CU-BCOM-SEM-V-Management Information System-Second Draft

BACHELOR OF COMMERCE SEMESTER V MANAGEMENT INFORMATION SYSTEM

First Published in 2021 All rights reserved. No Part of this book may be reproduced or transmitted, in any form or by any means, without permission in writing from Chandigarh University. Any person who does any unauthorized act in relation to this book may be liable to criminal prosecution and civil claims for damages. This book is meant for educational and learning purpose. The authors of the book has/have taken all reasonable care to ensure that the contents of the book do not violate any existing copyright or other intellectual property rights of any person in any manner whatsoever. In the event the Authors has/ have been unable to track any source and if any copyright has been inadvertently infringed, please notify the publisher in writing for corrective action. 2 CU IDOL SELF LEARNING MATERIAL (SLM)

CONTENT Unit - 1: Introduction ............................................................................................................ 4 Unit 2: Levels Of Management .......................................................................................... 16 Unit 3: Component Of Mis .................................................................................................. 27 Unit 4: Framework Understanding Mis ............................................................................... 35 Unit 5: Pre-Requisites ......................................................................................................... 45 Unit 6: Structured Vs Un-Structured Decisions ................................................................... 56 Unit 7: Analysis & Design ................................................................................................. 63 Unit 8: Implementation ....................................................................................................... 76 Unit 9: Decision Support Systems ....................................................................................... 86 Unit 10: Components Of Decision Support Systems............................................................ 95 Unit 11: Group Decision Support Systems ........................................................................ 106 Unit 12: Introduction To Database Management ............................................................... 113 Unit 13: Querying ............................................................................................................. 147 Unit 14: Printing ............................................................................................................... 167 3 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 1: INTRODUCTION STRUCTURE 1.0 Learning Objectives 1.1 Introduction 1.2 An overview of Management Information System 1.2.1 Definition 1.2.2 Characteristics 1.3 Information requirements 1.4 Summary 1.5 Keywords 1.6 Learning Activity 1.7 Unit End Questions 1.8 References 1.0LEARNING OBJECTIVES After studying this unit, you will be able to:  Describe overview of Management Information System  List the requirements of Information Management 1.1 INTRODUCTION Management Information Systems (MIS) is the study of people, technology, organizations, and the relationships among them. MIS professionals help firms realize maximum benefit from investment in personnel, equipment, and business processes. MIS is a people-oriented field with an emphasis on service through technology. Mis Professionals Make Business Better Businesses use information systems at all levels of operation to collect, process, and store data. Management aggregates and disseminates this data in the form of information needed to carry out the daily operations of business. Everyone who works in business, from someone who pays the bills to the person who makes employment decisions, uses information systems. A car dealership could use a computer database to keep track of which products sell best. A retail store might use a computer-based information system to sell products over the Internet. 4 CU IDOL SELF LEARNING MATERIAL (SLM)

In fact, many (if not most) businesses concentrate on the alignment of MIS with business goals to achieve competitive advantage over other businesses. MIS professionals create information systems for data management (i.e., storing, searching, and analyzing data). In addition, they manage various information systems to meet the needs of managers, staff and customers. By working collaboratively with various members of their work group, as well as with their customers and clients, MIS professionals are able to play a key role in areas such as information security, integration, and exchange. As an MIS major, you will learn to design, implement, and use business information systems in innovative ways to increase the effectiveness and efficiency of your company. What Are Typical Career Options For Mis Professionals?  IT Consultant  Web Developer  Information Systems Manager  Business Intelligence Analyst  Network Administrator  Business Application Developer  Systems Analyst  Technical Support Specialist  Business Analyst  Systems Developer  Why Should I Choose To Major In MIS?  Job satisfaction  High placement rate  High salaries  Exciting field  Challenging field  Hands-on problem solving  Innovation and creativity  Global opportunities  Great chance for advancement 1.2AN OVERVIEW OF MANAGEMENT INFORMATION SYSTEM A management information system (MIS) is an information system used for decision-making, and for the coordination, control, analysis, and visualization of information in an organization 5 CU IDOL SELF LEARNING MATERIAL (SLM)

and marketing. The study of the management information systems involves people, processes and technology in an organizational context. In a corporate setting, the ultimate goal of the use of a management information system is to increase the value and profits of the business. This is done by providing managers with timely and appropriate information allowing them to make effective decisions within a shorter period of time. HISTORY While it can be contested that the history of management information systems date as far back as companies using ledgers to keep track of accounting, the modern history of MIS can be divided into five eras originally identified by Kenneth C. Laudon and Jane Laudon in their seminal textbook Management Information Systems. First Era – Mainframe and minicomputer computing Second Era – Personal computers Third Era – Client/server networks Fourth Era – Enterprise computing 6 CU IDOL SELF LEARNING MATERIAL (SLM)

Fifth Era – Cloud computing The first era (mainframe and minicomputer computing) was ruled by IBM and their mainframe computers for which they supplied both the hardware and software. These computers would often take up whole rooms and require teams to run them. As technology advanced, these computers were able to handle greater capacities and therefore reduce their cost. Smaller, more affordable minicomputers allowed larger businesses to run their own computing centers in-house / on-site / on-premises. The second era (personal computers) began in 1965 as microprocessors started to compete with mainframes and minicomputers and accelerated the process of decentralizing computing power from large data centers to smaller offices. In the late 1970s, minicomputer technology gave way to personal computers and relatively low-cost computers were becoming mass market commodities, allowing businesses to provide their employees access to computing power that ten years before would have cost tens of thousands of dollars. This proliferation of computers created a ready market for interconnecting networks and the popularization of the Internet. (The first microprocessor—a four-bit device intended for a programmable calculator—was introduced in 1971, and microprocessor-based systems were not readily available for several years. The MITS Altair 8800 was the first commonly known microprocessor-based system, followed closely by the Apple I and II. It is arguable that the microprocessor-based system did not make significant inroads into minicomputer use until 1979, when VisiCalc prompted record sales of the Apple II on which it ran. The IBM PC introduced in 1981 was more broadly palatable to business, but its limitations gated its ability to challenge minicomputer systems until perhaps the late 1980s to early 1990s.) 7 CU IDOL SELF LEARNING MATERIAL (SLM)

