Awash Valley College

Department of Management
Course Name: Management information System
Target Group:- Department of Management
Year-III
Semester-I
Modality:-Degree Regular Program Students
Academic Year:-2022
Prepared By:-Inst…….Dagne G.
Date October 1,2022
 Chapter One
Introduction to Management Information System
1.1 Definition and Importance of MIS
Management: - is the art of getting things done through and with the people in
formally organized groups. The basic functions performed by a manger in an
organization are; planning, staffing, organizing and directing,
Information: - is a data that is processed and is presented in a form which assists
decision makers.
System: - a system is defined as a set of elements which are joined together to
achieve a common objective. The elements are interrelated and interdependent.
Hence, MIS’s are an integrated set of components (comprised of) hardware,
software, procedures, users and communication networks) for collecting, storing,
processing and communicating information that allows mangers to make
decisions for the successful operation of businesses.
Cont……
Information systems
An information system (IS) can be defined as any organized combination
of people, hardware, software, communications networks, data resources,
and policies and procedures that stores, retrieves, transforms, and
disseminates information in an organization
People rely on modern information systems to communicate with one
another using a variety of physical devices (hardware), information
processing instructions and procedures (software), communications
channels (networks), and stored data (data resources).
Components of Information Systems
An information system depends on the resources of people (end users and
IS specialists), hardware (machines and media), software (programs and
procedures), data (data and knowledge bases), and networks
(communications media and network support) to perform input,
processing, output, storage, and control activities that transform data
resources into information products.
Cont…..
Cont….
Information Technology: Information technology (IT): is a set of
Hardware, software, databases and networks and are used to build
information systems (e.g. marketing systems, inventory control systems,
payroll processing systems)
Why Information Systems?
Let’s start by examining why information systems and information
technology (IT) are so important. There are four reasons why IT will make
a difference to you as a manager throughout your career.
IT requires a capital management
IT is a foundation of doing business:
IT is directly related with productivity
IT brings strategic opportunity and advantage to firms:
Trends in Information Systems
The business applications of information systems have expanded
significantly over the years. The below figure summarizes these changes.
Cont….
 A transaction processing system is a computerized system that performs
and records the daily routine transactions necessary to conduct business.
Examples are sales order entry, hotel reservation systems, payroll,
employee record keeping, and shipping.
Management information systems (MIS) - Management information
systems (MIS) serve the management level of the organization, providing
managers with reports and often online access to the organization’s current
performance and historical records. Typically, MIS primarily serve the
functions of planning, controlling, and decision making at the
management level. Generally, they depend on underlying transaction
processing systems for their data.
Cont…..
Decision support systems (DSS) - Decision-support systems (DSS) also
serve the management level of the organization. DSS help managers make
decisions that are unique, rapidly changing, and not easily specified in
advance. They address problems where the procedure for arriving at a
solution may not be fully predefined in advance.
Contemporary Approaches to MIS
These are the views of scholars in different areas of study. The views
are the reflections of scholars on how they understand the functions
and applications of information systems
Multiple perspectives on information systems show that the study of
information systems is a multidisciplinary field. No single theory or
perspective dominates. The below figure 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 socio-technical 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.
 Cont….

The study of information systems deals with issues and insights contributed from technical and
behavioral disciplines.
1. Technical Approach
The technical approach to information systems emphasizes mathematically based models to these
systems. The disciplines that contribute to the technical approach are computer science, management
science, and operations research.
Cont….
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.
2.Behavioral 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
Cont…
 The study of management information systems (MIS) arose in the 1970s to focus on the use of
computer-based information systems in business firms and government agencies.
 MIS combines the work of computer science, management science, and operations research
with a practical orientation toward developing system solutions to real-world problems and
managing information technology resources.
 The Evolution and Characteristics of the Information age
 Agricultural age: the period up to the 1800s, when the majority of workers were farmers whose
lives revolved around agriculture
 Industrial age: the period from the 1800s to 1957, when work processes were simplified
through mechanization and automation
 Information age: the period that began in 1957, in which the majority of workers are involved
in the creation, distribution, and application of information
 Knowledge workers: workers involved in the creation, distribution, and application of
information.
Cont…
Cont……
The core drivers of the information age are: data, information, business
intelligence and knowledge
Data: raw facts that describe the characteristics of an event or object
Information: data converted into a meaningful and useful context
Business Intelligence: information collected from multiple sources such as
suppliers, customers, competitors, partners, and industries that analyze
patterns, trends and relationships for strategic decision making.
Knowledge: skills, experience, and expertise coupled with information and
intelligence that creates a person’s intellectual resources.