CHAPTER 1

AN OVERVIEW OF MANAGEMENT INFORMATION

SYSTEM
 MANAGEMENT INFORMATION SYSTEM (MIS):
CONCEPT
 The concept of the MIS has evolved a period of time comprising many
different facets of the organizational functions. MIS is a necessity of all the
organizations.
 The initial concept of MIS is to process data from the organization and
presents it in the form of report at regular intervals.
 The concept of MIS gives high regard to the individual and his ability to
use the information. An MIS gives information through data analysis.
 While analyzing the data, it relies on many academic disciplines. These
include the theories, principles, and concepts from the Management
Science, Management Accounting, Operation Research, Organizational
Behavior, Engineering, Computer Science, Psychology and Human
Behavior, making the MIS more effective and useful. These academic
disciplines are used in designing the MIS, evolving the decision support
tools for modeling and decision-making.
DEFINITION OF MIS:
The MIS has more than one definition, some of which are given
below.
 A system which provides information support for decision making
in the organization.
 An integrated system of man and machine for providing the
information to support the operation, the management and the
decision making function in the organization.
 A system based on the database of the organization evolved for the
purpose of providing information to the people in the organization.
 A computer-based information system.
DEFINITION OF MIS: …

A Management Information System is
• An integrated user-machine system
• For providing information
• To support the operations, management, analysis, and decision-making
functions
• In an organization
 The system utilizes
• Computer hardware & software
• Manual procedures
• Models for analysis, planning, control, and decision making, and
• A database
WE DEFINE MANAGEMENT FOR THE PURPOSE OF
MANAGEMENT INFORMATION SYSTEM AS:
“ the process of planning, organizing, staffing, coordinating and
controlling the efforts of the members of the organization to
achieve common stated goals of the organization.”
 In the process of management, a manager uses human skills,
material resources and scientific methods to perform all the
activities leading to the achievement of goals.
 The manager uses a variety of tools, techniques and skills while
executing the management process of planning, organizing,
staffing, coordinating and controlling.
ROLE AND IMPACT OF MANAGEMENT
INFORMATION SYSTEM
 The role of the MIS in an organization can be compared to the role
of heart in the body. The information is the blood and MIS is the
heart. In the body the heart plays the role of supplying pure blood to
all the elements of the body including the brain. The heart works
faster and supplies more blood when needed. It regulates and
controls the incoming impure blood, processes it and sends it to the
destination in the quantity needed. It fulfills the need of blood
supply to human body in normal course and also in crisis.
 CONT…
 The MIS plays exactly the same role in the organization. The system ensures that
an appropriate data is collected from the various sources, processed, and sent
further to all the needy destinations.
 The system is expected to fulfill the information needs of an individual, a group
of individuals, the management functionaries, the managers and the top
management.
 Since the MIS plays a very important role in the organization, it creates an
impact on the organization’s functions, performance and productivity.
 The MIS creates another impact in the organization which relates to the understanding
of the business itself.
 Since the goals and objectives of the MIS are the products of business goals and
objectives, it helps indirectly to pull the entire organization in one direction towards
the corporate goals and objectives by providing the relevant information to the people
in the organization.
MIS AND COMPUTER, MIS AND ACADEMICS, MIS
AND END USER

MIS and Computer

Translating the real concept of the MIS into reality is

technically, an infeasible proposition unless computers are
used. The MIS relies heavily on the hardware and software
capacity of the computer and its ability to store, process,
retrieve and communicate with no serious limitations.
CONT…

MIS and Academics

MIS considers the human mind as a processor of information.