The third era (client/server networks) arose as technological complexity increased, costs decreased, and the end-user (now the ordinary employee) required a system to share information with other employees within an enterprise. Computers on a common network shared information on a server. This lets thousands and even millions of people access data simultaneously on networks referred to as Intranets. Original department specific software applications into integrated software platforms referred to as enterprise software. This new platform tied all aspects of the business enterprise together offering rich information access encompassing the complete management structure. The following are some of the benefits that can be attained using MIS:  Improve an organization's operational efficiency, add value to existing products, engender innovation and new product development, and help managers make better decisions.  Companies are able to identify their strengths and weaknesses due to the presence of revenue reports, employee performance records etc. Identifying these aspects can help a company improve its business processes and operations.  Giving an overall picture of the company.  Acting as a communication and planning tool.  The availability of customer data and feedback can help the company to align its business processes according to the needs of its customers. The effective management of customer data can help the company to perform direct marketing and promotion activities.  MIS can help a company gain a competitive advantage.  MIS reports can help with decision-making as well as reduce downtime for actionable items.  Some of the disadvantages of MIS systems:  Retrieval and dissemination are dependent on technology hardware and software.  Potential for inaccurate information. 1.2.1 Definition Management information systems and services majors study how to create and maintain technology aimed at improving how businesses perform. ... Management information systems and services majors examine how technology can be used to access, store and share information to help our lives run more smoothly. 1.2.2 Characteristics Following are the key characteristics of MIS: 8 CU IDOL SELF LEARNING MATERIAL (SLM)

System approach: MIS follows the system approach, which implies a step by step approach to the study of system and its performance in the light of the objective for which it has been constituted. It means taking an inclusive view at sub-systems to operate within an organization. Management-oriented: The management-oriented characteristic of MIS implies that top-down approach needs to be followed for designing MIS. A top-down method says the initiation of system development determines management requirements as well as business goals. MIS implies the management dynamically to the system development towards the completion of management decision. As per requirements: The design and development of MIS should be as per the information required by the managers. The required design and development information is at different levels, viz., strategic planning, management control and operational control. It means MIS should cater to the specific needs of managers in the hierarchy of an organization. Future-oriented: The design and development of MIS should also be future purpose so that the system is not restricted to provide only the past information. Integrated: A complete MIS is a combination of its multiple sub-components to provide the relevant information to take out a useful decision. An integrated system, which blends information from several operational areas, is a necessary characteristic of MIS. Common data flows: This concept supports numerous basic views of system analysis such as avoiding duplication, combining similar functions and simplifying operations. The expansion of common data flow is a cost-effectively and logical concept. 9 CU IDOL SELF LEARNING MATERIAL (SLM)

Long-term planning: MIS should always develop as a long term planning because it involves logical planning to get success of an organization. While developing MIS, the analyst should keep future oriented analysis and needs of the company in mind. Relevant connection of sub-system planning: The MIS development should be decomposing into its related sub-systems. These sub- systems must be meaningful with proper planning. Central database: it contains data in tabular form. The data base is responsible to operations like insertion, deletion, updation of records. This database covers information related to inventory, personnel, vendors, customers, etc. the data stored in the database. 1.3 INFORMATION REQUIREMENTS #1: One-on-one interviews The most common technique for gathering requirements is to sit down with the clients and ask them what they need. The discussion should be planned out ahead of time based on the type of requirements you're looking for. There are many good ways to plan the interview, but 10 CU IDOL SELF LEARNING MATERIAL (SLM)

generally you want to ask open-ended questions to get the interviewee to start talking and then ask probing questions to uncover requirements. #2: Group interviews Group interviews are similar to the one-on-one interview, except that more than one person is being interviewed -- usually two to four. These interviews work well when everyone is at the same level or has the same role. Group interviews require more preparation and more formality to get the information you want from all the participants. You can uncover a richer set of requirements in a shorter period of time if you can keep the group focused. #3: Facilitated sessions Conducting and attending Sessions to get regular update #4: Joint application development (JAD) JAD sessions are similar to general facilitated sessions. However, the group typically stays in the session until the session objectives are completed. For a requirements JAD session, the participants stay in session until a complete set of requirements is documented and agreed to. #5: Questionnaires Questionnaires are much more informal, and they are good tools to gather requirements from stakeholders in remote locations or those who will have only minor input into the overall requirements. Questionnaires can also be used when you have to gather input from dozens, hundreds, or thousands of people. #6: Prototyping Prototyping is a relatively modern technique for gathering requirements. In this approach, you gather preliminary requirements that you use to build an initial version of the solution -- a prototype. You show this to the client, who then gives you additional requirements. You change the application and cycle around with the client again. This repetitive process continues until the product meets the critical mass of business needs or for an agreed number of iterations. #7: Use cases 11 CU IDOL SELF LEARNING MATERIAL (SLM)

Use cases are basically stories that describe how discrete processes work. The stories include people (actors) and describe how the solution works from a user perspective. Use cases may be easier for the users to articulate, although the use cases may need to be distilled later into the more specific detailed requirements. #8: Following people around This technique is especially helpful when gathering information on current processes. You may find, for instance, that some people have their work routine down to such a habit that they have a hard time explaining what they do or why. You may need to watch them perform their job before you can understand the entire picture. In some cases, you might also want to participate in the actual work process to get a hands-on feel for how the business function works today. #9: Request for proposals (RFPs) If you are a vendor, you may receive requirements through an RFP. This list of requirements is there for you to compare against your own capabilities to determine how close a match you are to the client's needs. #10: Brainstorming On some projects, the requirements are not \"uncovered\" as much as they are \"discovered.\" In other words, the solution is brand new and needs to be created as a set of ideas that people can agree to. In this type of project, simple brainstorming may be the starting point. The appropriate subject matter experts get into a room and start creatively brainstorming what the solution might look like. After all the ideas are generated, the participants prioritize the ones they think are the best for this solution. The resulting consensus of best ideas is used for the initial requirements. 12 CU IDOL SELF LEARNING MATERIAL (SLM)

1.4SUMMARY  MIS follows the system approach, which implies a step-by-step approach to the study of system and its performance in the light of the objective for which it has been constituted. It means taking an inclusive view at sub-systems to operate within an organization  The design and development of MIS should be as per the information required by the managers. The required design and development information is at different levels, viz., strategic planning, management control and operational control. It means MIS should cater to the specific needs of managers in the hierarchy of an organization.  Management information systems and services majors study how to create and maintain technology aimed at improving how businesses perform  The fourth era (enterprise computing) enabled by high speed networks, consolidated the original department specific software applications into integrated software platforms referred to as enterprise software  The second era (personal computers) began in 1965 as microprocessors started to compete with mainframes and minicomputers and accelerated the process of decentralizing computing power from large data centers to smaller offices 1.5 KEYWORD  Prototyping is a relatively modern technique for gathering requirements. In this approach, you gather preliminary requirements that you use to build an initial version of the solution -- a prototype  Group interviews are similar to the one-on-one interview, except that more than one person is being interviewed -- usually two to four.  The most common technique for gathering requirements is to sit down with the clients and ask them what they need 1.6LEARNING ACTIVITY 1 Define MIS ___________________________________________________________________________ ___________________________________________________________________________ 2. State the Information Requirement 13 CU IDOL SELF LEARNING MATERIAL (SLM)

