Ch-01

INTRODUCTION OF MIS
• Today the need for an update information has become inevitable to arrive at an effective
decision in all walks of life.

• Whether it is industry, commerce, defense, banking, education, economics or politics,

information is needed everywhere.
•
A significant part of an executive’s working and personal time is spent
on recording, searching, absorbing and communicating information.

• Information is ‘live’ as it is required to be updated all time and is renewable. It is

substitutable and transportable and can be made to travel.

• The all round exponential growth of information makes it necessary that information is
collected, stored and retrieved various fields so that it could be usefully.

• For Example; in setting up a new industry, information regarding the choice

of technology (methods), skill (manpower)
• Money and material becomes an important requirement for its growth and smooth
functioning.

• In a competitive market before deciding about the price of an item, the producer needs
information about the pricing police of the competitors,

• Information is considered as the sixth resource the other five being men, machines,
materials, money and methods (technology).
 MIS

Management Information System

Example
Planning,
Organizing, ABC
A) Environmental information:-
Directing,
Governmental Policies
Controlling,
Economic trends Production
Technological environment
level are:-
Factors of production. Material control
TLM,
MLM,
B) Competitive information:-
LLM
Industry demand, Production control
Firm demand,
The competition. Quality control

C) Internal Information:-
1) Sale forecast Purchase
2) The financial plane
3) Supply Factors Inward
stores Inspection
4) Policies.

Management information system

• The Management Information system (MIS) is an integrated man-machine system that
provides to support the planning and control function of managers in an organization.
• MIS can also be defined as the combination of human and computer based resources that
results in the collection, storage, retrieval, communication and use of data for efficient
management of operation and for business planning.

• MIS is something more than just a computer system. Before the evolution of computer,
MIS techniques existed to supply users with information that would permit them to arrive
at an effective decision.

The computer has added new dimension such as speed, accuracy and processing
of massive data, that permit the consideration of more alternative in a decision.
 Management:-
• The specific natures of the activities are determined by such managerial functions as
planning, organizing, directing, leadership (initiating or coordinating) and controlling.

Various management functions:-

1) Planning:- It is process of deciding in advance the courses of action or strategies
to be followed.

2) Organizing:- It is needed for assigning responsibilities, job, and hierarchy. (routing)

• 3) Controlling: - control is means of checking the progress of plans and correcting any
deviations. control may be used to measure physical quantities (volume of output, number
of man hours, number of units of raw material consumed per machine, etc.) monetary
results (value of sales, capital expenditure, return on investment, earning per share),

• 4) Directing: - It is needed for implementation of plane by providing desired leadership

motivation and proper communication.

• The management can also be grouped into three

hierarchical levels- top, middle and junior (lower).
• 1) Top management:- establishes the policies, plane and objectives of the organization as
well as a budget framework under various department will operate.
•
• 2) Middle management:- the responsibility of implementing the policies and overall plans
of the top management.
•
• 3) Junior management:- the responsibility of implementing day-to-day operations and
decision of the middle management to produce goods and services to meet the revenue,
profit and other goals.
 Top management
Allocation of manger’s time:-
Information for strategic planning
decision making (goal setting)
Middle management
Information for technical planning and
decision making (target setting)

Information for operational planning,

Junior decision making & control
management

Transaction processing (clerical)

Information:-
Information can be defined as the data which is organized and presented at a time and place so
that the decision-maker may take necessary action

In other words, information is the result/product of processing data the conversion process of data
into decision.

Data process Information Decision

Specific/ meaningful Implementation

action
For example:- some supporting documents, ledgers, source material for profit and loss statements,
may be used by the decision-maker for profit planning and control, information is that of raw
material to finished product.

Information

A) Environmental information
B) Competitive information
C) Internal information

A) Environmental information:-

1) Government policies:- information about government policies or financial and tax affairs (any
kinds of). Political stability is required for future planning decision.

2) Economic trends:-It includes information about economic indicator like employment;

productivity; capital investment; prices and wage level which is affect all organization regardless
of product or service, consumer disposable income.
3) Technological environment:-the information on technological changes or advancements is
necessary for forecasting such changes in the firm, and technical changes on new product and
processes

4) Factors of production:-these information about the source, cost, location, availability,

accessibility and productivity of the major factors of production such as lab our, materials, spare
part and capital.