While designing the report format and forming
communication channels, MIS takes into account the behavior
of the manager as an individual and in a group. It gives due
regard to the personnel factors such as bias, thinking with a
fixed frame of reference, risk aversion, strengths and
weaknesses.
CONT…

Some areas of application MIS uses are:

 Operational Research – is used for developing the model of
management problem and they are then incorporated in the
MIS as decision support systems.
 Accounting Application – it uses accounting principles to
ensure that the data is correct and valid. It uses the principle
of double entry bookkeeping for balancing the accounts. It
uses the accounting methodology for generating a trial
balance, balance sheet and other books of accounts.
CONT…

Uses the Communication Theory – the principle of feedback is

used while designing analysis and reporting systems. While
designing the report format, attention is paid to avoid noise
and distortions in the communication process.
Database – MIS uses database for generating information.
CONT…

MIS and the User

Every person in the organization is a user of the MIS. The
people in the organization operate at all levels in the hierarchy.
A typical user is a clerk, an assistant, an officer, an executive
or a manager. Each of them has a specific task and role to play
in the management of business. The MIS caters to the needs of
all persons.
ROLE AND IMPORTANCE OF
MANAGEMENT

 Management as defined by Mary Follett is “the art of getting

things done through people”.
 A manager is defined as a person who achieves the
organization’s goals by motivating others to perform – not by
performing himself.
 Whether management is an art or a science is a very
subjective question. But it can be said without doubt that
modern management in the environment of technology is
becoming more of a science than an art.
CONT…
In the process of management, a manager uses human skills,
material resources and scientific methods to perform all the
activities leading to the achievement of goals. The management
process involves continues resolution of conflicts of one kind or
the other which affects the achievement of goals. In the
management of any activity, a manager comes across human
conflict of goals, conflict between alternative resources, conflict
of time, conflict of approach or method and the conflict of
choice.
The manager uses a variety of tools, techniques and skills while
executing the management process of planning, organizing,
staffing, coordinating and controlling.
CONT…

Functions of the Manager

 Planning – is a process of determining the goals and
objectives and evolving strategies, policies, programs and
procedures for the achievement of these goals.
 Organization – involves evolving the structure of the people
working in the organization and their roles.
 Staffing – involves manning the positions in the organization
structure. It requires defining the manpower needs per
position or center of activity.
CONT…
 Directing – is a complex task of implementing the process of
management. In the process, the manager is required to guide,
clarify and solve the problems of the people and their
activities.
 Coordinating – it is the function which brings a harmony and
smoothness in the various group activities and individual
efforts directed towards the accomplishment of goals.
 Controlling – it is a process of measurement of an output,
comparing it with the goals, the objectives and the target, and
taking corrective actions, it the output is falling short of the
stated norms. Controlling ensures an achievement of the plan.
 DATA, INFORMATION, KNOWLEDGE AND
WISDOM
 According to Russell Ackoff, the content of the human mind can be classified into
four categories:
 Data: is a raw fact (symbols).
 Information: data that are processed to be useful.
 Knowledge: application of data and information; answers "how“.
 Wisdom:
The followingappreciation of "why“ and
diagram represents theevaluated understanding.
transitions from data, to information, to
knowledge, and finally to wisdom.
CONT….
 Data: it simply exists and has no significance beyond its existence.

It can exist in any form, usable or not. Raw unorganized facts
 It does not have meaning of itself.
 A spreadsheet generally starts out by holding data.
 Information: A collection of facts organized in such a way that they have
additional value beyond the value of the facts themselves.
 Information is data that has been given meaning by way of relational
connection.
 This "meaning" can be useful, but does not have to be.
 A relational database makes information from the data stored within it.
 Defining and organizing relationships among data creates information.
CONT….
DEFINING AND ORGANIZING RELATIONSHIPS AMONG DATA CREATES
INFORMATION.
CONT….
PROCESS:
A SET OF LOGICALLY RELATED TASKS PERFORMED TO ACHIEVE A DEFINED
OUTCOME.
CONT….

Knowledge: An awareness and understanding of a set of information and

ways that information can be made useful to support a specific task or reach a
decision
 Most of the applications we use (modeling, simulation, etc.) exercise some type of

stored knowledge.
Wisdom: is an extrapolative and non-deterministic, non probabilistic process.
 It calls upon all the previous levels of consciousness, and specifically upon
special types of human programming (moral, ethical codes, etc.).
 Most people believe that computers do not have, and will never have the

ability to posses wisdom.