___________________________________________________________________________ ___________________________________________________________________________ 1.7UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define MIS. 2. Identify and discuss meaning of MIS? 3. Elaborate about the requirements of MIS. 4. What are the characteristics of MIS? 5. Identify the advantages of MIS Long Questions 1. How MIS can help in brainstorming in information world? 2. Describe the features of MIS. 3. Explain First Generation MIS. 4. Explain Second Generation MIS. 5. Explain Third Generation MIS. B. Multiple Choice Questions 1. ______are basically stories that describe how discrete processes work. a. Use cases b. Tri cases c. Waste cases d. None of these 2. ______can also be used when you have to gather input from dozens, hundreds, or thousands of people a. Questionnaires b. MIS c. User d. None of these 3. ____require more preparation and more formality to get the information you want from all the participants a. Group interviews b. MIS c. User d. Waste 14 CU IDOL SELF LEARNING MATERIAL (SLM)

4. The most common technique for gathering requirements is to sit down with the ____and ask them what they need. a. Clients b. Users c. Gathering d. Base-case 5. MIS should always develop as a ____because it involves logical planning to get success of an organization a. long term planning b. Users c. Gathering d. Base-case Answers 1-a, 2-a, 3-a. 4-a, 5-a 1.8REFERENCES References book  T1 D.P. Goyal: Management Information Systems. MacMillon.  T2 KhushdeepDharni:Management Information Systems  R1 Davis &Olson: Management Information Systems.  R2 Laudon&Laudon: Management Information System, Prentice Hall of India Pvt. Ltd. New Delhi. 15 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 2: LEVELS OF MANAGEMENT STRUCTURE 2.0 Learning Objectives 2.1 Introduction 2.2 Levels of Management 2.3 Simon’s Model of decision Making 2.4 Structured v/s Unstructured decisions 2.5 Summary 2.6 Keywords 2.7 Learning Activity 2.8 Unit End Questions 2.9 References 2.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Describe nature of levels of management  Identify scope of Simon’s Model of decision making  State the difference between Structured v/s unstructured decisions  List the Structured decisions 2.1 INTRODUCTION The three levels of management typically found in an organization are low-level management, middle-level management, and top-level management.  Top-level managers are responsible for controlling and overseeing the entire organization.  Middle-level managers are responsible for executing organizational plans which comply with the company’s policies. These managers act at an intermediary between top-level management and low-level management.  Low-level managers focus on controlling and directing. They serve as role models for the employees they supervise. 16 CU IDOL SELF LEARNING MATERIAL (SLM)

2.2LEVELS OF MANAGEMENT The term “Levels of Management’ refers to a line of demarcation between various managerial positions in an organization. The number of levels in management increases when the size of the business and work force increases and vice versa. The level of management determines a chain of command, the amount of authority & status enjoyed by any managerial position. The levels of management can be classified in three broad categories: a. Top level / Administrative level b. Middle level / Executory c. Low level / Supervisory / Operative / First-line managers Managers at all these levels perform different functions. The role of managers at all the three levels is discussed below: LEVELS OF MANAGEMENT 1. Top Level of Management It consists of board of directors, chief executive or managing director. The top management is the ultimate source of authority and it manages goals and policies for an enterprise. It devotes more time on planning and coordinating functions. The role of the top management can be summarized as follows - a. Top management lays down the objectives and broad policies of the enterprise. b. It issues necessary instructions for preparation of department budgets, procedures, schedules etc. c. It prepares strategic plans & policies for the enterprise. d. It appoints the executive for middle level i.e. departmental managers. e. It controls & coordinates the activities of all the departments. 17 CU IDOL SELF LEARNING MATERIAL (SLM)

f. It is also responsible for maintaining a contact with the outside world. g. It provides guidance and direction. h. The top management is also responsible towards the shareholders for the performance of the enterprise. 2. Middle Level of Management The branch managers and departmental managers constitute middle level. They are responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions. In small organization, there is only one layer of middle level of management but in big enterprises, there may be senior and junior middle level management. Their role can be emphasized as - a. They execute the plans of the organization in accordance with the policies and directives of the top management. b. They make plans for the sub-units of the organization. c. They participate in employment & training of lower level management. d. They interpret and explain policies from top level management to lower level. e. They are responsible for coordinating the activities within the division or department. f. It also sends important reports and other important data to top level management. g. They evaluate performance of junior managers. h. They are also responsible for inspiring lower level managers towards better performance. 3. Lower Level of Management Lower level is also known as supervisory / operative level of management. It consists of supervisors, foreman, section officers, superintendent etc. According to R.C. Davis, “Supervisory management refers to those executives whose work has to be largely with personal oversight and direction of operative employees”. In other words, they are concerned with direction and controlling function of management. Their activities include - a. Assigning of jobs and tasks to various workers. b. They guide and instruct workers for day to day activities. c. They are responsible for the quality as well as quantity of production. d. They are also entrusted with the responsibility of maintaining good relation in the organization. e. They communicate workers problems, suggestions, and recommendatory appeals etc. to the higher level and higher level goals and objectives to the workers. f. They help to solve the grievances of the workers. 18 CU IDOL SELF LEARNING MATERIAL (SLM)

g. They supervise & guide the sub-ordinates. h. They are responsible for providing training to the workers. i. They arrange necessary materials, machines, tools etc. for getting the things done. j. They prepare periodical reports about the performance of the workers. k. They ensure discipline in the enterprise. l. They motivate workers. m. They are the image builders of the enterprise because they are in direct contact with the workers. 2.3 SIMON’S MODEL OF DECISION MAKING Herbert Simon made key contributions to enhance our understanding of the decision-making process. In fact, he pioneered the field of decision support systems. According to (Simon 1960) and his later work with (Newell 1972), decision-making is a process with distinct stages. He suggested for the first time the decision-making model of human beings. His model of decision-making has three stages:  Intelligence which deals with the problem identification and the data collection on the problem. Design which deals with the generation of alternative solutions to the problem at hand.Choice which is selecting the ‘best’ solution from amongst the alternative solutions using some criterion. The figure given below depicts Simon’s decision-making model clearly. We’ll be covering the following topics in this tutorial: 19  Intelligence Phase  Design Phase  Choice Phase Intelligence Phase CU IDOL SELF LEARNING MATERIAL (SLM)

