Management Information Systems

Presentation By
Nrtya Vardhanapu
The necessity for information has rapidly increased everywhere whether it is an
industry, commerce, defense, banking, education, economics, politics!

Information is “live” as it is required to be updated all the time and is

renewable.

It can be substituted, transportable and can be made to travel

In short, information is :
•Collected
•Stored
•Retrieved

Example 1 -In a competitive market, before deciding the price of an item, the
producer needs information about the pricing policy(policies) of the
competitors to effectively combat the effect of competition
Example 2-In setting up a new industry , the information regarding the 5m’s
(men, money, material, methods, machines) are need to be known
Apart from the 5 resources that are already mentioned above, Information is
considered as the sixth resource.

Money People Facilities Material Method

Information

Input Processing Output

Raw material Finished goods

Feedback control
Management Information System is an integrated man-machine system that
provides information to support the planning and control functions 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 operations and for business planning.

MIS is something more than just a computer system. Before the evolution of
computers, MIS techniques existed to supply users with information that would
permit them to arrive at an effective decision.
The computer has added new dimensions such as speed, accuracy and processing
of massive data, that permit the consideration of more alternatives in a decision.

Hence MIS consists of three main components which need to be understood

separately as well as a whole- namely
•Management
•Information
•System
Management has been viewed as
•a function
•a process
•a profession
•an elite of people

Management has also been described as an ART and as SCIENCE

Along with material, capital, and labor, management is considered as a resource.

Management can also be grouped into three hierarchical levels:

•Top management -information for strategic planning and decision making

•Middle management- information for technical planning and decision making
•Lower level or operative management-information for operational planning,
decision making and control
•Transaction processing
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

Data process Info decision

implementation
specific

action

Fig : Conversion of data into

decision
Information requirements of decision makers can be classified into three broad
types :
•Environmental information
•Competitive information
•Internal information

Environmental information:
Government policies
Economic trends
Technological Environment
Factors of Production

Competitive information:
Industry Demand
Firm Demand
The competition
-Past Performance
-Present Activity
-Future Plans
Internal Information:
Sales Forecast
Financial plan
Supply Factors
Policies

Systems are diverse- economic system, computer system, decision support

system, communication system, educational system, solar system
It means we live in an era of systems!

A system is basically a group of elements or components joined together to

fulfill certain functions.

A system is an assemblage of procedures, processes, methods, routine

techniques etc united in some form of regulated interaction to form an
organized whole.

Systems are either NATURAL or MAN-MADE

•A system is made up of sub-systems
•A sub-system may be composed of further sub-systems
•However, a system itself is a part of a super system. This could be termed as
the environment in which the system operates

Classification of Systems :

1.Conceptual and empirical systems

2.Natural and Man-made systems
3.Social System
4.Man-machine system
5.Open and closed systems
Management information systems are primarily meant for providing
information from the data after processing them. The information systems
do not generate data. The data are generated , collected, recorded, stored,
processed and retrieved after it has been generated by business operations
in an organization

Definitions:
According to Schwartz, “MIS is a system of people, equipment,
procedures, documents and communication that collects, validates, operates
on transformers, stores, retrieves, and present data for use in planning,
budgeting, accounting, controlling and other management process”
According to Jerome Kanter, “MIS is a system that aids management in
making, carrying out, and controlling decisions”

Coleman and Riley state that an MIS

(a) Applies to all management levels
(b) Is linked to an organizational sub-system
(c) Functions to measure performance, monitor progress, evaluates
alternatives or provide knowledge for change or collective action and
(d) Is flexible both internally and externally

Objectives of MIS:

• Facilitate the decision making process by furnishing information in the

proper time frame
• Provide requisite information at each level of management to carry out
their functions
•Help in highlighting the critical factors to the closely monitored for
successful functioning of the organization

•Support decision making in both structured and unstructured problem

environments

•Provide a system of people, computers, procedures, interactive query

facilities, documents for collecting, storing, retrieving and transmitting
information to the users.

Characteristics of MIS:

1. Management oriented
2. Management directed
3. Integrated
4. Common data flows
5. Heavy Planning element
6. Sub-system concept
7. Flexibility and ease of use
Categories of MIS:

1. TPS (Transaction Processing System)

2. IPS (Information providing system)
3. DSS (Decision Support System)
4. Programmed decision-making system

TPS: They system designed for processing day to day transactions in an

organization is called TPS.

IPS: This system is meant for processing information, making summary of

information, and providing exception reports.

DSS: It helps in the analytical capability of the decision maker by creating

an interactive model of the real life situation

Programmed decision-making system: The systems for programmed

decisions are created so that decisions are made by the system rather
than the person.
Framework for MIS organization and management triangle:

Robert Anthony in 1965 suggested that the area of management planning and
control can be divided into three categories as follows:

Strategic
planning

Management control

Operational control
Strategic Planning: It develops a strategy for
(a) Deciding objective of the organization and introducing changes in those
objectives
(b) Planning resources to be used to attain those objectives
(c) Formulating policies to govern procurement, use and disposition of those
resources

Management Control: It needed by managers of various departments to

(d) Measure performance
(e) Decide on control actions
(f) Formulate new decision rules
(g) Allocate resources

Operational Control : It is the process of ensuring that operational activities

are carried out to achieve optimum use of resources

In essence, Anthony’s framework is concerned with the objective of the

decision maker i.e. what the decision maker is trying to do!
Simon’s framework is concerned with the objective of the decision-maker i.e.
how the decision maker arrives at a decision

The process of decision making, according to Simon is divided into three

stages:
1. Intelligence: The decision maker identifies the problem or opportunity
which enables him to take a decision
2. Design: The decision maker enumerates all possible courses of action that
may help him to resolve the problem or exploit the opportunity
3. Choice: The decision maker selects one of the courses of action
enumerated at the design stage to arrive at a decision

Considering this framework, decisions can be divided into three classes:

1. Programmed decisions: The decision in which a problem is solved by a
predefined procedure or algorithm
Example: Inventory ordering
Non- programmed decisions: These decisions are unstructured, occasional, of
high consequence, complex and involve major commitments
Example: New product Decisions

Semi-programmed decisions: Consider Simon’s Models where Intelligent

phase is well structured and has diverse kinds of variance analysis. However
subsequent stages of design and choice are not handled by any set procedure.

Classification of MIS:
According to Mason, MIS is divided into four categories, They are:
1. Data Bank Information system
2. Predictive Information System
3. Decision Making information system
4. Decision Taking information system
Data Bank Information System:

Source data Requests Reports InferencesChoiceAction

Information System Decision-making system

It is Used for Unstructured decisions

 Predictive Information system:

Sourcedata predictions What if ChoiceAction

Ifquestions
then responses

Decision Making system

Information system

It is Used for Semi-structured decisions (relationship between input and ouput is either
deterministic or probabilistic.
 Decision Making Information System:

Which is
the best Actio
SourceDataPredictionsChoice
course n
recomme
-
ndations

Information System Decision Making system

It is Used for Structured decisions (for ranking outcome for each alternative course of
action)
Decision Taking information system:

Source Data Predictions Choice Action