Management Information

System
BCA – Sem 5
UNIT - 1
What is MIS and Why MIS ?
› MIS – An acronym of Management Information System
› Can’t we do without MIS?
– Today’s Manager is confronted with TWO main challenges. He /
She has to :
› Take quick decisions
› Process a large voluminous information
What is Management ?
› Management is to get the work done through and with the
help of people, by performing basic functions of
management.
› In fact, Management is a process of achieving an
organization’s goals and objectives by making the fullest
use of available resources like men, materials, machines,
money, methods etc.
› “Management is the art of getting things done through
and with the people in formally organized groups”
- Koontz, 1972
Key Aspects of Management
› Management is a process
› Managers achieve goals using resources
› Managers play many roles and engage in organizing,
making decisions, leading, and controlling
Basic Functions of Management
› Basic functions of managements are POSDC :
Planning
Organizing
Staffing
Directing
Controlling
Basic Functions of Management
› Basic functions of managements are POSDC :
Planning
The process of deciding in advance, the course of action to be
followed, when and also, how to undertake those actions. We can say
the planning as the decision making for the path for "From where → to
where we have to reach". The planning function should answer some
basic questions, such as :
– What to do?
– When to do?
– Who is it to do?
– How is it to be done?
– Where is it to be done?
– Why is it to be done?
Basic Functions of Management
› Basic functions of managements are POSDC :
 Organizing
The grouping of people and activities in order to facilitate the achievement
of the organizational objective. The managers organize tasks by dividing
activities, assigning duties and delegating authority for effective operation
and achievement of goals.

 Staffing
The process of putting right people, at right job, at the right time. The
activities like defining the requirements, selecting suitable executives are
done in this function.

Note: Staffing and Organizing are most often confused. Organizing involves foussing on
structure formation and process of allocation whereas, staffing relates to the selection of people
for that particular job and is executive oriented.
Basic Functions of Management
› Basic functions of managements are POSDC :
Directing
The process of activating the plans, structure and group efforts in
the desired direction. It is needed for implementation of plans by
providing the desired leadership, motivation and proper
communication.

Controlling
The mode of checking the progress of plans and also, correcting
any deviations that may occur along the way.
Management as a Control System
› POSDC steps prior to a control are necessary nut not
necessarily self assuring the results unless it is followed
by a strong control mechanism
› Control, is the process through which managers assure
that actual activities conform to the planned activities,
leading to the achievement of the stated common goals.
› The control process measures a progress towards those
goals, and enables the manager to detect, the deviations
from the original plan in time to take corrective actions
before it is too late.
Management as a Control System
Management as a Control System
› A reliable and effective control system has the following
features:
Early warning mechanism
This is a mechanism of predicting the possibility of achieving the
goals and standards before it is too late and allowing the manager
to take corrective actions.

Performance standard
The performance standard must be measurable and acceptable to
all the organizations. The system should have meaningful
standards relating to the work areas, responsibility, managerial
functions and so on.
Management as a Control System
› A reliable and effective control system has the following
features:
Strategic controls
In every business, there are strategic areas of control known as the
critical success factors. The system should recognize them and
have controls instituted on them.

Feedback
The control system would be effective, if it continuously monitors
the performance and sends the information to the control center
for action. It should not only highlight the progress but also the
deviations.
Management as a Control System
› A reliable and effective control system has the following
features:
Accurate and timely
The feedback should be accurate in terms of results and should be
communicated in time for corrective action.

Realistic
The system should be realistic so that the cost of control is far
less than the benefits. The standards are realistic and are believed
as achievable. Sufficient incentive and rewards are to be provided
to motivate the people.
Management as a Control System
› A reliable and effective control system has the following
features:
Information flow
The system should have the information flow aligned with the
organization structure and the decision makers should ensure that
the right people get the right information for action and decision
making.