This is the first step towards the decision-making process. In this step the decision-maker identifies/detects the problem or opportunity. A problem in the managerial context is detecting anything that is not according to the plan, rule or standard. An example of problem is the detection of sudden very high attrition for the present month by a HR manager among workers. Opportunity seeking on the other hand is the identification of a promising circumstance that might lead to better results. An example of identification of opportunity is- a marketing manager gets to know that two of his competitors will shut down operations (demand being constant) for some reason in the next three months, this means that he will be able to sell more in the market. Thus, we see that either in the case of a problem or for the purpose of opportunity seeking the decision-making process is initiated and the first stage is the clear understanding of the stimulus that triggers this process. So if a problem/opportunity triggers this process then the first stage deals with the complete understanding of the problem/opportunity. Intelligence phase of decision-making process involves: Problem Searching: For searching the problem, the reality or actual is compared to some standards. Differences are measured & the differences are evaluated to determine whether there is any problem or not. Problem Formulation: When the problem is identified, there is always a risk of solving the wrong problem. In problem formulation, establishing relations with some problem solved earlier or an analogy proves quite useful. 20 CU IDOL SELF LEARNING MATERIAL (SLM)

Design Phase Design is the process of designing solution outlines for the problem. Alternative solutions are designed to solve the same problem. Each alternative solution is evaluated after gathering data about the solution. The evaluation is done on the basic of criteria to identify the positive and negative aspects of each solution. Quantitative tools and models are used to arrive at these solutions. At this stage the solutions are only outlines of actual solutions and are meant for analysis of their suitability alone. A lot of creativity and innovation is required to design solutions. 21 CU IDOL SELF LEARNING MATERIAL (SLM)

Choice Phase It is the stage in which the possible solutions are compared against one another to find out the most suitable solution. The ‘best’ solution may be identified using quantitative tools like decision tree analysis or qualitative tools like the six thinking hats technique, force field analysis, etc. This is not as easy as it sounds because each solution presents a scenario and the problem itself may have multiple objectives making the choice process a very difficult one. Also uncertainty about the outcomes and scenarios make the choice of a single solution difficult. 2.4 STURCTURED V/S UNSTRUCTURED DECISIONS Structured or Programmed decisions are the ones where the organization has already faced such decisions. And the employees are used to solving such problems. For instance the hiring of new IT specialists in a firm. Many analysts categorize decisions according to the degree of structure involved in the decision-making activity. Business analysts describe a structured decision as one in which all three components of a decision – the data, process, and evaluation are determined. Since structured decisions are made on a regular basis in business 22 CU IDOL SELF LEARNING MATERIAL (SLM)

environments, it makes sense to place a comparatively rigid framework around the decision and the people making it. At the other end of the continuum are unstructured decisions. While these have the same components as structured ones—data, process, and evaluation—there is little agreement on their nature. With unstructured decisions, for example, each decision maker may use different data and processes to reach a conclusion. In addition, because of the nature of the decision, there may only a limited number of people within the organization qualified to evaluate the decision. No. Structured Unstructured 1. Goals are defined in structuredOutput are uncertain in unstructured decision. decision. 2. Information is obtainable and The required information and resource are manageable. hard to assess. 3. Appear in a well define context and Appear in a unique context in unstructured procedures are known. decision. 4. Structured decision can be delegated. Unstructured decision cannot be delegated. The cost of taking such decision is not The cost of taking such decisions is quite 5. as high as that of unstructured one. high, compare to structured decisions. 6. They are essentially repetitive, routine There are no predefined procedures and involve a defined. available to solve. 23 CU IDOL SELF LEARNING MATERIAL (SLM)

7. Structured decision are simple compare Unstructured decision are not as simple as to unstructured decisions. structured decisions. 2.5 SUMMARY  MIS should always develop as a long-term planning because it involves logical planning to get success of an organization  Vertically ordering managerial functions allows managers at different tiers to focus on different ranges or scopes of organizational behavior and strategy.  One of the weaknesses of this type of managerial organization is that it can polarize power and salary, as well as create a rigid structure that reduces information flow.  Top-level managers (such as CEOs) tend to be big-picture strategic thinkers with a substantial amount of experience in the industry and/or function they manage.  The executive team focuses on determining long-term strategy, strategic alliances, large financial decisions, and management of stakeholders (and the board of directors). 2.6 KEYWORD  Hierarchy: Any group of objects ranked so that everyone but the topmost is subordinate to a specified one above it.  Manager: A person whose job is to manage something, such as a business, a restaurant, or a sports team.  Board of directors: A group of people, elected by stockholders, to establish corporate policies, and make management decisions.  Top management: company employees responsible for controlling and overseeing the entire organization  Middle management: company employees that are accountable for controlling and overseeing a department. 2.7 LEARNING ACTIVITY 1. Define Middle Management 24 CU IDOL SELF LEARNING MATERIAL (SLM)

___________________________________________________________________________ ___________________________________________________________________________ 2. State the Simon’s model of decision making ___________________________________________________________________________ ___________________________________________________________________________ 2.8 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Describe nature of levels of management 2. Identify scope of Simon’s Model of decision making 3. State the difference between Structured v/s unstructured decisions 4. List the Structured decisions 5. List the Unstructured decisions Long Questions 1. Explain Top level Management. 2. Explain Middle Level Management. 3. Explain Lower-Level Management. 4. Explain Intelligent phase 5. Explain Choice Phase. B. Multiple Choice Questions 1.____tend to be big-picture strategic thinkers with a substantial amount of experience in the industry and/or function they manage. a. Top-level managers (such as CEOs) b. Mid-level managers c. Low-level managers d. None of these 1. _____is the process of designing solution outlines for the problem 25 a. Design b. Process c. Supervisors d. Officers CU IDOL SELF LEARNING MATERIAL (SLM)