B) Competitive information:-
1) Industry demand:- forecast of the industry for the product manufactured or about area in
which the firm is operating.

2) Firm demand:- assessment of the firm’s capabilities, activities and potentialities to meet
demand relative to the capabilities and actions of the competing firms.

3) The competition:- this includes information about competing firms for forecasting own product
demand and making decision and plans to achieve the forecast, and depends on past performance,
present activity, future plan.

C) Internal information:-

1) Sale forecast: - all other internal plans of the firm are guided by the sales plane, it is considered
as the dominant planning premise internal to firm.

2)The financial plan:-information on financial or budget plan is important because it represents a

quantitative and time bound commitment about the allocation of total resources- worker, plant,
material, overheads, administrative expenses of the firm.
3) Supply factors:-certain supply factors such as lab our, capital, plant and equipment is important
as these factors play a vital role in developing the financial plane.

4) Policies:-long-term basic policies on product range, marketing, finance and about personnel.

System:-
• Systems are diverse (different)-economic system, computer system, decision-support
system, solar system, communication system, transport system, educational system, we live
in an era of system.

• A system is a group of elements or components joined together to fulfill certain function in

a large context.
• A system is an assemblage of procedures, processes, methods, routine techniques etc.

• A system is made up of sub-system. a sub-system which is may be composed of further

sub-system. however a system itself is part of a super system.
•
 •

Super system

ABC
The example of an industrial or factory
Other system
system
Production
Sub-system-2 Sub-system-N

Material control Production control Quality control

Stores Inward Inspection

Purchase

What IS MIS ?
1)MIS is the system which makes available the right information to the right person, at the
right place, at the right time, in the right form and at the right cost.

2) According to Davis and Olson, “MIS is an integrated user-machine system for providing
information to support operation, management and decision-making functions in an
organizations

The system utilizes computer hardware and software manual procedures/ models for analysis,
planning, control and decision-making and a database”

3) According to Krober and Watson have defined MIS as “an organized set of processes that
provide information to managers to supports the operation and decision-making within an
organization”.
4) According to Henry c. Lucas, MIS is a set of organized procedures which when executed
provide information to support decision-making.

Judgment Skill External

Processing Logic Intuition Experience Environment

Computers Design
Intelligence choice
Data
Human Beings
Data The Concept of MIS
Decision Making Decision
Information
Data Data Base
Decision Implementation
MIS

Performance
Monitoring/ Feedback

Why need of MIS

• MIS has become necessary due to the increased business and management complexities.

• These complexities demand not only quantitative but qualitative decision-making.

• All managers as we know have to take decisions under condition of risk.

• A good manager/ decision-maker is one who minimizes, if not eliminates altogether, the
elements of risk and uncertainty in decision-making.
• MIS is required to enable managers to take qualitative decision and ensure success for their
respective organizations.
•
• MIS enables decision-maker to come out with appropriate response to a business situation.
•
• MIS, thus, enables decision-maker to give either a re-active or pro-active response .
•
 • As however, the decision are also futuristic, MIS facilitates pro-active decision- making- it
enables the manager/organization to be ready for tomorrow, today.

Objectives of MIS:-
Management information system (MIS) is an integrated man-machine system which collect,
maintains, correlated and selectively display information in the proper time frame consistently, and
action taken for fulfilling the objective of an organization.

1) Providing information to support managerial functions( planning, control, organizing,

operating)

2) Collect information systematically and routinely in according with a well defined set of rules

3) Includes files, hardware, software and operations research models of processing, storing,
retrieving and transmitting information to the user.

4) Facilitate decision-maker to select the best course of action.

5) Provide information at each level of management.

6) Help in highlighting the critical factors.

7) Support decision-making.

.
Contemporary approaches to MIS
We all live in an information age today information technology has now become an integral parts
of corporate as well as personal life-style. Information systems based on computer are now
progressively used for acquiring, processing, storing and disseminating (spread) information.
Three type of contemporary (at the time) approaches are

1) The technical approach

2) The behavioral approach

3) The socio-technical approach

1) The technical approach:-

This approach is around mathematical and normative models to study information system such as
computer science, management science and operation research disciplines contribute significantly
to the technical approach.
2) The behavioral approach:-
Information technology may heavily depend upon the technical aspects/disciplines the developer
has to consider the behavioral impact/ response of people in the organizations. information system
be motivational feasibility.