 The first three categories relate to the past.

 Only the fourth category, wisdom, deals with the future because it incorporates
vision and design.
 With wisdom, people can create the future rather than just grasp the present
and past.
 But achieving wisdom isn't easy.
 The most important is, it is very hard to represent wisdom with a computer
system.
 THE VALUE OF INFORMATION
The value of Information is directly linked to how it helps decision makers achieve
their organization’s goals.
SYSTEM
A system is a set of elements or components that interact to accomplish goals.
 Information system (IS):
 A set of interrelated components that collect, manipulate, and disseminate data and
information and provide feedback to meet an objective
 Businesses:
 Can use information systems to increase revenues and reduce costs
MANAGEMENT
 Management as defined by Mary Follett is “the art of getting things done through
people”.
 A manager is defined as a person who achieves the organization’s goals by motivating
others…..
WHAT IS INFORMATION SYSTEM?

 “Information systems (IS) is the study of complementary networks of hardware

and software that people and organizations use to collect, filter, process, create,
and distribute data.”
 “Information systems are combinations of hardware, software, and
telecommunications networks that people build and use to collect, create, and
distribute useful data, typically in organizational settings”.
 “Information systems are interrelated components working together to collect,
process, store, and disseminate information to support decision making,
coordination, control, analysis, and visualization in an organization”.

 The definitions focus on two different ways:

 The components that make up an information system

 The role that those components play in an organization

WHAT IS INFORMATION SYSTEM?....

An Information system can be:

 Manual:
 Example: Developing patterns and trends on graph paper for stock
analysis.
 Computerized:
 Example: Using program trading to track the market and trade
large blocks of stocks when discrepancies occur
 COMPUTER-BASED INFORMATION SYSTEM:
 It is made up of five components:

 Technology: the application of scientific knowledge for particular purpose.

 Hardware: Computer Equipment. The part of the IS that you can touch (the physical
component)
 Computers, keyboards, disk drives, iPads etc…
 Software: Computer Programs. It is a set of instruction that tells the hardware what to do. (it
is not tangible)
 The two category are Operation system and Application software.
 Data : a collection of facts.
 Like software, data is also intangible.
 Organizations collect all kinds of data and use it to make decisions.
 Database system, Data warehouse etc…
COMPUTER-BASED INFORMATION SYSTEM:…..
 People : there are different professionals that are part of IS.
 From the front-line help-desk workers, to systems analysts, to programmers,
all the way up to the chief information officer (CIO)
Process : is a series of steps undertaken to achieve a desired outcome or goal.
 IS bringing more productivity and better control to those processes.
 “business process reengineering,” “business process management,” and
“enterprise resource planning” all have to do with the continued improvement
of these business procedures and the integration of technology with them.
 Businesses hoping to gain an advantage over their competitors are highly
focused on this component of information systems.
Procedures: Strategies, policies, methods, and rules for using a CBIS.
FUNCTIONS OF A COMPUTER-BASED INFORMATION
SYSTEM:
 THE MISSION OF INFORMATION
SYSTEMS
 Early days: “paperwork factories” to pay employees, bill
customers, ship products etc.
 Objectives of information systems defined by productivity
measures
 Later = MIS era: produced reports for “management by
exception” for all levels of management
 Today = Improve the performance of people in organizations
through the use of information technology
 Improving organizational performance is accomplished by the
people and groups that comprise the organization
 One resource for this improvement is IT
THE MISSION OF INFORMATION
SYSTEMS
Why do organizations have Information System?
 To make operations efficient,
 For effective management,
 To gain a competitive advantage,
 To support an organization's long-term goals.
 SUBSYSTEMS OF IS
Two approaches of defining the subsystems of IS
are:
 According to the organizational functions which they support.
 According to managerial activities for which they are used.
 SUBSYSTEMS OF IS
Organizational function subsystems of IS:
 SUBSYSTEMS OF IS
Managerial activity subsystems of IS:
 ..
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