2. When the problem is identified, there is always a risk of solving the____. a. wrong problem b. Right problem c. Which problem d. No problem 3. ____made key contributions to enhance our understanding of the decision-making process a. Herbert Simon b. Herbert Simonee c. Herbert Simun d. Herbert Sim 4. ____is also known as supervisory / operative level of management. It consists of supervisors, foreman, section officers, superintendent etc. a. Lower level b. Mid-level c. High level d. Pie level Answers 1-a, 2-a, 3-a. 4-a, 5-a 2.9 REFERENCES References book  T1 D.P. Goyal: Management Information Systems. MacMillon.  T2 KhushdeepDharni:Management Information Systems  R1 Davis &Olson: Management Information Systems.  R2 Laudon&Laudon: Management Information System, Prentice Hall of India Pvt. Ltd. New Delhi. 26 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 3: COMPONENT OF MIS STRUCTURE 3.0 Learning Objectives 3.1 Introduction 3.2 Components of MIS 3.3 Summary 3.4 Keywords 3.5 Learning Activity 3.6 Unit End Questions 3.7 References 3.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Describe Components of MIS 3.1 INTRODUCTION Facebook is one of the most profitable businesses in the world, and its entire existence depends on the use of information technology and information systems. Other successful companies such as Google, Amazon, eBay, and Financial Institutions- most of their success is due to technology. 3.2 COMPONENTS OF MIS The following are the characteristics of good information.  Accurate – information must be free from errors and mistakes. This is achieved by following strict set standards for processing data into information. For example, adding $6 + 10 would give us inaccurate information. Accurate information for our example is multiplying $6 by 10.  Complete – all the information needed to make a good decision must be available. Nothing should be missing. If TAX is an application to the computation of the total amount that the customer should pay then, it should be included as well. Leaving it out can mislead the customer to think they should pay $60 only when in actual fact, they must pay tax as well. 27 CU IDOL SELF LEARNING MATERIAL (SLM)

 Cost Effective – the cost of obtaining information must not exceed the benefit of the information in monetary terms.  User-focused – the information must be presented in such a way that it should address the information requirements of the target user. For example, operational managers required very detailed information, and this should be considered when presenting information to operational managers. The same information would not be appropriate for senior managers because they would have to process it again. To them, it would be data and not information.  Relevant – the information must be relevant to the recipient. The information must be directly related to the problem that the intended recipient is facing. If the ICT department wants to buy a new server, information that talks about a 35% discount on laptops would not be relevant in such a scenario.  Authoritative – the information must come from a reliable source. Let’s say you have a bank account and you would like to transfer money to another bank account that uses a different currency from yours. Using the exchange rate from a bureau de change would not be considered authoritative compared to getting the exchange rate directly from your bank.  Timely – information should be available when it is needed. Let’s say your company wants to merge with another company. Information that evaluates the other company that you want to merge with must be provided before the merger, and you must have sufficient time to verify the information. Competitive advantage of information and MIS Competitive advantage is a position that makes a business more profitable than its competitors. For example, producing products at a lower cost than your competitors makes you more profitable. Information systems have the capacity to help an organization into such a position. They do so in the following ways Operational excellence – operational excellence seeks to improve the operations of the business. Let’s take an example of a retail store. A retail store can use information systems to automatically place an order with a supplier once the inventory level reaches the re-order limit. This ensures that the retail store never runs out of inventory and customers can always count on it to find what they need. New business models, products, and services – let’s continue with the example of a retail store. The retail store can develop a web based order system or smartphone application that 28 CU IDOL SELF LEARNING MATERIAL (SLM)

clients can use to buy items from the comfort of their homes or wherever they are. The order system can be linked to a delivery business and have support for online payments. This is a new business model compared to customers walking in to make purchases vs doing it from web based or smartphone apps. Improved supplier and customer relations – historical data is used to understand the needs of the customers and suppliers. This data is then used to create services and products that address the needs. This leads to long-term relationships with customers and business which puts an organization in a more profitable position. Improved decision making – information is critical when making decisions. Information systems if designed and operated efficiently, output information that has all the characteristic of good information described in the above section. This enables an organization to make decisions that will profit the organizations. 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 staff who ensure that the system is running properly. Business Procedures – 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. 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 29 CU IDOL SELF LEARNING MATERIAL (SLM)

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 The following illustration shows the value chain for Apple Inc. 30 CU IDOL SELF LEARNING MATERIAL (SLM)

The overall goal of the value chain is to help a business gain competitive advantage. Competitive advantage is a business’s position in a market that makes it to be more profitable than its direct competitors. Influence of IT on organizational goals Organizational goals refer to objectives and the mission of the organization, especially in the long term. Regardless of the type of business that an organization engages in, the overall goal is to create value for the customers or clients as stated in the above section. Business Information Technology alignment is concerned with using information technology to effectively achieve business goals. Two of the most common ways that an organization can provide value is by offering a quality product at a lower price than the competitor or at a high price but with more features that add value to the customers. Information technology enables businesses to process and analyze large amounts of data at a cheaper cost and within the shortest possible time. This enables organizations to provide quality products at a cheaper price. Let’s take a bank example. A bank can use ATM to allow the clients to withdraw money and other automated means to deposit money. Customers with queries can be directed to a website that has frequently asked questions. Both individuals and businesses can view the statements online if they subscribe to internet banking. 31 CU IDOL SELF LEARNING MATERIAL (SLM)

The above IT business practices lead to reduced costs of doing business and creating new products and services. Reduced cost of doing business enables a bank to reduce the bank charges, therefore, offering a quality product or service at a cheaper rate. 3.3 SUMMARY  Business entities exist to make profits. Not for profit organizations exist to deliver quality services or products cost effectively.  Organizational goals refer to objectives and the mission of the organization, especially in the long term. Regardless of the type of business that an organization engages in, the overall goal is to create value for the customers or clients as stated in the above section.  Business Information Technology alignment is concerned with using information technology to effectively achieve business goals.  Two of the most common ways that an organization can provide value is by offering a quality product at a lower price than the competitor or at a high price but with more features that add value to the customers.  The hardware provides the computing power for processing data. It also provides networking and printing capabilities 3.4 KEYWORD  Operational excellence – operational excellence seeks to improve the operations of the business. Let’s take an example of a retail store.  The retail store can develop a web-based order system or smartphone application that clients can use to buy items from the comfort of their homes or wherever they are.  Historical data is used to understand the needs of the customers and suppliers.  Competitive advantage is a position that makes a business more profitable than its competitors 3.5 LEARNING ACTIVITY 1. Define Historical data ___________________________________________________________________________ ___________________________________________________________________________ 2. State the principles of profits in MIS 32 CU IDOL SELF LEARNING MATERIAL (SLM)

___________________________________________________________________________ ___________________________________________________________________________ 3.6 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define Business technology 2. Identify and discuss business entity 3. Elaborate about the nature of IT business. 4. What are the criteria that determine whether an organization’s HRM practices are effective? 5. Identify the typical need of information technology in mis Long Questions 1. Explain firm infrastructure 2. Explain HRM 3. Explain technology development 4. What is inbound logistics? 5. Write a note on influence of IT on organization. B. Multiple Choice Questions 1. Human Resource Management (HRM) functions are broadly classified into managerial functions and operative functions. The basic managerial functions of HRM are a. Planning, organizing, directing and controlling b. Job analysis, human resource planning, job specification and directing c. Induction, human resource planning, job analysis and controlling d. Induction, planning, organizing and recruitment 2. ________ are the resources that provide utility value to all other resources. a. Men b. Material c. Money d. Machinery 3. Identify the managerial function out of the following functions of HR managers. 33 a. procurement b. development c. organizing d. performance appraisal CU IDOL SELF LEARNING MATERIAL (SLM)