Exception principle
The system should selectively approve some significant deviations
from the performance standards on the principle of management
by exception.
Levels of Management
Levels of Management
› Top Level - Strategic Planning
This level develops the strategy for deciding the objectives of the
organization, planning resources to be used in order to attain those
objectives, formulating policies to govern, use and disposition of the
resources
› Middle Level - Management Control
It is required by managers of various departments to measure
performance, decide on control actions, formulate new decision rules and
also allocate resources
› Lower/ Shop floor Level - Operational Control
It is the process of ensuring that operationalactivities are carried out to
achieve optimum use of resources. It makes use of pre-
establishedprocedures and decision rules.
Levels of Management
› The interaction between three levels of management, as
summarized by Jerome Kanter (1996)
Management as a Control System
› Essence of Management is:
Whatever a manager does, he/she does it through Decision
Making

“Decision making is an essence of management”

- Peter Drucker
“Management is imperfect without decision making”
- Hitesh Gupta
INFORMATION
› Information is a vital resource in development activities of
any business. All the economic and social progress
depends very significantly in the transfer of commercial,
scientific and technical information. Managers in different
situations require information on a subject in different
forms and with different emphasis.
PROPERTIES AND SCOPE OF INFORMATION
› Information has following general properties:
– Information is not consumed in use. This is an extremely
important property of information.
– Information can be shared by many and can be used
simultaneously without any loss of any one.
› The scope of information may vary. It can be in detail or
in summary form. It can either be a complete set of data
or only specific exceptions. The information scope
depends on the managerial level. Information could be
hard objective,relying heavily on facts.
INFORMATION ECONOMICS
› Information is an available resource in any organization.
However the preparation of formal information is not free; it
costs money. How much should an organization spend for
information? Some type of cost - effective analysis should be
undertaken.
› Difficulties occur in measuring the cost of providing the
information and measuring the value of information.
Information is theoretical in nature and possibly has, hardly
any tangible characteristics except symbolic representations.
› Main aspects of information economics are cost and value.
COST OF INFORMATION
› An information system is a key place for information generation, storage
and use. With the advances in information technology they are increasingly
used in day-to-day applications. So the cost of operation of information
system is:
› Hardware Cost :
This is normally a fixed or one time cost over a relevant range. In case of
computer based information system, with the development in technology,
hardware costs are coming down drastically.

System Analysis, Design and implementation cost:

