tailoring to the preferences of the particular user or group of users (such as the chief executives cabinet or the corporate board). 6) EIS should offer the capability to "drill down" into the data: It should be possible to see increasingly detailed data behind the summaries.

8. Explain various Organizational limits to Relational Decision Making.

The rational model of organizational decision making reflects only some aspects of the decisionmaking environment: those that lend themselves most readily to receiving support from information systems. Other aspects include incrementalism, chance-driven choice making, political/competitive behaviour, and programmed choice making. As you shall see, most of these decision-making behaviors are rooted in the divergent interests of the people involved in making a decision. Page | 15

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Therefore, various types of group decision support systems (GDSSs) can help these groups to negotiate, foresee, and manage a crisis, or to look at a broad array of alternatives before arriving at a decision. Charles Lindblom analyzed how the decision-making process, particularly in large organizations(including governments), differs from the rational model. He contended that decision making in large organizations under ordinary circumstances is a process of "muddling through"making small, incremental changes from existing actions and policies. The important criteria in this decision-making mode are avoiding the uncertainty of major changes and maintaining the consensus of all involved. Making a decision is not concluded by the "choice" of an alternative; it is rather a continuous process, during which any chosen course of action may be modified as it is implemented. The more recent, and most pessimistic, so-called garbage can theory of organizational decision making is based on the premise that not all organizations are destined to succeed-many companies(even those considered excellent at some point) will fail. These firms are unable to adapt to the changing environment, and much of their decision making consists of attaching solutions to problems in a rather random manner. In one sense, "garbage-can" decision making is present to some extent in all companies: because of the difficulty in forecasting outcomes, chance does playa role in providing a solution to many an organizational problem. Other aspects of organizational decision making are reflected by what George Huber called the political/competitive model. A decision process generally includes several participants, each of whom may seek to influence the decision in a direction favourable to themselves or to the unit they represent. For example, several studies of budget development clearly point to it being a political process. The need to reconcile the diverging interests of various stake holders (for example, senior management, labor, government, and others) often leads participants to avoid making major departures from current policies-and is thus one of the reasons for incremental decision making. Rational decision making in organizations is also limited by programmed behavior. When decision makers engage in this type of behavior, they follow standard operating procedures, which constrain their choices and prevents creative problem solving as they opt for the "safe and tried."An analysis of the results of previous choices, assisted by information systems, may help decision makers relax the constraints of programmed choice making.

9. Explain different components of DSS. The three principal DSS subsystems and their principal capabilities are shown in figure 10.1. Various commercial systems support DSS development and package these DSS capabilities in a variety of ways by distributing them among a series of optional modules.

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Data Management Subsystem The data management subsystem of a DSS relies, in general, on a variety of internal and external databases. Indeed, we have said that the power of DSS de rives from their ability to provide easy access to data. This is not to say that a simple, usually spreadsheet-based DSS for the personal use of a manager cannot rely on the managers limited personal database. It is simply that maintaining the currency and integrity of a significant database of this kind is usually a daunting task. Proliferation of personal databases also contradicts the principles of information resource management. The Model Management Subsystem The power of DSS rests on the users ability to apply quantitative, mathematical models to data.Models has different areas of application and come from a variety of sources. Software packages for developing DSS (so-called DSS generators) contain libraries of statistical models. These models include tools for the exploratory analysis of data-tools designed to obtain summarized measures such as mean and median values, variances, scatter plots, and so forth. Other statistical model shelp analyze series of data and forecast future outcomes by approximating a set of data with a mathematical equation, by extending the trend of a curve by extrapolation techniques, or by providing for seasonal adjustment.

The Dialog Management Subsystem Along with DSSs ability to apply models to large volumes of data from a variety of sources, a single advantage of DSS is the user-friendly and flexible interface between the human decision maker and such a system. This stands in contrast to management reporting systems. The notable feature is support of multiple forms of input and output. By combining various input and output capabilities of a DSS, users can engage in the individual dialog styles that best support their decision-making styles. The field of artificial intelligence has made some notable contributions to dialog management, such as the ability to specify what is wanted in a subset of natural language or to activate the system by voice. The window capability enables the user to maintain several activities at the same time, with the results displayed in screen windows (the user employs a mouse to move between the windows).A variety of help and even training-by-example capabilities may be offered. Significant attention has been devoted by researchers to the effectiveness of computer graphics, as opposed to the tabular display of data. Gary Dickson and his colleagues found that, in general, one cannot claim an advantage (however intuitively appealing it may he) for graphics throughout all decision-related activities. They did find, however, that graphs outperform tables when a large amount of information must be presented and a relatively simple impression is desired. This is very often the Page | 17

MCOO76 - Management Information Systems

case-and the main reason why executive information systems, discussed later in this chapter, rely heavily on graphics.

10. Write a note on Ethical and Social issues with E-Commerce. 1. Internet can be used in illegal ways, as there are no laws related to its use. Many servers contain illegal, immoral, defamatory information (which cannot be legally communicated using facilities like TV, radio, etc.) 2. There is minimal or no control over the Internet (unlike telephone, radio, TV, etc.). Limited banning of material in Internet is not possible i.e. all-or-none rule. 3. Free speech advocates say that screening of incoming material is the responsibility of the receiving end 4. There is no law against Spamming i.e. sending unsolicited mail 5. Massive flaming of large quantity of e-mail to one address. The question arises Is sending/receiving large quantity of mail ethical?

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