4. Which of the following is an example of operative function of HR managers? a. planning b. organizing c. procurement d. controlling 5. The scope of information technology includes a. Latest IT updates b. development c. compensation d. All of these Answers 1-a, 2-a, 3-c. 4-c, 5-a 3.7 REFERENCES References book  T1 D.P. Goyal: Management Information Systems. MacMillon.  T2 KhushdeepDharni:Management Information Systems  R1 Davis &Olson: Management Information Systems.  R2 Laudon&Laudon: Management Information System, Prentice Hall of India Pvt. Ltd. New Delhi. 34 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 4: FRAMEWORK UNDERSTANDING MIS STRUCTURE 4.0 Learning Objectives 4.1 Introduction 4.2 Framework understanding MIS 4.3 Robert Anthony’s Hierarchy of Management Activity 4.4 Summary 4.5 Keywords 4.6 Learning Activity 4.7 Unit End Questions 4.8 References 4.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Describe nature and framework of MIS  Identify scope of Robert Anthony’s hierarchy of Management activity 4.1 INTRODUCTION The information process in an organization is labyrinthine and without some overall map to guide our steps in studying them we should soon be lost in a mass of unstructured detail. Such maps are provided by general frameworks that seek to sharpen important distinctions in the kinds of information that support managerial decisions 4.2 FRAMEWORK UNDERSTANDING MIS Robert Anthony from the University of Chicago; in the year 1965 proposed a framework for the MIS system which mainly consists of three components. These components are Strategic Planning, Operational Control, and Management Control. The following figure is describing its basic structure and the connectivity of its key components – 35 CU IDOL SELF LEARNING MATERIAL (SLM)

Strategic Planning Strategic planning is a method of focusing on improvements in the goals of the organization, the methods that are to be used to achieve these objectives; policies that are frame by management experts to control, organize, and use organizational resources to reduce the cost and maximize profit. Overall, strategic planning helps in designing the strategies of the company, and is used in formulating policies to control the acquisition, handling of the business activities, and gets involved in reframe strategy whenever required. From a philosophical perspective, strategic planning must be design in such a way so that an organization may achieve its aim and objectives as well as can keep itself up to date on new developments through changes to the objectives, the financial aspects of the resources needed, and the guiding principles and policies to be followed in obtaining, using the organizational resources. Operational Control Operational control is a process of managing operational activities of an organization that are carried out to achieve optimal utilization of the resources and successful implementation of the operational activities in an organization like production, production, stock management, financial process, HRM, etc. To run it smoothly, matrices allow for pre-established processes and decision rules to be used, the constant assurance of effective acquisition and use of resources in the areas in which the results can be reasonably well understood, and operations are optimally organized and managed. For an instance – the directives set by our superiors are followed as per our ability and that the tasks we perform effectively and efficiently. These decisions at lower levels of the company have very little effect on the organization. There is a fixed timeline for decisions being taken, and there are certain \"routines\" that immediately proceed to complete the process. Management Control 36 CU IDOL SELF LEARNING MATERIAL (SLM)

Management control is a process of assuring that resources are collected and used effectively and efficiently, resulting in the accomplishment of the organizational key objectives. In this process, an executive or superiors, or managers will use to assess the productivity of his/her department, identify the issues, formulate some new and innovative strategies, make some rules of control, set protocol, and evaluate the risk allocation of resources. This job is mainly taking care of the middle-level management of the company. At this level, managers must be taking advice from the strategic planning hierarchy and must be monitoring the organization's activities so that the strategic priorities can be set and accomplished efficiently and successfully. Relationship between Operations, Planning and Control The details given by an MIS helps the managers to make decisions that are not involved. An organization must conduct certain activities to prevent itself from running into serious causes. For example “in a production of any product, a common process has to perform certain production activities\" like a wholesaler has to obtain and dispatch goods, a municipal corporation has to provide water supply to its area of jurisdiction. In addition to its day-to-day activities, a company must also prepare for its potential closing operations. To predict trends, the company has to make a prompt decision about how much production of a particular product needs to make for the upcoming time. In an organization, the planning process and goals set out at the time of the planning process decides the scope of the organization’s operations. During the production process, it has to know whether a decision has to be taken to make corrections or revise on pre plans based on the tests. Interestingly, all that the wholesaler would do is correct the deviation or update the plans. It might be important to control organizational activities with effects to ensure companies' existence in the market. The following figure is illustrating the same - 37 CU IDOL SELF LEARNING MATERIAL (SLM)

MIS is one that is concerned with planning and control. When running, we can benefit from having several systems for obtaining information. For example, the carmaker would have sensors installed in the car, programming a system on the shop floor for giving the workers their information about the task that is required on a specific batch of material. Along with the rate materials being pushed along route sheets, other materials are moving at different rates at any given moment. This system by itself contains only the necessary information to support operations. It does not have any high-level decision-making meaning. It is not part of his/her medical record. If, however, the system does include information on efficiency, computer utilization, or rejection rates (anything which is relevant to business or productivity), then we can conclude that the system is a part of an MIS. The levels of management Organizations have several levels, each of which offers a different context. This could be categorized into several categories; multiple- categories of the levels (Senior, middle and lower). 38 CU IDOL SELF LEARNING MATERIAL (SLM)

This organization is ruled by the top management, and they conduct strategic planning and the two lower levels provide processing of the information for their work. The middle management level is responsible for preparing the tactical management strategies and controls and needs to get information to execute the level. The junior level of the company is involved in day-to-day operational management, and they need knowledge for their working to be effective.  Decisions are being taken at all levels of the business.  Now and then, making an extraordinary and rare decision will change everyone's future.  Change IT offers new tools for managers to carry out business decisions.  Receive the most concrete, up-to-date information and relay it as quickly as possible to those who need to be aware of it. It does not provide some information explicitly but offers some capabilities to the user to evaluate the decision-making problem and produce some significant information, which can be used as a data sample of the decision problem. 39 CU IDOL SELF LEARNING MATERIAL (SLM)