› This is also a one time cost. This function includes formulating a
methodology for overall electronic data processing procedure. This should
include the cost for preparation of programs and purchase of software.
COST OF INFORMATION
› Cost of Space and Environmental Control Factors:
This cost may vary from time to time. Examples of this cost
are floor space, air-conditioning, power control units,
generator, security.
› Operation Costs:
This is basically a variable cost and includes costs of
personnel, systems maintenance, supplies and support
facilities.
TYPES OF INFORMATION
› Environmental Information
› Environmental information requirement can be further
classified and described as follows:(
– Government policies - Information about Government policies or
financial and tax affairs, political stability, etc. is required and
may have a significant effect on future planning decisions.(
– Technological environment - The information on technological
changes or advancements is necessary for forecasting such
changes in the firm and their probable effects on the same. It is
also desirable to assess the effect of technical changes on new
products and processes.
TYPES OF INFORMATION
› Environmental Information
– Economic trends - It includes information about
› (a) Economic indicators like employment, productivity, capital investment;
› (b) Prices and wage levels which affect all, regardless of product or
services;
› (c) GNP level, trend and consumer disposable income.
– Factors of production - These include information about the
source, cost, location, availability, accessibility and productivity
of the major factors ofproduction such as labour, materials and
spare parts as well as capital.
TYPES OF INFORMATION
› Competitive Information
› Competitive information requirement can be classified and
described as follows:
– Industry demand - This refers to the demand forecast of the
industry for the product manufactured or about the area in which
the firm is operating.
– Firm demand - This implies assessment of the firm's capabilities,
activities and potentialities to meet demand relative to the
capabilities and actions of the competing firms.
TYPES OF INFORMATION
› Competitive Information
› Competition - This includes information about competing firms for
forecasting own product demand and making decisions and plans to
achieve the forecast. Such information falls into three categories:
– (a) Past performance - It encompasses information concerning profitability,
return on investment, market share etc, which helps to provide a yardstick for
setting performance objectives for future.
– (b) Present activity - Here comes the information concerning competitor's
price strategies, advertising campaigns, product mix, changes in distribution
channels, etc. which help to evaluate one's own weaknesses or strengths.
– (c) Future plans Information concerning new products, R&D efforts, availability
of raw materials, etc. which help to decide future plans, comes under this
head.
TYPES OF INFORMATION
› Internal Information
› It is the by-product of the normal operations of a business.
Generally, it is historical or static in nature. Internal information is
aimed at identification of the firm's strengths and weaknesses. It
includes the following:
– Policies - Long-term basic policies on product range, marketing, finance
and about personnel do not permit flexibility in developing alternative
courses of action in the short run.
– 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 like employees, plant, materials,
overheads, administrative expenses of the firm. It provides information
about a number of sub-plans of the organization and it acts as an
important link between all activities of the firm.
TYPES OF INFORMATION
› Internal Information
› It is the by-product of the normal operations of a business. Generally,
it is historical or static in nature. Internal information is aimed at
identification of the firm's strengths and weaknesses. It includes the
following:
› Sales forecast - Since all other internal plans of the firm are guided
by the sales plan, it is considered as the dominant planning premise
internal to the firm.
› Supply factors - Information concerning availability and limitations of
certain supply factors such as labour, capital, plant and equipment is
important as these factors play a vital role in developing the financial
and subsidiary plans for achieving, organization's objectives.
ELEMENTS OF SYSTEM
› Outputs and inputs.
› Processor(s)
› Control
› Feedback
› Environment
› Boundaries and interface.
ELEMENTS OF SYSTEM
› Outputs and Inputs
– The major objective of a system is to produce an output that
hasvalue to its user. Whatever the nature of the output (goods,
services, or information), it must be in line with the expectations
of the intended user. Inputs are the elements(material, human
resources, information) that enter the system for processing the
inputs, the outcome of processing.
– Output is the result of processing. A system feeds on input to
produce output in the much same way that a business brings in
human, financial, and material resources to produce goods and
services. Input and outputs of a business are shown in the Figure
1.7.
ELEMENTS OF SYSTEM
› Processor(s)
– The processor is the element of a system that involves the actual
transformation of input into output. It is the operational
component of a system. Processors may modify the input totally
or partially, depending on the specifications of the output. This
means that as the output specifications change, so does the
processing. In some cases, input is also modified to enable the
processor to handle the transformation.
ELEMENTS OF SYSTEM
› Control:
– The control element guides the system, It is the decision-making
subsystem that controls the pattern of activities governing input,
processing, and output. In an organizational context, management as
a decision-making body controls the inflow, handling, and outflow of
activities that affect the welfare of the business. In a computer
system, the operating system and accompanying software influence
the behavior of the system.
– Output specifications determine what and how much input is needed
to keep the system in balance. In systems analysis, knowing the
attitudes of the individual who controls the area for which a computer
is being considered can make a difference between the success and
failure of the installation Management support is required for securing
control and supporting the objective of the proposed change.
ELEMENTS OF SYSTEM
› Feedback
– Control in a dynamic system is achieved by feedback. Feedback
measures output against a standard in some form of cybernetic
procedure that includes communication and control. The output
information is fed back to the input and/or to management
(controller) for deliberation.
– After the output is compared against performance standards, changes
can result in the input or processing and, consequently, the output.
Feedback may be positive or negative, routine or informational.
– Positive feedback reinforces tile performance of the system. It is
routine in nature.
– Negative feedback generally provides the controller with information
for action.
ELEMENTS OF SYSTEM
› Feedback
› In systems analysis, feedback is important in different ways.
During analysis, the user may be told that the problems in a
given application verify his/her initial concerns and justify the
need for change. Another form of feedback comes after the
system is implemented. The user informs the analyst about
the performance of the new installation. This feedback often
results in enhancements to meet the user's requirements.
When feedback and control are attached to the system, they
make the system self- regulating and self-monitoring. Then
the systems are known as open systems or cybernetic
systems. As shown in the Figure 1.8.
ELEMENTS OF SYSTEM
› Environment
– The environment is the "suprasystem" within which an
organization operates. It determines how a system should work.
A system cannon exist in isolation. The system is covered by the
environment with a boundary in between the two.
ELEMENTS OF SYSTEM
› Boundaries and Interface
– A system should be defined by its boundaries-the limits that
identify its components, processes, and interrelationships when it
interfaces with another system. Each system has boundaries
that determine its sphere of influence and control. This can be
seen in the Figure 1.9.