3) The socio-technical approach:-

It is now realized that the problem faced while developing and implementing information system
are neither purely technical nor behavioral it becomes important to understand the perspectives of
both technical as well as behavioral disciplines this approach is now being increasingly accepted
and implemented.

Contemporary Approach

Technical Socio-technical Behavioral

Approach Approach Approach

1) Operational Research 1) Psychology

2) Computer Sciences 2) Sociology
3) management sciences 3) Political sciences

Information as a strategic resources.

• Increasing and intensifying trends towards globalization, competition is increasing and
becomes more global.

• Global competition has increased performance standard in many dimension covering the
whole gamut of cost, price, quality technology, productivity, product launch .

• Introduction time and smooth flowing operations.

 • Present competitive environment strategic competitiveness would have to be earned.

• Today’s highly globalize and information-based economy any idea.

• It is in this overall context that information has emerged as a strategic resources- resources
that is scarce, has significant cost and has alternative uses bestowing (give) competitive
edge on the organization which own it.

• Hence in the present competitive environment information/knowledge has becomes a

critical organizational resource and is increasing considered/ accepted as a valuable
strategic resources or as an invaluable asset for competitive advantage.

Use of information for competitive advantage

1) Dramatic change have occurred in information technology.

2) Information revolution which is sweeping the corporate organizations world-wide.

3) The corporate business environment has resultantly become competitive.

4) Increasingly globalize and highly information-based.

5) Highly competitive environment.

6) Competitive advantage for a number of corporate organizations.

• “Competitive advantage is about changing the balance of power between a firm and its
competitors in the industry in the firm’s favor”.

• “Competitive advantage could be usually embodied in either a product or a service that has
the most added value to customer and that is unavailable from the competition”.

• Competitive advantage could also be seen “as an internal system that delivers benefits to a
firm, not enjoyed by its competition”.

MIS as an Instrument for the organizational change

• History announced that mankind’s rise-mankind’s success-depends upon man’s ability to
produce appropriate responses to challenges of change.

• Produce an appropriate response.

• Challenges of change are too great.

 • Realize that change management is the single most important element that successful
business management to day.

• To remains competitive in the increasingly aggressive markets, organization & individuals

working.
• Life lives the present and carries the hopes of the future.
• Quicker the hopes are turned in to reality.
• More satisfaction and sense of achievement.
• Faster the move with the time and even the distant future- hope comes within life’s reach.
• Constantly changing demands due to rapidly evolving technology.
• Dynamic markets.
• Increasingly sophisticated customer and competitors.

MIS as an InstrumentTechnology
for the Organizational
Globalizations Competition
change:-
Lifestyle
Environment

Organization Communicatio
Work Pattern n

Information
Work Place Consciousness
 Leavitt model for Organizational

Change
TASK

PEOPLE TECHNOLOGY

STRUCTURE

Leavitt Model

Characteristics of MIS:
1) Management Oriented
2) Management directed
3) Integrated
4) Subsystem
5) Common Database
6) Consistency
7) Heavy Planning
8) Reliable
9) Simple to understand
10) Flexible
Advantages of MIS or function of MIS
1. Handling Voluminous data
2. Mass storage
3. Communication of information to the user on time
4. Quick search & retrieval
5. Confirmation of validity of data and transactions
6. Helps in making quantitative as well as qualitative decision-making
7. MIS takes care of complexities, risks and uncertainties of business environment

Role of MIS: - “Information is blood and MIS is Heart of any business Activity or nothing
but heart of organization”

Like a blood circulation system in human body, MIS provides a most significant mechanism
to circulate the information throughout the organization. It helps collecting the information,
processing it and providing it wherever required

Question Bank
Chep-01

1) Define MIS. Explain Contemporary Approaches of MIS?

2) What Is MIS? Explain Different Functions and characteristics of MIS?
3) What is Competitive Advantage Explain the use of information for competitive advantage?
4) What is MIS? Explain the need, purpose and objective of MIS?
5) Define MIS? Explain Functional and Strategic uses of MIS With Suitable Examples