4.3 ROBERT ANTHONY’S HIERARCHY OF MANAGEMENT ACTIVITY In order to understand the importance of MIS one must understand and appreciate the role that MIS plays in an organization. An organization may be conceived in a lot of ways. One can visualize an organization as a balance sheet or a function of financial statements, i.e., as a financial entity or as an organization chart delineating the decision-making hierarchy levels and formal communication channels. While both views are correct, the latter view is more appropriate for understanding an organization’s MIS. Anthony in his seminal work elaborated (R.A. Anthony 1965) on this view of an organization as its hierarchy of decision-making. He focused on the managerial aspects of an organization and classified the management process into three distinct levels.  Strategic Planning  Managerial Control  Operational Control Strategic Planning This requires focusing on the objectives and goals of the organization, on changes in the objectives, on the resource requirements to fulfil the objectives and on the guiding principles and policies that will govern the acquisition, use and disposal of resources to attain the objectives. In short, this role is the most important role in the management hierarchy and the decisions taken by managers in this role have a far-reaching impact on the organization. Managers in this role set the direction in which the organization will travel. In terms of hierarchy, this lies at the top. Managerial Control This requires that resources are acquired and used effectively and efficiently to attain the objectives of the organization. This is a middle management role. Managers in this role take guidance from the strategic planning hierarchy and control the activities of the organization such that the goals set by the higher level are attained in an efficient and effective manner. The impact of the decisions of the managers in this role is medium term and degree. Operational Control This requires that directives as set by the immediate higher hierarchy is followed and that specific task/s are carried out effectively and efficiently. The decisions at this level have very little impact on the organization. The organization behaves in a routine nature where the parameters of the decision-making process are well laid and certain. 40 CU IDOL SELF LEARNING MATERIAL (SLM)

Anthony’s idea of an organization’s hierarchy from the perspective of managerial activities. As is clear, it is a three-level pyramid with very distinct levels. Each level has its own set of tasks and decisions to take which have a varying impact on the organization as a whole. 4.4 SUMMARY  MIS is one that is concerned with planning and control. When running, we can benefit from having several systems for obtaining information. For example, the carmaker would have sensors installed in the car, programming a system on the shop floor for giving the workers their information about the task that is required on a specific batch of material.  One can visualize an organization as a balance sheet or a function of financial statements, i.e., as a financial entity or as an organization chart delineating the decision-making hierarchy levels and formal communication channels. While both views are correct, the latter view is more appropriate for understanding an organization’s MIS.  Managerial Control requires that resources are acquired and used effectively and efficiently to attain the objectives of the organization  The junior level of the company is involved in day-to-day operational management, and they need knowledge for their working to be effective. 4.5 KEYWORD  Acceptance testing: Provides the final certification that the system is ready to be used in a production setting.  Access control: Policies and procedures to prevent improper access to systems.  Access point: Box consisting of a radio receiver/transmitter and antennae that link to a wired network, router, or hub.  Accountability: The mechanisms for assessing responsibility for decisions made and actions taken.  Accounting rate of return on investment (ROI): Calculation of the rate of return on an investment by adjusting cash inflows produced by the investment for depreciation. Approximates the accounting income earned by the investment. 41 CU IDOL SELF LEARNING MATERIAL (SLM)

 Accumulated balance digital payment systems: Systems enabling users to make micropayments and purchases on the Web, accumulating a debit balance on their credit card or telephone bills. 4.6 LEARNING ACTIVITY 1. Define operation control ___________________________________________________________________________ ___________________________________________________________________________ 2. State the principles of managerial control ___________________________________________________________________________ ___________________________________________________________________________ 4.7UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define Structured decision 2. Define semi structured decision 3. Define unstructured decision 4. Define strategic planning 5. Explain operational control Long Questions 1. Describe nature and framework of MIS 2. Identify scope of Robert Anthony’s hierarchy of Management activity. 3. Give an example of Strategic planning 4. Give an example of Operational planning 5. Give an example of managerial planning B. Multiple Choice Questions 1. The information of MIS comes from the boot _______ source. a. Internal b. External c. Superficial d. Internal and external 2. MIS is normally found in ______sector 42 CU IDOL SELF LEARNING MATERIAL (SLM)

a. Service b. Education c. Manufacturing d. Marketing 3. Management information system usually NOT serves managers interested in _______ results. a. Weekly b. Monthly c. Yearly d. Day-to-day 4. The Management Information System receives input from the ______ a. SSL b. GPS c. TPS d. LMS 5. _____ is an important factor of a management information system. a. Information b. System c. Planning d. Personnel Answers 43 1-s, 2-c, 3-d. 4-c, 5-b 4.8 REFERENCES References book  T1 D.P. Goyal: Management Information Systems. MacMillon.  T2 KhushdeepDharni:Management Information Systems CU IDOL SELF LEARNING MATERIAL (SLM)

 R1 Davis &Olson: Management Information Systems.  R2 Laudon&Laudon: Management Information System, Prentice Hall of India Pvt. Ltd. New Delhi. 44 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 5: PRE-REQUISITES STRUCTURE 5.0. Learning Objectives 5.1. Introduction 5.2. Information requirements and Levels of Management 5.3. Simon’s Model of decision Making 5.4. Summary 5.5. Keywords 5.6. Learning Activity 5.7. Unit End Questions 5.8. References 5.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Describe nature of Information requirements and Levels of Management  Understanding Simon’s Model of decision Making 5.1 INTRODUCTION The common thread of activity in all the management functions is information management. Every manager today has to manage loads of information some for the purpose of reporting and some for taking actionable decisions. A marketing manager trying to fine-tune a sales strategy would be doing it only after analyzing a lot of relevant information about the market, the customer profile, the product profile and competitor’s pricing strategy. Similarly, a human resource manager trying to recruit someone for the organization would do a lot of information analysis regarding the job profile, suitability of the candidate for the job, the job market dynamics, etc. The competitive environment that exists in today’s time makes this task of management even more challenging. Decisions have to be taken very fast and after analyzing a lot of data. It is precisely due to these reasons8 that more and more information technology (IT) intervention is being used in modern management functions. However, Information management using technology has itself transformed dramatically over the years. From being just a supporting function it has become a key resource for gaining competitive advantage. More and more corporations are investing in acquiring the latest management information system tools like enterprise (wide) resource planning (ERP), customer relationship management (CRM), knowledge management (KM), decision support system (055), business 45 CU IDOL SELF LEARNING MATERIAL (SLM)

intelligence (81) suites data warehouse (OW) facility as they are convinced of the benefits of such huge investments. We’ll be covering the following topics in this tutorial:  Information Needs for the Different Levels of Management  Information Management Information Needs for the Different Levels of Management Even though the broad objectives of management as an entity may be same, like increasing shareholder value, it is by no means a monolithic entity. As has already been discussed, there are different levels of management and each performs its specific purpose. The top-level deals with strategy, the middle level with tactical issues and the bottom level with operational issues. The top level that deals with strategy will be taking strategic decisions, middle level will take tactical decisions and entry level will take operational decisions. Now in order to take such decisions, contextual information will need to be provided. Information Needs of Different Levels of Management Levels of Problems handled/ decisions Type of information required Management made Top level Unstructured problems. Strategic information from within the Middle level organization and outside. Decisions are based on situations Operational not/rarely handled in the past. Information about likely scenarios. level Information that can be analyzed in Decision-making variable not different ways. clearly defined. Exception reports Semi structured/structured Regular summarized reports. problems. Decisions on regular issues. Information that can be drilled deeper Decisions on tactical issues. for insight. Structured problems Information to help find out exceptions Structured decision-making so that they can be reported to top management Decision-making on the basis of Operational information set rules Rule based information, guidelines, handbook level information 46 CU IDOL SELF LEARNING MATERIAL (SLM)

A manager at the top level who is deciding on the location of a new factory of the organization has strategic consideration like the labor costs of the location, proximity of the location to the market and long-term growth prospects in mind. He/she is not bothered about the shop floor level operational details like the reason for absence of a worker. He/she will have a strategic view and would need only such information that helps him to take correct decisions. Information is only a resource to him if it can help him to improve the quality of his strategic decision-making. Similarly for other tiers, information is only a resource if one can derive value from it. Information Management The business of information which is today a multibillion dollar industry first started when a firm called Bloomberg started compiling important information about US companies and their balance sheets and selling them to stock brokers. This was the first open trade in information as a resource in modern times. From then on, information (external) has been regarded as a resource that is traded10 sometimes freely and openly as in published literature and sometimes clandestinely in the form of corporate intelligence reports. Also, internal information is seen as equally valuable and every effort is made to derive more value from it and to ensure that this internal information does not find its way outside the organization. The idea of information management is based on the fundamental premise that information is a resource that is valuable for an organization. The entire subject of information management is about how to derive more and more value from this precious resource. However, unlike most other resources that have to be procured from the outside environment, most information resource is available within the organization if an effort has been made for its safekeeping. Detailed logs of transactions of an organization with its external and internal customers over a period mostly form the basic ingredient of a good quality information resource. This basic information repository is then drilled and analyzed for actionable information, this is one aspect of information management in which strategies are used to derive greater value from the internal repository of data and information. The other aspect of information management is to ensure that this internal information is not ‘leaked’ to the outside world of competitors. 5.2 INFORMATION REQUIREMENTS AND LEVELS OF MANAGEMENT Information processing beyond doubt is the dominant industry of the present century. Following factors states few common factors that reflect on the needs and objectives of the information processing −  Increasing impact of information processing for organizational decision making.  Dependency of services sector including banking, financial organization, health care, entertainment, tourism and travel, education and numerous others on information. 47 CU IDOL SELF LEARNING MATERIAL (SLM)

 Changing employment scene world over, shifting base from manual agricultural to machine-based manufacturing and other industry related jobs.  Information revolution and the overall development scenario.  Growth of IT industry and its strategic importance.  Strong growth of information services fuelled by increasing competition and reduced product life cycle.  Need for sustainable development and quality life.  Improvement in communication and transportation brought in by use of information processing.  Use of information processing in reduction of energy consumption, reduction in pollution and a better ecological balance in future.  Use of information processing in land record managements, legal delivery system, educational institutions, natural resource planning, customer relation management and so on. In a nutshell −  Information is needed to survive in the modern competitive world.  Information is needed to create strong information systems and keep these systems up to date. Implications of Information in Business Information processing has transformed our society in numerous ways. From a business perspective, there has been a huge shift towards increasingly automated business processes and communication. Access to information and capability of information processing has helped in achieving greater efficiency in accounting and other business processes. A complete business information system, accomplishes the following functionalities −  Collection and storage of data.  Transform these data into business information useful for decision making.  Provide controls to safeguard data.  Automate and streamline reporting. The following list summarizes the five main uses of information by businesses and other organizations −  Planning − at the planning stage, information is the most important ingredient in decision making. Information at planning stage includes that of business resources, 48 CU IDOL SELF LEARNING MATERIAL (SLM)

assets, liabilities, plants and machineries, properties, suppliers, customers, competitors, market and market dynamics, fiscal policy changes of the Government, emerging technologies, etc.  Recording − Business processing these days involves recording information about each transaction or event. This information collected, stored and updated regularly at the operational level.  Controlling − A business need to set up an information filter, so that only filtered data is presented to the middle and top management. This ensures efficiency at the operational level and effectiveness at the tactical and strategic level.  Measuring − A business measures its performance metrics by collecting and analyzing sales data, cost of manufacturing, and profit earned.  Decision-making − MIS is primarily concerned with managerial decision-making, theory of organizational behavior, and underlying human behavior in organizational context. Decision-making information includes the socio-economic impact of competition, globalization, democratization, and the effects of all these factors on an organizational structure. In short, this multi-dimensional information evolves from the following logical foundations −  Operations research and management science  Theory of organizational behavior  Computer science −  Data and file structure  Data theory design and implementation  Computer networking  Expert systems and artificial intelligence  Information theory Following factors arising as an outcome of information processing help speed up of business events and achieves greater efficiency −  Directly and immediate linkage to the system  Faster communication of an order  Electronic transfer of funds for faster payment  Electronically solicited pricing (helps in determining the best price) MIS Need for Information Systems 49 CU IDOL SELF LEARNING MATERIAL (SLM)

Managers make decisions. Decision-making generally takes a four-fold path −  Understanding the need for decision or the opportunity,  Preparing alternative course of actions,  Evaluating all alternative course of actions,  Deciding the right path for implementation. MIS is an information system that provides information in the form of standardized reports and displays for the managers. MIS is a broad class of information systems designed to provide information needed for effective decision making. Data and information created from an accounting information system and the reports generated thereon are used to provide accurate, timely and relevant information needed for effective decision making by managers. Management information systems provide information to support management decision making, with the following goals −  Pre-specified and preplanned reporting to managers.  Interactive and ad-hoc support for decision making.  Critical information for top management. MIS is of vital importance to any organization, because −  It emphasizes on the management decision making, not only processing of data generated by business operations.  It emphasizes on the systems framework that should be used for organizing information systems applications. 5.3 SIMON’S MODEL OF DECISION MAKING 4 Phases of the Decision-Making Process Simon’s model defines four phases of decision-making process:  Intelligence Phase  Design Phase  Choice Phase  Implementation Phase 50 CU IDOL SELF LEARNING MATERIAL (SLM)